Hibbett Sports Inc.‘s (HIBB) reported fourth-quarter 2011 earnings of 44 cents per share, beating the Zacks Consensus Estimate by a penny. Earnings increased 10% from 40 cents per share reported in the prior-year quarter.
Financial Detail
Net sales in the quarter were $173.2 million, up 3.8% from $166.8 million in the prior-year quarter but fell short of the Zacks Consensus Estimate of $175.0 million. The slow growth in sales was primarily caused by a delay in income tax refunds and closing of stores for most of the days in January 2011 due to snowstorms. Comparable store sales inched up 1.2%.
Cost of goods sold, distribution center and store occupancy costs in the quarter under review increased 2.7% year over year to $112.7 million. Store operating, selling and administrative expenses were $37.8 million, up 9.4% year over year. The company reported an operating income of $19.3 million, reflecting a year-over-year increase of 1.8%.
Cash and cash equivalents at the end of fiscal 2011 was $75.5 million, up from $49.7 million at the end of the prior fiscal. The company has no bank debt at the end of fiscal 2011 and has full accessibility under its $80.0 million unsecured credit facilities.
The company spent $7.8 million to buy back 225,400 shares in the quarter. During fiscal 2011, Hibbett bought back approximately 1.5 million shares for $37.9 million. The company still has almost $212.1 million of the total authorization remaining for future stock repurchases under its $250.0 million share repurchase program.
Store Update
Hibbett opened 45 new stores and closed 14 stores during fiscal 2011, bringing the store base to 798 in 26 states. The company also expanded 14 high performing stores during the fiscal.
Fiscal 2012 Guidance
Management expects low to mid single-digit increase in comparable store sales in fiscal 2012. Accordingly, it expects earnings to be in the range of $1.70 to $1.90 a share.
Hibbett intends to open 50 to 55 new stores and expand 15 high performing stores in fiscal 2012. The company also intends to close 10 to 15 underperforming stores to deliver increased operating margins.
Hibbett remains focused on mid-sized and smaller markets as well as a strategic mix of branded and localized merchandise. It is geared toward increasing operating results and creating shareholder value.
Hibbett, which competes with Food Locker Inc. (FL) and Wal-Mart Stores Inc. (WMT), currently, holds a Zacks #3 Rank, implying a short-term ‘Hold’ rating on the stock. Besides, the company retains a long-term ‘Outperform’ recommendation on the stock.
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