Hibbett Sports 2010 Annual Report Download - page 3

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DEAR FELLOW STOCKHOLDERS:
While in the midst of a challenging period for consumer spending, our goal for Fiscal 2010 was to be
one of the premier growth stories in retail sporting goods. We delivered on that goal. It was a great year,
highlighted by a record finish in the fourth quarter, year-over-year improvement in operating margins
and a 10% increase in earnings per share. We’re also proud of the fact we were able to reduce costs
through disciplined operating expense management. We are even more excited about our outlook for
Fiscal 2011 and the infrastructure investments we have made and will continue to make.
Our successful model over the last 60 years has been anchored by growth in small markets throughout
the Sunbelt. We will continue this strategy by growing in small markets where we are needed by
consumers, landlords and vendors. In our 24 state operating area, we have specifically identified 350
to 375 additional small markets where we intend to open in the future. During these tough economic
times, we have been very successful in the strategy of increasing the selling square footage of our high-
performing stores. Last year we expanded 20 locations, and expect to expand at least 20 more in the
next twelve months.
In the last several years, we have made considerable investments in systems that will support our growth
over the coming years. In Fiscal 2010, we implemented software tools that will aid our merchants and
planners in developing more localized assortments for our small markets. Later this year, we will be
implementing software enhancements for that process as well as tools to increase our ability to define
market level customer demand by refining our replenishment process. In February, we introduced a
Labor Management application that is assisting stores in the allocation of store personnel to achieve our
customer service goals.
We continue to make improvements in our customer experience. Delivering relevant and timely
communication to our most loyal customers has proven to be an asset to Hibbett Sports. We currently
have over 1 million Hibbett Sports MVP reward members, up from 600,000 this time a year ago. In our
search for new loyal customers, we have begun to expand our presence in the outdoor category by adding
The North Face and Columbia to our vendor line-up in both apparel and footwear while still growing
our presence with Nike and Under Armour. These brands will play a key role in our success this year.