Chairman and CEO Mickey Newsome called fiscal 2006 Hibbett's "best year ever" during the chain's earnings conference call Friday. During the year, profit increased 33.7% to $33.6 million compared with $25.1 million in fiscal 2005. Meanwhile, earnings per diluted share increased 40% to 98 cents from 70 cents per diluted share in the prior year. Net sales for the year jumped 16.6% to $440.3 million compared with $377.5 million for the same period last year, while comparable store sales increased 5.6%.
Newsome said operating margin that reached 11.8%. The 100-basis-point improvement in margin pushed earnings per share, according to analysts from Wachovia Securities.
For the fourth quarter fiscal 2006, Hibbett's net income increased 21.7% to $9.9 million compared with $8.1 million in the fourth fiscal quarter of last year. Earnings per diluted share increased 26.1% to 29 cents compared with 23 cents per diluted share in the prior year. Net sales increased 12.8% to $120.8 million compared with $107.1 million last year, driven by a 2.5% improvement in comparable store sales. In particular, footwear and licensed apparel were the strongest performers during the quarter, Newsome said.
Analysts cheered Hibbett's performance during fiscal 2006. "The company is generating solid same-store sales increases against challenging comparisons and improving gross margins while reducing inventory per store. This has led to accelerating inventory turns and higher working capital that is also turning faster, leading to powerful free cash flow generation of an estimated $29 million this year and $37.5 million next year. We view this as outstanding fundamental operating performance," wrote Wachovia Securities analysts in a review report.
During fiscal 2006, Hibbett opened 67 net new stores, bringing the total store base to 549 in 22 states. In fiscal 2007, the chain plans to open 80 to 85 new stores including 10 to 15 stores in the first quarter. Also during the quarter, Hibbett expects to report earnings per diluted share of 32 cents to 35 cents and comp-store sales of 2% to 4%.
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