Hibbett Reports Third Quarter Fiscal 2016 Results

Hibbett Sports, Inc. (NASDAQ/GS: HIBB):

• EPS increases 17.9% to $0.79 per diluted share (including favorable impact of $0.05 per diluted share resulting from legal settlement)
• Comparable store sales increases 0.6%
• Updates Fiscal 2016 Guidance
• Board authorizes new stock repurchase program of $300 million

Hibbett Sports, Inc. (NASDAQ/GS: HIBB), a sporting goods retailer, today announced results for the third quarter ended October 31, 2015.

Third Quarter Results

Net sales for the 13-week period ended October 31, 2015, increased 4.6% to $228.3 million compared with $218.3 million for the 13-week period ended November 1, 2014. Comparable store sales for the third quarter increased 0.6%.

Gross profit was 36.1% of net sales for the 13-week period ended October 31, 2015, compared with 36.3% of net sales for the 13-week period ended November 1, 2014. Product margin was flat, although store occupancy and logistics costs increased as a percentage of net sales due to the deleveraging effect of lower comparable store sales.

Store operating, selling and administrative expenses were 21.1% of net sales for the 13-week period ended October 31, 2015, compared with 22.1% of net sales for the 13-week period ended November 1, 2014. These expenses were lower as a percentage of net sales mainly due to a favorable legal settlement.

Net income for the 13-week period ended October 31, 2015, was $18.7 million compared with $16.9 million for the 13-week period ended November 1, 2014. Earnings per diluted share totaled $0.79 for the 13-week period ended October 31, 2015, compared with $0.67 for the 13-week period ended November 1, 2014. The impact of the favorable legal settlement contributed $0.05 per diluted share to the 13-week period ended October 31, 2015.

Jeff Rosenthal, President and Chief Executive Officer, stated, “We were very pleased with our back-to-school sales, our margin performance and expense controls, and are encouraged by the great progress we are making with our merchandising initiatives. Sales softened late in the quarter due to significant declines in our colder weather categories, although footwear remained strong due to benefits from a strong assortment and an improved in-stock position. Looking forward, we believe that our ongoing improvements in merchandise strategies, execution and replenishment capabilities have us well-positioned for the holiday season.”

Fiscal Year to Date Results

Net sales for the 39-week period ended October 31, 2015, increased 3.5% to $697.4 million compared with $674.1 million for the 39-week period ended November 1, 2014. Comparable store sales decreased 0.5%.

Gross profit was 35.5% of net sales for the 39-week period ended October 31, 2015, compared with 35.9% of net sales for the 39-week period ended November 1, 2014.

Store operating, selling and administrative expenses were 21.5% of net sales for the 39-week period ended October 31, 2015, compared with 21.3% of net sales for the 39-week period ended November 1, 2014.

Net income for the 39-week period ended October 31, 2015, was $53.1 million compared with $53.7 million for the 39-week period ended November 1, 2014. Earnings per diluted share increased to $2.17 for the 39-week period ended October 31, 2015, compared with $2.08 for the 39-week period ended November 1, 2014.

For the quarter, Hibbett opened 20 new stores, expanded one high performing store and closed three underperforming stores, bringing the store base to 1,031 in 33 states as of October 31, 2015. The Company also opened its first store in the state of New York in the quarter. Estimated square footage for the store base increased 6.1% to approximately 5.9 million square feet at October 31, 2015, compared with 5.6 million square feet at November 1, 2014.

Liquidity and Stock Repurchases

Hibbett ended the third quarter of Fiscal 2016 with $45.5 million of available cash and cash equivalents on the unaudited consolidated balance sheet, no bank debt outstanding and full availability under its $80.0 million unsecured credit facilities.

During the third quarter, the Company repurchased 1,341,170 shares of its common stock for a total expenditure of $50.5 million. Approximately $87.5 million of the total authorization remained for future stock repurchases as of October 31, 2015. On November 19, 2015, the Board of Directors of the Company authorized a new Stock Repurchase Program (Program) of $300.0 million expiring on February 2, 2019. Effective immediately, the new Program replaces the existing authorization that was due to expire on January 30, 2016.

Fiscal 2016 Outlook

The Company is updating its guidance for the 52 weeks ending January 30, 2016, to earnings per diluted share in the range of $2.87 to $2.94 from a previously reported range of $2.80 to $2.90. Comparable store sales are expected to be close to flat for the year, which compares to previous guidance of flat to a low single-digit increase.

Investor Conference Call and Simulcast

Hibbett Sports, Inc. will conduct a conference call at 10:00 a.m. ET on Friday, November 20, 2015, to discuss third quarter Fiscal 2016 results. The number to call for the live interactive teleconference is (212) 231-2930. A replay of the conference call will be available until November 27, 2015, by dialing (402) 977-9140 and entering the passcode, 21777765.

The Company will also provide an online Web simulcast and rebroadcast of its third quarter Fiscal 2016 conference call. The live broadcast of Hibbett's quarterly conference call will be available online at www.hibbett.com under Investor Relations on November 20, 2015, beginning at 10:00 a.m. ET. The online replay will follow shortly after the call and be available for replay for one year.

Hibbett Sports, Inc. operates sporting goods stores in small to mid-sized markets, predominately in the South, Southwest, Mid-Atlantic and Midwest regions of the United States. The Company’s primary store format is Hibbett Sports, a 5,000-square-foot store located in strip centers and enclosed malls.

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, or estimate. For example, our forward looking statements include statements regarding earnings per diluted share, comparable store sales and improvements in merchandise strategies, execution and replenishment capabilities. 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 Securities and Exchange Commission, including the "Risk Factors," "Business" and "MD&A" sections in our Annual Report on Form 10-K filed on March 31, 2015 and in our Quarterly Report on Forms 10-Q filed on June 8, 2015 and September 8, 2015. In light of these risks and uncertainties, the future events, developments or results described by our forward looking statements in this document could turn out to 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.

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