Hibbett Sports Inc. (HIBB) delivered robust results for the first quarter of fiscal 2013, buoyed by strong sales performance at every category along with operational efficiencies. Hibbett’s first-quarter earnings of 98 cents per share outpaced the Zacks Consensus Estimate of 92 cents and jumped 29% from the prior-year quarter earnings of 76 cents.
The company remains focused on mid-sized and smaller markets as well as strategic mix of branded and localized merchandise. It is geared toward increasing operating results while creating shareholders’ value.
Getting to the Numbers
Net sales in the quarter jumped 14.4% year over year to $232.9 million, surpassing the Zacks Consensus Estimate of $225 million. Comparable store sales for the quarter witnessed an increase of 11.1%, driven by strong performance of activewear, footwear, and apparel and accessories businesses.
Despite 13% increase in cost of goods sold, distribution center and store occupancy costs in the quarter, gross profit surged 16.6% year over year to $88.4 million. Gross margin expanded 80 basis points to 38.0% during the quarter.
Healthy gross margin coupled with continued operational momentum drove a 24.3% increase in operating income during the quarter. The company reported an operating income of $42.4 million compared with $34.1 million in the same period last year. Consequently, operating margin for the reported quarter improved 150 basis points to 18.2% from the prior-year quarter.
Financials
Hibbett closed the first quarter of fiscal 2013 with a strong balance sheet, along with $95.8 million in cash and cash equivalents, no outstanding debt and $80 million available under its credit facility.
During the quarter, the company bought back nearly 316,960 shares under its $250 million buyback program for a total cost of $16.8 million. Currently, Hibbett has authorization worth $131.1 million available to be bought back under its ongoing share repurchase program.
Fiscal 2013 Guidance
Buoyed by better-than-expected results, continued sales strength along with improved cost management and margins, the company raised its expectations for fiscal 2013. The company now forecasts earnings in the range of $2.50 to $2.65 per share. Comparable store sales for the year are expected to increase in the mid-single digit range. The current Zacks Consensus Estimate of $2.54, for fiscal 2013, is nearly at the mid-point of management's guided range.
Further, the company expects to expand its stores network in fiscal 2013 by opening about 55 to 60 new stores. Additionally, the company also plans to expand nearly 15 high performing stores and close up to 18 stores