Hibbett Sports Q3 Profit Tops View, But Revenues Miss; Boosts 2014 Outlook

(RTTNews) - Sporting goods retailer Hibbett Sports, Inc. (HIBB) reported Friday a profit for the third quarter that decreased nine percent from last year, despite sales growth at established stores, driven by lower gross margins and higher expenses. The absence of an additional week this year also negatively impacted results.

Earnings per share topped analysts' expectations by a penny, while quarterly sales missed their estimates. The company also raised its earnings guidance for the full-year 2014.

"We delivered solid comparable store sales in the quarter driven by a strong Back to School led by improved performance in footwear, apparel, and accessories. Demand for our fall assortment has been positive as well, and we are well positioned going into the holiday season," President and CEO Jeff Rosenthal said in a statement.

The Birmingham, Alabama-based company reported net income of $17.25 million or $0.66 per share for the third quarter, higher than $18.97 million or $0.71 per share in the prior-year quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.65 per share for the quarter. Analysts' estimates typically exclude one-time items.

The week shift associated with the fiscal calendar resulted in an about $0.11 per share reduction in earnings for the latest quarter.

Net sales for the quarter increased 2.5 percent to $207.97 million from $202.93 million in the same quarter last year, but missed twelve Wall Street analysts' consensus estimate of $207.72 million. Comparable store sales increased 4.8 percent on strong back-to-school sales.

The additional week last year resulted in a calendar shift and reduced revenues by about $14 million or 7.1 percent.

Gross profit margin for the quarter contracted 160 basis points to 36.8 percent, while store operating, selling and administrative expenses as a percentage of net sales increased 120 basis points to 21.9 percent from last year.

During the third quarter, Hibbett opened 16 new stores, closed 4 under-performing stores and expanded 4 high performing stores. This brings the company's total store base to 904 in 31 states.

Looking ahead to fiscal 2014, the retailer raised its earnings guidance to a range of $2.68 to $2.77 per share from the prior forecast range of $2.65 to $2.77. Street is looking for full-year 2014 earnings of $2.76 per share.

The company continues to project comparable store sales to increase in the low-single digit range for the full year.

Further, the company anticipates opening 72 to 75 new stores, expanding about 15 high performing stores and closing 17 to 20 stores in the full-year 2014.

"We continue to be encouraged by the pace and performance of new store openings, and feel confident that our investments in the business will provide a solid foundation for future success," Rosenthal added.

HIBB closed Thursday's regular trading session at $62.87, up $1.34 on a volume of 0.41 million shares. In the past 52-week period, the stock has been trading in a range of $49.78 to $64.00.