Hibbett Sports Q2 Profit Tops View, But Revenues Miss, Slashes 2014 Outlook

(RTTNews) - Sporting goods retailer Hibbett Sports, Inc. (HIBB) reported Friday a profit for the second quarter that increased 34 percent from last year, driven by higher sales at established stores and improved margins amid lower expenses. Earnings per share topped analysts' expectations by a penny, while quarterly revenues missed their estimates. The company also slashed its earnings guidance for the full-year 2014, citing recent trends and on-going uncertainties in the economic environment.

"We delivered a solid increase in earnings for the second quarter. Comparable store sales were softer than planned due to a challenging economic environment; however, we are encouraged by a strong start to the third quarter. New store performance continues to be strong and we remain confident with the pace of new store openings," President and CEO Jeff Rosenthal said in a statement.

The Birmingham, Alabama-based company reported net income of $10.54 million or $0.40 per share for the second quarter, higher than $7.90 million or $0.30 per share in the prior-year quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.39 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter increased 12.6 percent to $186.24 million from $165.44 million in the same quarter last year, and missed twelve Wall Street analysts' consensus estimate of $186.32 million by a whisker.

Comparable store sales increased 4.8 percent, while it edged up only 0.3 percent on a calendar basis.

Gross profit margin for the quarter expanded 10 basis points to 34.3 percent from last year's 34.2 percent. Store operating, selling and administrative expenses as a percentage of net sales declined 140 basis points to 23.4 percent from last year's 24.8 percent.

During the second quarter, Hibbett opened 17 new stores, closed 4 under-performing stores and expanded 3 high performing stores. This brings the company's total store base to 892 in 31 states at the end of the second quarter.

The new store openings have seen the square footage grow 7 percent to a total of 5,13 million square feet.

Looking ahead to fiscal 2014, the retailer slashed its earnings guidance to a range of $2.65 to $2.77 per share from the prior forecast range of $2.85 to $3.05 per share. Comparable store sales, on a calendar basis, is also now seen to grow only at the low single-digit range, down from the prior projection for a low to mid single-digit range growth.

Street is currently looking for full-year 2014 earnings of $2.94 per share on annual revenues of $867.81 million.

Further, the company expects to open 70-75 new stores, expand about 18 high performing stores and close 15 to 20 stores for the full year.

HIBB closed Thursday's regular trading session at $58.47, up $0.36 on a volume of 0.37 million shares.