Hibbett Reports Third Quarter Fiscal 2019 Results
November 27, 2018
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- Comparable Sales Increase 0.1% in Third Quarter
-
E-Commerce Sales Increase to 8.8% of Total
Net Sales - Gross Margin Improves 51 Basis Points from Prior Year
-
Third Quarter EPS of
$0.08 Per Share,$0.14 Excluding Acquisition Costs - Updates Fiscal 2019 Outlook
Third Quarter Results
Comparable sales for the 13-week period ended
Gross margin was 32.5% of net sales for the 13-week period ended
Store operating, selling and administrative expenses were 28.7% of net
sales for the 13-week period ended
Net income for the 13-week period ended
For the quarter, Hibbett opened seven new stores, expanded or relocated
one store and closed 24 underperforming stores, bringing the store base
to 1,042 in 35 states as of
Fiscal Year to Date Results
Net sales for the 39-week period ended
Gross margin was 33.3% of net sales for the 39-week period ended
Store operating, selling and administrative expenses were 26.5% of net
sales for the 39-week period ended
Net income for the 39-week period ended
Liquidity and Stock Repurchases
Hibbett ended the third quarter of Fiscal 2019 with
During the third quarter, the Company repurchased 395,450 shares of
common stock for a total expenditure of
Fiscal 2019 Outlook
The Company is updating its full year guidance for Fiscal 2019 with the following changes:
-
Earnings per diluted share in the range of
$1.35 to$1.48 , which includes$0.17 to$0.20 per diluted share for non-recurring costs associated with the acquisition of City Gear. Excluding the acquisition costs, non-GAAP earnings per diluted share are expected to be in the range of$1.55 to$1.65 , which compares with previous guidance of$1.57 to$1.75 . - Comparable sales in the range of flat to 1.0%, which compares with previous guidance in the range of -1.0% to 1.0%.
- Approximately 30 new store openings and 82 store closures, which includes 2 closures due to hurricane impact and 25 anticipated closures in the fourth quarter. This compares with previous guidance of approximately 30 to 35 new store openings and approximately 55 to 60 store closures.
- SG&A expense increase of 8.8% to 11.2%, including City Gear acquisition costs, and an increase of 7.0% to 9.0%, excluding such acquisition costs.
-
Share buyback of approximately
$18.0 million to$23.0 million , which compares with previous guidance of approximately$40.0 million to$50.0 million .
Investor Conference Call and Simulcast
The Company will also provide an online Web simulcast and rebroadcast of
its third quarter Fiscal 2019 conference call. The live broadcast of
Hibbett’s quarterly conference call will be available online at www.hibbett.com
under Investor Relations on
Hibbett, headquartered in
About Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, including adjusted net income, earnings per diluted share and SG&A expenses as a percentage of net sales. Management believes that non-GAAP net income, earnings per diluted share 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, 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. These acquisition-related costs for the third quarter of Fiscal 2019 include 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.
While our management uses these non-GAAP financial measures as a tool to enhance their understanding of 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 sections titled “GAAP to Non-GAAP Reconciliation” and “Reconciliation of Forward-Looking Guidance for Non-GAAP Financial Measures to Projected GAAP” following the financial statements accompanying this press release.
A WARNING ABOUT FORWARD LOOKING STATEMENTS: Certain matters
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,” “will,” “may,” “could,” “possible,” “potential” or other
similar words, phrases or expressions. For example, our forward looking
statements include statements regarding expectations around our new
mobile app and our Buy Online, Pick Up in Store and Reserve Online
capabilities, earnings per diluted share, non-recurring costs related to
the acquisition of City Gear, comparable sales and SG&A expenses, store
openings and closures and our stock repurchase program. Such
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
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Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||
2018 |
2017 |
2018 |
2017 |
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Net sales | $ | 216,888 | $ | 237,834 | $ | 702,718 | $ | 701,480 | ||||||||||
Cost of goods sold | 146,376 | 161,721 | 469,082 | 472,741 | ||||||||||||||
Gross margin | 70,512 | 76,113 | 233,636 | 228,739 | ||||||||||||||
Store operating, selling and administrative expenses | 62,342 | 57,993 | 186,211 | 169,886 | ||||||||||||||
Depreciation and amortization | 6,328 | 6,333 | 18,847 | 18,060 | ||||||||||||||
Operating income | 1,842 | 11,787 | 28,578 | 40,793 | ||||||||||||||
Interest (income) expense, net | (277 | ) | 53 | (387 | ) | 176 | ||||||||||||
Income before provision for income taxes | 2,119 | 11,734 | 28,965 | 40,617 | ||||||||||||||
Provision for income taxes | 620 | 4,170 | 7,179 | 15,320 | ||||||||||||||
Net income | $ | 1,499 | $ | 7,564 | $ | 21,786 | $ | 25,297 | ||||||||||
Basic earnings per share | $ | 0.08 | $ | 0.37 | $ | 1.16 | $ | 1.22 | ||||||||||
Diluted earnings per share | $ | 0.08 | $ | 0.37 | $ | 1.15 | $ | 1.21 | ||||||||||
Weighted average shares outstanding: | ||||||||||||||||||
Basic | 18,495 | 20,318 | 18,763 | 20,805 | ||||||||||||||
Diluted | 18,675 | 20,386 | 18,944 | 20,905 | ||||||||||||||
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Unaudited Condensed Consolidated Balance Sheets | ||||||||
(In thousands) | ||||||||
2018 |
2018 |
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Assets | ||||||||
Cash and cash equivalents | $ | 121,177 | $ | 73,544 | ||||
Inventories, net | 256,854 | 253,201 | ||||||
Other current assets | 23,395 | 20,029 | ||||||
Total current assets | 401,426 | 346,774 | ||||||
Property and equipment, net | 103,899 | 109,698 | ||||||
Other assets | 4,690 | 5,374 | ||||||
Total assets | $ | 510,015 | $ | 461,846 | ||||
Liabilities and Stockholders' Investment | ||||||||
Accounts payable | $ | 109,445 | $ | 93,435 | ||||
Short-term capital leases | 644 | 663 | ||||||
Accrued expenses | 21,258 | 21,469 | ||||||
Total current liabilities | 131,347 | 115,567 | ||||||
Long-term debt | 25,000 | - | ||||||
Other noncurrent liabilities | 25,187 | 26,683 | ||||||
Stockholders' investment | 328,481 | 319,596 | ||||||
Total liabilities and stockholders' investment | $ | 510,015 | $ | 461,846 | ||||
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Supplemental Information | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||
2018 |
2017 |
2018 |
2017 |
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Sales Information |
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Net sales (decrease) increase | -8.8 | % | 0.4 | % | 0.2 | % | -3.4 | % | ||||||||||||
Comparable sales increase (decrease) | 0.1 | %(1) | -1.3 | %(2) | 1.4 | %(1) | -5.7 | %(2) | ||||||||||||
Store Count Information |
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Beginning of period | 1,059 | 1,080 | 1,079 | 1,078 | ||||||||||||||||
New stores opened | 7 | 13 | 20 | 32 | ||||||||||||||||
Stores closed | (24 | ) | (11 | ) | (57 | ) | (28 | ) | ||||||||||||
End of period | 1,042 | 1,082 | 1,042 | 1,082 | ||||||||||||||||
Stores expanded or relocated | 1 | 2 | 9 | 12 | ||||||||||||||||
Estimated square footage at end of period (in thousands) | 5,957 | 6,158 | ||||||||||||||||||
Balance Sheet Information |
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Average inventory per store | $ | 246,501 | $ | 245,307 | ||||||||||||||||
Share Repurchase Program |
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Shares | 395,450 | 1,200,470 | 772,051 | 2,231,213 | ||||||||||||||||
Cost (in thousands) | $ | 7,625 | $ | 15,929 | $ | 16,474 | $ | 45,180 | ||||||||||||
1) Represents the increase in comparable sales from the 13 weeks and
39 weeks ended |
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2) As originally reported for the third quarter ended |
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Fiscal 2018 Comparable Sales and |
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As Originally Reported and Adjusted for Week Shift (a) | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
Fiscal 2018 | |||||||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | |||||||||||||||||||||
Comparable sales (originally reported) | -4.9 | % | -11.7 | % | -1.3 | % | 1.6 | % | -3.8 | % | |||||||||||||||
Comparable sales (adjusted for week shift) | -4.8 | % | -11.0 | % | 0.3 | % | 1.0 | % | -3.6 | % | |||||||||||||||
Impact of week shift | 0.1 | % | 0.7 | % | 1.6 | % | -0.6 | % | 0.2 | % | |||||||||||||||
Fiscal 2018 | |||||||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | |||||||||||||||||||||
Net sales (originally reported) | $ | 275.7 | $ | 188.0 | $ | 237.8 | $ | 266.7 | $ | 968.2 | |||||||||||||||
Net sales (adjusted for one week) | $ | 275.2 | $ | 206.0 | $ | 220.6 | $ | 265.8 | $ | 967.6 | |||||||||||||||
Impact of week shift | $ | (0.5 | ) | $ | 18.0 | $ | (17.2 | ) | $ | (0.9 | ) | $ | (0.6 | ) | |||||||||||
(a) Due to the 53rd week in Fiscal 2018, each quarter in Fiscal 2019 starts one week later than the same quarter in Fiscal 2018. The charts above present comparable sales and net sales for Fiscal 2018 as originally reported and as adjusted to represent the same 13-week period as the Fiscal 2019 quarters. | |||||||||||||||||||||||||
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GAAP to Non-GAAP Reconciliation | |||||||||||||||
(Dollars in thousands, except per share amounts) | |||||||||||||||
(Unaudited) | |||||||||||||||
Thirteen Weeks Ended
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GAAP Basis |
Non-Recurring |
Non-GAAP |
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Net sales | $ | 216,888 | $ | - | $ | 216,888 | |||||||||
Cost of goods sold | 146,376 | - | 146,376 | ||||||||||||
Gross margin | 70,512 | - | 70,512 | ||||||||||||
Store operating, selling and administrative expenses | 62,342 | 1,528 | 60,814 | ||||||||||||
Depreciation and amortization | 6,328 | - | 6,328 | ||||||||||||
Operating income | 1,842 | (1,528 | ) | 3,370 | |||||||||||
Interest (income) expense, net | (277 | ) | - | (277 | ) | ||||||||||
Income before provision for income taxes | 2,119 | (1,528 | ) | 3,647 | |||||||||||
Provision for income taxes | 620 | (447 | ) | 1,067 | |||||||||||
Net income | $ | 1,499 | $ | (1,081 | ) | $ | 2,580 | ||||||||
Basic earnings per share | $ | 0.08 | $ | (0.06 | ) | $ | 0.14 | ||||||||
Diluted earnings per share | $ | 0.08 | $ | (0.06 | ) | $ | 0.14 | ||||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 18,495 | 18,495 | 18,495 | ||||||||||||
Diluted | 18,675 | 18,675 | 18,675 | ||||||||||||
Thirty-Nine Weeks Ended
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GAAP Basis |
Non-Recurring |
Non-GAAP |
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Net sales | $ | 702,718 | $ | - | $ | 702,718 | |||||||||
Cost of goods sold | 469,082 | - | 469,082 | ||||||||||||
Gross margin | 233,636 | - | 233,636 | ||||||||||||
Store operating, selling and administrative expenses | 186,211 | 1,528 | 184,683 | ||||||||||||
Depreciation and amortization | 18,847 | - | 18,847 | ||||||||||||
Operating income | 28,578 | (1,528 | ) | 30,106 | |||||||||||
Interest (income) expense, net | (387 | ) | - | (387 | ) | ||||||||||
Income before provision for income taxes | 28,965 | (1,528 | ) | 30,493 | |||||||||||
Provision for income taxes | 7,179 | (379 | ) | 7,558 | |||||||||||
Net income | $ | 21,786 | $ | (1,149 | ) | $ | 22,935 | ||||||||
Basic earnings per share | $ | 1.16 | $ | (0.06 | ) | $ | 1.22 | ||||||||
Diluted earnings per share | $ | 1.15 | $ | (0.06 | ) | $ | 1.21 | ||||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 18,763 | 18,763 | 18,763 | ||||||||||||
Diluted | 18,944 | 18,944 | 18,944 | ||||||||||||
(1) Non-recurring acquisition costs represent costs
incurred as of |
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Reconciliation of Forward-Looking Guidance for | ||||||||||||||||||||||||||
Non-GAAP Financial Measures to Projected GAAP | ||||||||||||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
Fiscal Year Ended |
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GAAP | Non-GAAP | |||||||||||||||||||||||||
Range of Estimate | Adjustments | Range of Estimate | ||||||||||||||||||||||||
From | To | From | To | From | To | |||||||||||||||||||||
SG&A Expenses | $ | 252,260 | $ | 257,697 | $ | (4,200 | ) | $ | (5,000 | ) | $ | 248,060 | $ | 252,697 | ||||||||||||
Diluted earnings per share | $ | 1.35 | $ | 1.48 | $ | 0.17 | $ | 0.20 | $ | 1.55 | $ | 1.65 | ||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181127005182/en/
Senior Vice President &
Chief Financial
Officer
(205) 942-4292
Source: