Hibbett Sports 2005 Annual Report Download - page 17

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MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERAT I O N S
by operating activities in the Consolidated Statements of Cash Flows. Retained earnings at the beginning
of the fiscal year ended February 1, 2003, has been adjusted for the after-tax impacts of the restatements
of earlier periods.
While we do not consider the net dollar amounts to be material to net earnings, financial position or net
cash flows for the periods presented, we believe it is appropriate to align our historical accounting
results with the SEC's comments on lease accounting under GAAP, and we have done so, as reflected in
our decision to restate results for certain prior years. These accounting changes reduced net income by
$0.4 million, $0.7 million and $0.5 million for the fiscal years ended January 29, 2005, January 31,
2004, and February 1, 2003, respectively, and resulted in a $1.2 million reduction in retained earnings
at the beginning of fiscal year ended February 1, 2003.
Results of Operations
The following table sets forth the percentage relationship to net sales of certain items included in our
Consolidated Statements of Operations expressed for the periods indicated. Percentages may not add
due to rounding:
For the Fiscal Years Ended
January 29, January 31, February 1,
2005 2004 2003
(as restated) (as restated)
Net sales 100.0% 100.0% 100.0%
Cost of goods sold, including warehouse, distribution
and store occupancy costs 67.6 67.6 68.8
Gross profit 32.4 32.4 31.2
Store operating, selling and administrative expenses 19.3 19.8 20.0
Depreciation and amortization 2.6 3.0 3.1
Operating income 10.4 9.6 8.1
Interest income, net (0.1) 0.0 0.1
Income before provision for income taxes 10.6 9.6 8.0
Provision for income taxes 3.9 3.5 2.9
Net income 6.7% 6.1% 5.1%
Fiscal 2005 Compared to Fiscal 2004 (as restated)
Net sales. Net sales increased $56.5 million, or 17.6%, to $377.5 million for the 52 weeks ended
January 29, 2005, from $321.0 million for the 52 weeks ended January 31, 2004. We attribute this
increase to the following factors:
• We opened 62 Hibbett Sports stores and 1 Sports Additions store and closed 9 Hibbett
Sports stores for a net stores opened of 54 stores in the 52 weeks ended January 29, 2005.
New stores and stores not in the comparable store net sales calculation accounted for $40.9
million of the increase in net sales.
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