Market Overview

Hibbett Reports First Quarter Results

  • Comparable Sales Increase 5.1% in First Quarter
  • First Quarter EPS Increased 32% to $1.48 Per Share, $1.61 Excluding
    Non-Recurring Costs
  • Updates Fiscal 2020 Outlook

Hibbett Sports, Inc. (NASDAQ:HIBB), a leading athletic-inspired
fashion retailer, today provided the following business updates:

First Quarter Results

Net sales for the 13-week period ended May 4, 2019, increased 25.0% to
$343.3 million, including $59.4 million for City Gear, compared with
$274.7 million for the 13-week period ended May 5, 2018. Comparable
store sales increased 5.1%. Comparable store sales will not include
sales from City Gear until the fourth quarter of Fiscal 2020. E-commerce
sales represented 8.3% of total sales for the first quarter. Strength in
footwear and sneaker-connected apparel & accessories continued to offset
softer sales in licensed products and team sports.

Gross margin was 34.5% of net sales for the 13-week period ended May 4,
2019, compared with 35.2% for the 13-week period ended May 5, 2018. The
70 basis point decrease was mainly due to increased freight costs from
strong e-commerce sales and a $1.0 million expense incurred to amortize
an inventory step-up value related to the City Gear acquisition.
Excluding non-recurring expenses, non-GAAP gross margin was 34.8% of net
sales for the 13-week period ended May 4, 2019.

Store operating, selling and administrative expenses were 21.7% of net
sales for the 13-week period ended May 4, 2019, compared with 22.5% of
net sales for the 13-week period ended May 5, 2018. The decrease as a
percent of net sales was mainly due to overall leverage gained through
higher sales. SG&A expenses included $0.7 million in non-recurring costs
related to the acquisition of City Gear, and $1.5 million in
non-recurring impairment costs associated with the Company's strategic
realignment and accelerated store closure plan. Excluding non-recurring
costs, non-GAAP store operating, selling and administrative expenses
were 21.1% of net sales for the 13-week period ended May 4, 2019.

Net income for the 13-week period ended May 4, 2019, was $27.4 million
compared with net income of $21.5 million for the 13-week period ended
May 5, 2018. Excluding non-recurring costs, non-GAAP net income for the
13-week period ended May 4, 2019, was $29.8 million. Earnings per
diluted share was $1.48 for the 13-week period ended May 4, 2019,
compared with earnings per diluted share of $1.12 for the 13-week period
ended May 5, 2018. Excluding non-recurring costs, non-GAAP earnings per
diluted share was $1.61 for the 13-week period ended May 4, 2019.

Jeff Rosenthal, President and Chief Executive Officer, stated, "Our
first quarter results reflect improved performance in both the store and
e-commerce channels. We believe our improved web traffic and mobile app,
along with continued traction in Buy Online, Pickup in Store, are
translating to traffic in our stores and online. We are moving forward
with our plan to close our most unproductive stores. Our City Gear
integration is progressing as planned and we are encouraged by the
improved inventory position. Looking ahead, we are committed to the
fundamentals of presenting a differentiated customer experience,
building best in class teams and driving exceptional execution in all
parts of the business."

For the quarter, Hibbett opened three new stores, rebranded two Hibbett
stores to City Gear stores, expanded one high-performing store, and
closed 24 underperforming stores bringing the store base to 1,144 in 35
states as of May 4, 2019.

Strategic Realignment – Accelerated Store
Closure Plan

As the retail environment continues to evolve, the Company is focused on
improving the productivity of the store base while continuing to grow
its omni-channel business to serve customers where and when they want to
shop. As previously reported, the Company is proceeding with the closing
of approximately 95 Hibbett stores in Fiscal 2020, which is expected to
result in non-recurring impairment and store closure charges in the
range of $0.15 to $0.20 per diluted share in Fiscal 2020.

Balance Sheet and Stock Repurchases

Hibbett ended the first quarter of Fiscal 2020 with $117.0 million of
available cash and cash equivalents on the consolidated balance sheet.
As of May 4, 2019, Hibbett had $26.0 million in debt outstanding and
$74.0 million available under its credit facilities.

During the first quarter, the Company repurchased 259,432 shares of
common stock for a total expenditure of $5.4 million. Approximately
$183.2 million remained authorized for future stock repurchases through
January 29, 2022.

Fiscal 2020 Outlook

The Company is updating its full year guidance for Fiscal 2020:

Updated Previous
Comparable store sales +0.5% - +2.0% (1.0%) - +1.0%
Net store closings (80) - (85) (80) - (85)
Earnings per diluted share $1.70 - $1.85 $1.50 - $1.70
Expected impact of non-recurring items (non-GAAP) ($0.25) - ($0.35) ($0.25) - ($0.35)
Earnings per diluted share excluding non-recurring items (non-GAAP) $2.00 - $2.15 $1.80 - $2.00
Gross margin (25)bps - (35)bps (25)bps - (45)bps
Gross margin excluding non-recurring items (non-GAAP) (35)bps - (45)bps (35)bps - (55)bps
SG&A expense rate change 10bps - 15bps 15bps - 25 bps
SG&A expense rate change excluding non-recurring items (non-GAAP) Flat - (10)bps Flat
Depreciation (10)bps (10)bps - (20)bps
Tax rate 25.0% 24.5%
Capital expenditures $18M - $22M $18M - $22M
Share repurchase $10M - $15M $10M - $15M

Investor Conference Call and Simulcast

Hibbett Sports, Inc. will conduct a conference call at 10:00 a.m. ET on
Friday, May 24, 2019, to discuss first quarter Fiscal 2020 results. The
number to call for the live interactive teleconference is
(212) 231-2934. A replay of the conference call will be available until
May 31, 2019, by dialing (402) 977-9140 and entering the passcode,

The Company will also provide an online Web simulcast and rebroadcast of
its first quarter Fiscal 2020 conference call. The live broadcast of
Hibbett's quarterly conference call will be available online at
under Investor Relations on May 24, 2019, beginning at 10:00 a.m. ET.
The online replay will follow shortly after the call and be available
for replay for 30 days.

Hibbett, headquartered in Birmingham, Alabama, is a leading
athletic-inspired fashion retailer with more than 1,100 stores under the
Hibbett Sports and City Gear banners, primarily located in small and
mid-sized communities. Founded in 1945, Hibbett has a rich history of
convenient locations, personalized customer service and access to
coveted footwear, apparel and equipment from top brands like Nike,
Jordan, Adidas, and Under Armour. Consumers can browse styles, find new
releases, shop looks and make purchases online or in their nearest store
by visiting
Follow us @hibbettsports and @citygear.

About Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures,
including adjusted net income, earnings per diluted share, gross margin
and SG&A expenses as a percentage of net sales. Management believes that
non-GAAP net income, earnings per share, gross margin and SG&A expenses
as a percentage of net sales, which exclude the effects of non-recurring
expenses related to the acquisition of City Gear and our accelerated
store closure plan, are useful measures for providing more accurate
comparisons of our current financial results to historical operations,
forward looking guidance and the financial results of peer companies.
The non-recurring costs related to the acquisition of City Gear include
amortization of inventory step-up value, contingent earnout valuation
update and professional service fees and expenses consisting primarily
of investment banking, legal and accounting fees and expenses. In future
periods, such acquisition-related costs may include one or more of the
following categories of expenses: (i) transition and integration costs,
(ii) professional service fees and expenses and (iii)
acquisition-related adjustments. Future non-recurring costs related to
the accelerated store closure plan may include: (i) lease and equipment
impairment costs, (ii) third party liquidation fees, (iii) store exit
costs, and (iv) residual lease costs.

While our management uses these non-GAAP financial measures as a tool to
enhance their ability to assess certain aspects of our financial
performance, our management does not consider these measures to be a
substitute for, or superior to, the information provided by GAAP
financial statements. Consistent with this approach, we believe that
disclosing non-GAAP financial measures to the readers of our financial
statements provides such readers with useful supplemental data that,
while not a substitute for GAAP financial statements, allows for greater
transparency in the review of our financial and operational performance.
It should be noted as well that our non-GAAP information may be
different from the non-GAAP information provided by other companies.

For a reconciliation of these non-GAAP financial measures to the most
directly comparable financial measures prepared in accordance with GAAP,
please see the "GAAP to Non-GAAP Reconciliation" that accompanies this
press release.

discussed in this press release are "forward looking statements" as that
term is used in the Private Securities Litigation Reform Act of 1995.

Forward looking statements address future events, developments or
results and typically use words such as "believe," "anticipate,"
"expect," "intend," "plan," "forecast," "guidance," "outlook,"
"estimate," "continue," "will," "may," "could," "possible," "potential"
or other similar words, phrases or expressions. For example, our
forward-looking statements include statements regarding expectations
around our online sales, our new mobile app and our Buy Online Pick Up
in Store capabilities, the integration of and non-recurring costs
relating to our acquisition of City Gear, store and associated
impairment and store closure charges related to our accelerated store
closure plan, the productivity of our store base, earnings per diluted
share, comparable store sales, the impact of non-recurring costs and
expenses, gross margin, SG&A expense, depreciation expense, tax rate,
capital expenditures and our stock repurchase program.
statements are subject to risks and uncertainties that could cause
actual results to differ materially, including economic conditions,
industry trends, merchandise trends, vendor relationships, customer
demand, and competition.
For a discussion of these factors, as
well as others which could affect our business, you should carefully
review our Annual Report and other reports filed from time to time with
the Securities and Exchange Commission, including the "Risk Factors,"
"Business" and "MD&A" sections in our Annual Report on Form 10-K filed
on April 18, 2019. In light of these risks and uncertainties, the future
events, developments or results described by our forward-looking
statements in this document could be materially and adversely different
from those we discuss or imply.
We are not obligated to release
publicly any revisions to any forward-looking statements contained in
this press release to reflect events or circumstances occurring after
the date of this report and you should not expect us to do so.

Unaudited Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
May 4, 2019   May 5, 2018
% of Sales % of Sales
Net sales $ 343,295
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