Fitness financials: Hibbett 2Q retail sales shine; plus Canadian fitness retailers complete deal

Fitness and sporting goods retailer Hibbett Sports reported higher revenue and profit led by strong sales of footwear and active wear for fiscal second quarter. Plus Canadian Tire completed its deal to acquire the Forzani Group.
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Hibbett Sports Inc. (Nasdaq: HIBB) increased its guidance after reporting higher revenue and profit led by strong sales of footwear and active wear for its fiscal second quarter, ended July 30, 2011.

The Birmingham, Ala.-based fitness and sporting goods national retail chain reported sales up 9.5 percent to $153.1 million, compared to sales of $139.9 million during the same period a year ago. Comparable store sales rose 5.9 percent.

Hibbett’s quarterly net income jumped 48 percent to $5.9 million, or $0.21 per diluted share, versus $4 million, or $0.14 per diluted share a year ago.

It was the company’s the seventh consecutive quarter of comparable store sales increases and its eighth consecutive quarter of earnings increases. Hibbett ended its latest quarter with $65.2 million in cash and cash equivalents, and no debt of its available $80 million in unsecured credit facilities.

Hibbett opened eight new stores, expanded five stores and closed five stores during the quarter, bringing its store base to 802 in 26 states as of July 30. For the current fiscal year, the company expects to open approximately 50 to 55 new stores, expand 15 stores and close 10 to 15 stores. During the second quarter, the company repurchased 240,405 shares of common stock for a total expenditure of $9.4 million.

Looking ahead, Hibbett increased its earnings guidance for the current fiscal year to a range of $1.90-$2 per diluted share with a comparable store sales increase in the mid-single digit range.

Canadian fitness retailers complete deal

Canadian Tire Corp. has completed its bid to acquire the remaining shares it didn’t already own of The Forzani Group, for approximately CAN $741.2 million (USD $749 million).

Canadian Tire Corp. announced its intentions May 9, 2011, to take control of Forzani, which operates 500 retail locations across Canada including Sport Chek, Sport Mart, Athletes World, National Sports, Sports Experts, Intersport, Atmosphere, Tech Shop, Nevada Bob's Golf, Hockey Experts, The Fitness Source and S3. The stores sell both brand name and private-label sporting goods equipment, outdoor gear, fitness equipment, apparel and footwear.

Canadian Tire has 485 general retail stores, which among others things is a leading seller of fitness equipment and outdoor hard goods. It also owns about 350 gas stations and automotive stores, and 378 Mark's Work Warehouse stores selling work apparel.

The transaction will result in more than 1,000 combined stores selling sporting, outdoor and fitness goods between the two companies, but Canadian Tire will operate the Forzani retail banners as a separate business unit.

In connection with the change of control, Forzani's CEO, Robert Sartor, and CFO, Michael Lambert, have stepped down from their roles. Michael Medline, who led the Canadian Tire acquisition team and formerly served as president of its automotive and dealer relations, was named Forzani’s new president. Gregory Craig, Canadian Tire's vice president of financial planning and analysis, was appointed Forzani's new CFO. The rest of the management team is a mix of existing Forzani executives and Canadian tire executives.

(Conversion of Canadian dollars into into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Aug. 19, 2011.)

--Compiled by David Clucas




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