IMPORTANT NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This document contains "forward-looking statements" as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address future events, developments and results. They include statements preceded by, followed by or including words such as "believe," "anticipate," "expect," "intend," "plan" or "estimate." For example, our forward-looking statements include statements regarding:

· our expectations concerning store locations, types and size;

· the trends relating to data processing costs, store traffic, transaction size and the customer experience;

· the costs and possible outcomes of pending legal actions and other contingencies;

· our cash needs and capital expenditures, including our intentions and ability to fund our new stores and other future capital expenditures and working capital requirements;

· our plans to build and own a new wholesaling and logistics facility and to own a new corporate headquarters;

· our ability and plans to renew or increase our revolving credit facilities;

· our estimates and assumptions as they relate to the preparation of our unaudited condensed consolidated financial statements including our estimates of economic and useful lives of depreciable assets and leases, our anticipated annual effective tax rate based on expected taxable income and the expected tax deductions from future employee stock option exercises; and

· seasonality and the effect of inflation.

You should assume that the information appearing in this report is accurate only as of the date it was issued. Our business, financial condition, results of operations and prospects may have changed since that date. For a discussion of the risks, uncertainties and assumptions that could affect our future events, developments or results, you should carefully consider the risk factors described from time to time in our other documents and reports, including the factors described under "Risk Factors," "Business" and "Properties" in our Form 10-K for the fiscal year ended January 28, 2012 filed with the Securities and Exchange Commission on March 26, 2012. You should also read such information in conjunction with our unaudited condensed financial statements and related notes and "Management Discussion and Analysis of Financial Condition and Results of Operations" in this report.

Our forward-looking statements could be wrong in light of these risks, uncertainties and assumptions. The future events, developments or results described in this report could turn out to be materially different. We have no obligation to publicly update or revise our forward-looking statements after the date of this Quarterly Report and you should not expect us to do so. Investors should also be aware that while we do, from time to time, communicate with securities analysts and others, we do not, by policy, selectively disclose to them any material non-public information with any statement or report issued by any analyst regardless of the content of the statement or report. We do not, by policy, confirm forecasts or projections issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.

INVESTOR ACCESS TO COMPANY FILINGS

We make available free of charge on our website, www.hibbett.com under the heading "Investor Relations," copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ("Securities Exchange Act") as well as all Forms 4 and 5 filed by our executive officers and directors, as soon as the filings are made publicly available by the Securities and Exchange Commission on its EDGAR database at www.sec.gov. In addition to accessing copies of our reports online, you may request a copy of our Annual Report on Form 10-K for the fiscal year ended January 28, 2012, at no charge, by writing to: Investor Relations, Hibbett Sports, Inc., 451 Industrial Lane, Birmingham, Alabama 35211.

General Overview

Hibbett Sports, Inc. operates sporting goods stores in small and mid-sized markets, predominantly in the South, Mid-Atlantic and Midwest. We offer convenient locations and a broad assortment of quality branded footwear, apparel and equipment with a high level of customer service. As of July 28, 2012, we operated a total of 837 retail stores composed of 817 Hibbett Sports stores, 19 Sports Additions athletic shoe stores and 1 Sports & Co. superstore in 26 states.

Our primary retail format and growth vehicle is Hibbett Sports, an approximately 5,000 square foot store located primarily in strip centers which are usually accompanied by a Wal-Mart store. Approximately 77.5% of our Hibbett Sports store base is located in strip centers, which include free-standing stores, while approximately 22.5% of our Hibbett Sports store base is located in enclosed malls. We expect to continue our store base growth in strip centers versus enclosed malls.

The lease for our corporate headquarters and distribution center expires in December 2014. In July 2012, we purchased land in Alabaster, Alabama on which we plan to build and own a wholesaling and logistics facility to replace our current distribution facility. We also plan to own versus lease our new corporate headquarters. We anticipate the cost of both projects will be approximately $35.0 million to $40.0 million over the next two years.

We operate on a 52- or 53-week fiscal year ending on the Saturday nearest to January 31 of each year. The consolidated statements of operations for fiscal year ended February 2, 2013 will include 53 weeks of operations while the consolidated statements of operations for fiscal year ended January 28, 2012 included 52 weeks of operations. We have operated as a public company and have been incorporated under the laws of the State of Delaware since October 6, 1996.

We utilize a merchandise management system that allows us to identify and monitor trends. However, this system does not produce U.S. GAAP financial information by product category. Therefore, it is impracticable to provide U.S. GAAP net sales by product category.

Comparable store net sales data for the periods presented reflects sales for our traditional format Hibbett Sports and Sports Additions stores open throughout the period and the corresponding period of the prior fiscal year. If a store remodel, relocation or expansion results in the store being closed for a significant period of time, its sales are removed from the comparable store base until it has been open a full 12 months. Our Sports & Co. store is not and has never been included in the comparable store net sales comparison because we have not opened a superstore since September 1996 and we do not have plans to open additional superstores in the future.

Executive Summary

The strong sales trend which began in Fiscal 2011 is still continuing into Fiscal 2013 as we achieved our 11th consecutive quarter of comparable store sales increases. Our overall positive sales performance in the second quarter of Fiscal 2013 was driven by strong performance in branded accessories, which posted double-digit comparable store sales increases, while branded and licensed apparel posted high single-digit comparable store sales increases. Footwear also posted comparable store sales increases in the mid single-digit range for the second quarter. Net sales for the thirteen weeks ended July 28, 2012, increased 8.0% to $165.4 million compared with $153.1 million for the thirteen weeks ended July 30, 2011. Comparable store sales increased 4.8% versus an increase of 5.9% in the second quarter of last year. Net income for the second quarter of Fiscal 2013 increased 32.9% to $7.9 million compared with $5.9 million for the second quarter of Fiscal 2012. Earnings per diluted share increased 42.9% to $0.30 compared with $0.21 for the second quarter of Fiscal 2012.

Net sales for the twenty-six weeks ended July 28, 2012, increased 11.7% to $398.4 million compared with $356.8 million for the twenty-six weeks ended July 30, 2011. Comparable store sales increased 8.4% versus an increase of 6.4% in the twenty-six weeks ended July 30, 2011. Net income for the twenty-six weeks of Fiscal 2013 increased 25.6% to $34.3 million compared with $27.3 million for the twenty-six weeks of Fiscal 2012. Earnings per diluted share increased 30.6% to $1.28 compared with $0.98 for the twenty-six weeks of Fiscal 2012.

During the second quarter of Fiscal 2013, we opened 7 new stores, expanded 3 high performing stores and closed 5 underperforming stores, bringing the store base to 837 in 26 states as of July 28, 2012. During the twenty-six weeks of Fiscal 2013, we opened 14 new stores, expanded 5 high performing stores and closed 9 underperforming stores. We ended the second quarter of Fiscal 2013 with $71.5 million of available cash and cash equivalents on the unaudited condensed consolidated balance sheet and full availability under our credit facilities. We also acquired 176,443 and 493,403 shares of our common stock, respectively, for a total expenditure of $10.2 million and $27.0 million, respectively, under our stock repurchase authorization during the thirteen and twenty-six weeks ended July 28, 2012. The repurchase included 8,891 and 68,386 shares, respectively, acquired from holders of restricted stock unit awards to satisfy tax withholding requirements of $0.5 million and $3.7 million, respectively, for the thirteen and twenty-six weeks ended July 28, 2012.

Significant Accounting Estimates

The unaudited condensed consolidated financial statements are prepared in conformity with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. Our significant accounting policies and estimates are described more fully in the Annual Report on Form 10-K for the fiscal year ended January 28, 2012, and filed on March 26, 2012. There have been no changes in our accounting policies in the current period that had a material impact on our unaudited condensed consolidated financial statements.

Recent Accounting Pronouncements

See Note 2 of this Form 10-Q for the period ended July 28, 2012, for information regarding recent accounting pronouncements.

Results of Operations

Thirteen Weeks Ended July 28, 2012 Compared to Thirteen Weeks Ended July 30, 2011

Net sales. Net sales increased $12.3 million, or 8.0%, to $165.4 million for the thirteen weeks ended July 28, 2012 from $153.1 million for the comparable period in the prior year. Furthermore:

· We opened 7 Hibbett Sports stores, expanded 3 high performing stores and closed 5 underperforming stores in the thirteen weeks ended July 28, 2012. New stores and stores not in the comparable store net sales calculation increased net sales by $5.2 million, or 3.4% of net sales, during the thirteen weeks.

· We experienced a 4.8% increase in comparable store net sales, which amounted to $7.1 million, or 4.6% of net sales, for the thirteen weeks ended July 28, 2012.

During the thirteen weeks ended July 28, 2012, 775 stores were included in comparable store net sales. In the period, we experienced higher traffic per store, an increase in dollars per transaction, but a decrease in items sold per transaction. We believe we are improving the customer service experience by satisfying more customers with our in-stock position and product assortments specific to each store's demographic and geographic needs. The increase in comparable store sales was driven by strong performances in men's and youth active wear, licensed apparel, girls and boys footwear and branded headwear.

Gross profit. Cost of goods sold includes the cost of inventory, occupancy costs for stores and occupancy and operating costs for the distribution center. Gross profit was $56.5 million, or 34.2% of net sales, in the thirteen weeks ended July 28, 2012, compared with $50.6 million, or 33.1% of net sales, in the same period of the prior fiscal year.

· Gross profit percentage was impacted primarily by fewer company-wide promotions in the second quarter as these promotions shifted into third quarter to coincide with a delayed back-to-school season in many of our markets.

· Distribution expense as a percentage of net sales increased slightly by 3 basis points resulting primarily from an increase in salary and benefit costs. We marginally leveraged inbound freight costs as gas prices settled somewhat, but expect to see overall increases in this expense line in Fiscal 2013 based on continued volatility in the oil markets and unrest in the Middle East and the rise of fuel prices at the end of the second quarter.

· Store occupancy expense as a percentage of net sales decreased 33 basis points. The largest decrease as a percent to net sales was rent expense as we continue to experience rent savings through lease renegotiations and from co-tenancy violations by our landlords, offset somewhat by a decrease in construction allowances which offsets rent expense. We believe we are a valued tenant for our landlords, which enhances our ability to renegotiate lease terms at renewal, and we have had success over the last few years in doing so as our landlords are struggling to keep their properties occupied.

Store operating, selling and administrative expenses. Store operating, selling and administrative expenses were $41.0 million, or 24.8% of net sales, for the thirteen weeks ended July 28, 2012, compared to $38.0 million, or 24.8% of net sales, for the comparable period a year ago. We closely monitor and carefully manage these costs. For the second quarter:

· Total salary expense increased in dollars but decreased 9 basis points as a percentage of net sales, primarily due to the leverage resulting from the increase in net sales. Our expectation is that these costs will remain relatively stable as a percentage to net sales. Benefit costs increased 38 basis points as a percent to net sales as health insurance costs continued an increase from the first quarter resulting from higher claims volume compared to last year. We expect an overall increase in benefit costs in Fiscal 2013 compared to last year.

· Stock-based compensation expense decreased 15 basis points due primarily to a higher than average forfeiture of restricted stock unit awards in the period.

· Credit card fees decreased 18 basis points as a percentage of net sales resulting from lower debit card processing interchange rates that will anniversary in the third quarter of this year.

Depreciation and amortization. Depreciation and amortization as a percentage of net sales was 1.9% in the thirteen weeks ended July 28, 2012, compared to 2.2% for the comparable period a year ago. We attribute the decrease in depreciation expense as a percentage of net sales to a decrease in the overall investment in leasehold improvements in recent years as more of the build-out work is being done by landlords, offset somewhat by changes in estimates of useful lives of leasehold improvements in some underperforming stores.

Provision for income taxes. The combined federal, state and local effective income tax rates as percentages of pre-tax income were 36.0% and 36.2% for the thirteen weeks ended July 28, 2012 and July 30, 2011, respectively. The decrease in rate resulted primarily from a favorable adjusting entry related to the filing of the January 28, 2012, federal and state income tax returns.

Twenty-Six Weeks Ended July 28, 2012 Compared to Twenty-Six Weeks Ended July 30, 2011

Net sales. Net sales increased $41.6 million, or 11.7%, to $398.4 million for the twenty-six weeks ended July 28, 2012 from $356.8 million for the comparable period in the prior year. Furthermore:

· We opened 14 Hibbett Sports stores, expanded 5 high performing stores and closed 9 underperforming stores in the twenty-six weeks ended July 28, 2012. New stores and stores not in the comparable store net sales calculation increased net sales by $12.8 million, or 3.6% of net sales, during the twenty-six weeks.

· We experienced a 8.4% increase in comparable store net sales, which amounted to $28.8 million, or 8.1% of net sales, for the twenty-six weeks ended July 28, 2012.

During the twenty-six weeks ended July 28, 2012, 767 stores were included in comparable store net sales. We are experiencing higher traffic per store and increases in dollars per transaction. We believe we are improving the customer service experience by satisfying more customers with our in-stock position and product assortments specific to each store. The increase in comparable store sales was driven by strong performances in licensed apparel, men's and youth active wear, youth footwear and accessories.

Gross profit. Cost of goods sold includes the cost of inventory, occupancy costs for stores and occupancy and operating costs for the distribution center. Gross profit was $145.0 million, or 36.4% of net sales, in the twenty-six weeks ended July 28, 2012, compared with $126.4 million, or 35.4% of net sales, in the same period of the prior fiscal year.

· Gross profit percentage was impacted primarily by reduced shrinkage and fewer company-wide promotions in the year-to-date period as strong sales performance, coupled with the shift of back-to-school promotions from the second quarter into the third quarter, negated the need for liquidating promotions in the first half of the year. As more of our technology investments for inventory management are implemented, we expect to continue to see an overall improvement in our gross profit percentage for the year.

· Distribution expense as a percentage of net sales increased slightly by 7 basis points resulting primarily from an increase in salary and benefit costs and data processing expenses. We marginally leveraged inbound freight costs as gas prices settled somewhat, but expect to see overall increases in this expense line in Fiscal 2013 based on continued volatility in the oil markets and unrest in the Middle East and the rise of fuel prices at the end of the second quarter.

· Store occupancy expense as a percentage of net sales decreased 55 basis points. The largest decrease as a percent to net sales was rent expense as we continue to experience rent savings through lease renegotiations and from co-tenancy violations by our landlords, offset somewhat by a decrease in construction allowances which offsets rent expense. We believe we are a valued tenant for our landlords, which enhances our ability to renegotiate lease terms at renewal, and we have had success over the last few years in doing so as our landlords are struggling to keep their properties occupied.

Store operating, selling and administrative expenses. Store operating, selling and administrative expenses were $83.8 million, or 21.0% of net sales, for the twenty-six weeks ended July 28, 2012, compared to $76.3 million, or 21.4% of net sales, for the comparable period a year ago. We closely monitor and carefully manage these costs. For the twenty-six week period:

· Total salary expense increased in dollars but decreased 44 basis points as a percentage of net sales, primarily due to the leverage resulting from the increase in net sales. Our expectation is that these costs will remain relatively stable as a percentage to net sales. Benefit costs increased 46 basis points as a percent to net sales as we experienced an increase in health insurance costs resulting from higher claims volume compared to last year. We expect an overall increase in benefit costs in Fiscal 2013 compared to last year.

· Stock-based compensation expense increased 8 basis points due primarily due to an increase in the accrual of estimated achievement of performance-based awards in the current fiscal year offset somewhat by the higher than average forfeiture of restricted stock unit awards in the second quarter.

· Credit card fees decreased 16 basis points as a percentage of net sales resulting from lower debit card processing interchange rates that will anniversary in the third quarter of this year.

Depreciation and amortization. Depreciation and amortization as a percentage of net sales was 1.6% in the twenty-six weeks ended July 28, 2012, compared to 1.8% for the comparable period a year ago. We attribute the decrease in depreciation expense as a percentage of net sales to a decrease in the overall investment in leasehold improvements in recent years as more of the build-out work is being done by landlords, offset somewhat by changes in estimates of useful lives of leasehold improvements in some underperforming stores.

Provision for income taxes. The combined federal, state and local effective income tax rates as percentages of pre-tax income were 37.4% and 37.1% for the twenty-six weeks ended July 28, 2012 and July 30, 2011, respectively. The increase in rate resulted primarily from lower federal income tax credits as a result of the expiration of the Work Opportunity Tax Credit program.

Liquidity and Capital Resources

Our capital requirements relate primarily to new store openings, stock repurchases and working capital requirements. Historically, we have funded our cash requirements through our cash flow from operations and occasionally from borrowings under our revolving credit facilities. Due to the low interest rates currently available, we are using excess cash on deposit to offset bank fees versus investing such funds in interest-bearing deposits.

Our unaudited condensed consolidated statements of cash flows are summarized as follows (in thousands):

                                                         Twenty-Six Weeks Ended
                                                         July 28,        July 30,
                                                           2012            2011
Net cash provided by operating activities:             $     44,636      $  25,086
Net cash used in investing activities:                       (7,437 )       (6,450 )
Net cash used in financing activities:                      (20,870 )      (28,967 )
Net increase (decrease) in cash and cash equivalents   $     16,329      $ (10,331 )

Operating Activities.

Typically, we use cash flow from operations to increase inventory in advance of peak selling seasons, such as winter holidays and back-to-school. Inventory levels are reduced in connection with higher sales during the peak selling seasons and this inventory reduction, combined with proportionately higher net income, typically produces a positive cash flow.

Net cash provided by operating activities was $44.6 million for the twenty-six weeks ended July 28, 2012 compared with net cash provided by operating activities of $25.1 million for the twenty-six weeks ended July 30, 2011. The largest source of cash during the period was an increase in accounts payable. The largest uses of cash during the period were increases in inventories and prepaid expenses. At July 28, 2012, the inventory level on a per store basis decreased 1.1% while total inventory increased 3.2% compared to July 30, 2011, due to a slight shift in the timing of new receipts that was planned by our merchants. The increase in prepaid expenses is primarily the result of the timing of estimated income tax payments. Non-cash charges included depreciation and amortization expense and stock-based compensation expense.

Investing Activities.

Net cash used in investing activities in the twenty-six weeks ended July 28, 2012 totaled $7.4 million compared with net cash used in investing activities of $6.5 million in the twenty-six weeks ended July 30, 2011. Capital expenditures used $7.2 million (which included the purchase of land for our new wholesaling and logistics facility) and $6.2 million of cash in the twenty-six weeks ended July 28, 2012 and July 30, 2011, respectively. We use cash in investing activities to open new stores and remodel, expand or relocate existing stores. We opened 14 new stores and relocated, expanded or remodeled 10 existing stores during the twenty-six weeks ended July 28, 2012 as compared to opening 16 new stores and relocating or expanding 10 existing stores during the twenty-six weeks ended July 30, 2011.

For the fiscal year ending February 2, 2013, we estimate the cash outlay for capital expenditures will be approximately $15.9 million, excluding expenditures for new corporate headquarters and a new wholesaling and logistics facility. This estimated outlay relates to the opening of approximately 60 new stores, remodeling and expansion of selected existing stores and information system upgrades. Of the total budgeted dollars for capital expenditures for Fiscal 2013, we anticipate that approximately 55% will be related to the opening of new stores and remodeling and/or relocating existing stores. Approximately 34% will be related to information systems with the remaining 11% related primarily to transportation equipment, automobiles and security equipment for our stores.

As of July 28, 2012, we had an approximately $1.1 million outlay remaining on enhancements to our merchandising system relating to demand forecasting and markdown optimization. We believe these enhancements will further advance our ability to improve gross profit across all markets and merchandise by providing another tool for managing our inventory at the store level.

Financing Activities.

Net cash used in financing activities was $20.9 million in the twenty-six weeks ended July 28, 2012 compared to net cash used in financing activities of $29.0 million in the prior year period. The cash fluctuation was primarily due to the repurchase of shares of our common stock when compared to the same period last year somewhat offset by proceeds received from options exercised and shares purchased under the employee stock purchase plan. As stock options are exercised, we will continue to receive proceeds and expect a tax deduction; however, the amounts and timing cannot be predicted.

At July 28, 2012, we had two unsecured revolving credit facilities that allow borrowings up to $30.0 million and $50.0 million, respectively, and which renew in August and November 2012, respectively. The facilities do not require a commitment or agency fee nor are there any covenant restrictions. Subsequent to July 28, 2012, we renewed our existing August facility of $30.0 million with an interest rate at the higher of the bank's prime rate (as set by the bank), the federal funds rate plus 0.5% or LIBOR. The renewal was effective August 24, 2012 and will expire on August 23, 2013. The facility is unsecured and does not require a commitment or agency fee nor are there any covenant restrictions. We plan to renew the November facility when it expires and do not anticipate any problems in doing so; however, no assurance can be given that we will be granted a renewal or terms which are acceptable to us. We had no debt outstanding under either of these facilities as of July 28, 2012.

Based on our current operating and store opening plans and plans for the repurchase of our common stock, we believe that we can fund our cash needs for the foreseeable future through cash generated from operations and, if necessary, through periodic future borrowings against our credit facilities.

Off-Balance Sheet Arrangements.

We have not provided any financial guarantees as of July 28, 2012. All . . .