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HIBB AT A GLANCE

P/E ► 16.7 AVG EV/EBITDA ► 8.54 AVG ROA ► 13.3% HIGH ROE ► 23.6% AVG Debt to Equity ► 0.686 AVG Current Ratio ► 2.46 AVG Interest Coverage Ratio ► 94.1 HIGH

 

 

 

 

 

 

Revenue, Net Income, and Net MarginRevenue, Gross Profit, and Gross MarginOperating IncomeEbitIncome Before TaxesNet Income from Continuing OpsInterest vs Continuing IncomeInterest CoverageOperating ExpensesSG&AAmortization & Depreciation

In 2007, Hibbett sold over $521 million in products, with Nike goods accounting for approximately 48.5% of total purchases, at an operating income of $48 million.^[2][3] Hibbett's profit margins are at the top of its industry - its margin in 2007 was 9.3%, significantly better than the next competitor, Dick's Sporting Goods, which had a 6.9% margin.^[4]

Hibbett mainly competes with local independent sporting goods stores rather than national chains because of its small store size, and its lack of discount offerings. Hibbett depends on discretionary income to build its sales - its products are not necessary commodities. As such, the company is exposed to a hurting U.S. economy, the credit crunch, and seasonal fluctuations.

[edit] Business Overview

Hibbett Sports sells soft goods (athletic and sport apparel/footwear) and hard goods (durable items such as baseball bats, footballs, etc.), all of which are circulated from the company's 220,000 square foot distribution center in Birmingham, Alabama.^[5] Hibbett sells its products at individual stores, through its website, hibbett.com, and through its team sales division, Hibbett Team Sports, Inc. The company emphasizes team sports and is a leading supplier of customized athletic apparel, equipment, and footwear to athletic and youth programs primarily in Alabama.

Unlike other sporting goods chains who offer discounted merchandise, Hibbett sells all of its products at full price. With an average store space of 5,000 square feet, Hibbett stores are much smaller than other sporting goods venues--Big 5 stores average 11,000 square feet, while a typical Dick's Sporting Goods store measures 50,000 square feet.^[6][7][8] The size and location of Hibbett stores deliver low operating costs and allow the company to target counties that represent between 30,000 and 100,000 people--something its larger competitors cannot do.^[9] The company relies on strategically located distribution centers to move new products to its rural locations.

Hibbett primarily operates in strip centers, anchored by Wal-Mart and enclosed malls. Although Hibbett seeks the Wal-Mart customer, the two companies' strategies greatly differ. Wal-Mart sells hunting, fishing, and camping equipment, in addition to food and household appliances, while Hibbett focuses on equipment for team sports. Wal-Mart carries about 30 types of baseball gloves; Hibbett carries about 80. Wal-Mart focuses on discounted items as a self-service store, whereas Hibbett offers fully-priced products as a full-service store.

In 2007, Hibbett sold over $521 million in products at an operating income of $48 million.

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Despite the 2008 economic recession, Hibbett has consistently produced high operating margins compared to other public sporting goods companies:

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(Read More about Hibbett Sports' key trends and forces...)