UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(mark one)

For the quarterly period ended: October 30, 2004

— OR —

For the transaction period from _________ to ________

COMMISSION FILE NUMBER 000-20969

HIBBETT SPORTING GOODS, INC.
(Exact name of registrant as specified in its charter)

(205) 942-4292
(Registrant’s telephone number including area code)

NONE
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes    X          No          

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Yes    X          No          

Indicate the number of shares outstanding of each of the issuer's common stock, as of the latest practicable date: Shares of common stock, par value $.01 per share, outstanding as of December 8, 2004 were 23,473,323 shares.

HIBBETT SPORTING GOODS, INC.

INDEX

Page No.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PART II. OTHER INFORMATION

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HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)

See notes to unaudited condensed consolidated financial statements.

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HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars In Thousands, Except Share and Per Share Amounts)

See notes to unaudited condensed consolidated financial statements.

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HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

See notes to unaudited condensed consolidated financial statements.

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HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation & Accounting Policies

        The accompanying unaudited condensed consolidated financial statements of Hibbett Sporting Goods, Inc. and its wholly-owned subsidiaries (the “Company” or “we” or “Hibbett”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended January 31, 2004. In our opinion, the unaudited condensed consolidated financial statements included herein contain all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position as of October 30, 2004 and January 31, 2004 and the results of our operations and cash flows for the periods presented.

        We have experienced and expect to continue to experience seasonal fluctuations in our net sales and operating income. Therefore, the results of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year.

Interest

        Interest income for the thirteen and thirty-nine weeks ended October 30, 2004 was $147,455 and $309,223, respectively, shown net of interest expense of $8,506 and $23,283, respectively. Interest income for the thirteen and thirty-nine weeks ended November 1, 2003 was $32,591 and $75,250, respectively, shown net of interest expense of $13,453 and $40,340, respectively.

Advertising

        We participate in various advertising and marketing cooperative programs with our vendors, who, under these programs, reimburse us for certain costs incurred. A receivable for cooperative advertising to be reimbursed is recorded as a decrease to expense as the reimbursements are earned. The following table presents the components of our advertising expense:

Sales Returns, Exchanges and Allowances

        For the thirteen weeks ended October 30, 2004 and November 1, 2003, sales returns, exchanges and allowances equaled $2.5 million and $2.0 million, respectively. For the thirty-nine weeks ended October 30, 2004 and November 1, 2003, sales returns, exchanges and allowances were $6.9 million and $5.6 million, respectively.

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Reportable Segments

        We are an operator of sporting good stores in small to mid-sized markets predominately in the Southeast, Mid-Atlantic and Midwest. Given the economic characteristics of our store formats, the similar nature of the products we sell, the type of customers and methods of distribution, our operations constitute only one reportable segment.

Customers

        No customer accounted for more than 5% of our sales during the thirteen and thirty-nine weeks ended October 30, 2004 or November 1, 2003.

Vendors

        For the thirteen weeks ended October 30, 2004 Nike, our largest vendor, represented approximately 39.6% of our purchases. Reebok represented approximately 9.0% of our purchases and New Balance represented approximately 8.2% of our purchases. For the thirteen weeks ended November 1, 2003, Nike, our largest vendor, represented approximately 32.4% of our purchases, Reebok represented approximately 13.9% of our purchases and Adidas represented approximately 5.1% of our purchases.

        For the thirty-nine weeks ended October 30, 2004, Nike, our largest vendor, represented approximately 39.3% of our purchases. New Balance represented approximately 9.9% of our purchases and Reebok represented approximately 8.1% of our purchases. For the thirty-nine weeks ended November 1, 2003, Nike, our largest vendor, represented approximately 35.6% of our purchases, Reebok represented approximately 10.8% of our purchases and New Balance represented approximately 9.1% of our purchases.

Store Opening and Closing Costs

        New store opening costs are charged to expense as incurred. Store opening costs primarily include store payroll and general operating costs incurred prior to the store opening.

        We consider individual store closings to be a normal part of operations and expense all related costs at the time of closing.

Revenue Recognition

        All merchandise sales occur on-site in our retail stores, and the customers have the option of paying the full purchase price of the merchandise upon sale or paying a down payment and placing the merchandise on layaway. The customer may make further payments in installments, but we must receive the entire purchase price for merchandise placed on layaway within 30 days. We record the down payment and any installments as deferred revenue until the customer pays the entire purchase price for the merchandise and takes possession of such merchandise. We recognize merchandise revenues at the time the customer takes possession of the merchandise.

        We recognize the cost of coupon sales incentives at the time the related revenue is recognized. Proceeds received from the issuance of gift cards are initially recorded as deferred revenue, and such proceeds are subsequently recognized as revenue at the time the customer redeems such gift cards and takes possession of the merchandise.

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Stock-Based Compensation

        We account for our stock option plans under the recognition and measurement principles of Accounting Pronouncements Bulletin (APB) Opinion No. 25, “Accounting for Stock Issued to Employees”, and related Interpretations. No stock-based employee compensation cost for our plans are reflected in net income, as all options granted under the plans have an exercise price equal to the market value of the underlying common stock on the date of grant.

        The following table illustrates the effect on earnings and earnings per share if we had applied the fair value recognition provisions of Statement of Financial Accounting Standards No. 148 (“SFAS 148”), “Accounting for Stock-Based Compensation – Transition and Disclosure,” to stock-based employee compensation (in thousands except per share amounts):

        The weighted average assumptions for determining compensation costs for the thirteen weeks ended October 30, 2004 and November 1, 2003, under the fair value method using the Black-Scholes option-pricing model include (i) risk-free interest rates based on zero-coupon governmental issues on each grant date with the maturity equal to the expected term of the options (a range of 3.4% to 3.6% for fiscal 2005 and 2.4% for fiscal 2004), (ii) an expected stock volatility ranging between 52.3% and 52.4% for fiscal 2005 and 56% for fiscal 2004, and (iii) no expected dividend yield. The weighted average assumptions for determining compensation costs for the thirty-nine weeks ended October 30, 2004 and November 1, 2003, under the fair value method using the Black-Scholes option-pricing model include (i) risk-free interest rates based on zero-coupon governmental issues on each grant date with the maturity equal to the expected term of the options (a range of 2.9% to 3.6% for fiscal 2005 and 2.7% for fiscal 2004), (ii) an expected stock volatility ranging between 51.3% and 54.5% for fiscal 2005 and 56% for fiscal 2004, and (iii) no expected dividend yield.

2. Properties

        We currently lease all of our existing 468 store locations and expect that our policy of leasing rather than owning will continue as we continue to expand. Our leases typically provide for terms of five to seven years with options on the part of Hibbett to extend. Most leases also contain a three-year early termination option if projected sales levels are not met and a kickout clause if co-tenancy provisions are violated. We believe that this lease strategy enhances our flexibility to pursue various expansion opportunities resulting from changing market conditions and to periodically re-evaluate store locations. Our ability to open new stores is contingent upon locating satisfactory sites, negotiating favorable leases and recruiting and training additional qualified management personnel.

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        As current leases expire, we believe that we will be able to either obtain lease renewals for present store locations or to obtain leases for equivalent or better locations in the same general area. For the most part, we have not experienced any significant difficulty in either renewing leases for existing locations or securing leases for suitable locations for new stores. Based on our belief that we maintain good relations with our landlords, that most of our leases are at below market rents and that we have generally been able to secure leases for suitable locations, we believe that our lease strategy will not be detrimental to our business, financial condition or results of operations.

        Our offices and our distribution center are leased under an operating lease expiring in 2014. We own the Team division’s warehousing and distribution center located in Birmingham, Alabama.

3. Earnings Per Share

        Basic earnings per share (“EPS”) exclude dilution and are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock are exercised or converted into common stock or resulted in the issuance of common stock that then shared in earnings. Diluted EPS has been computed based on the weighted average number of shares outstanding, including the effect of outstanding stock options, if dilutive, in each respective period.

        A reconciliation of the weighted average shares for basic and diluted EPS is as follows:

        For the thirteen and thirty-nine weeks ended October 30, 2004, there were 232,275 and 267,444 anti-dilutive options, respectively. For the thirteen and thirty-nine weeks ended November 1, 2003, there were no anti-dilutive options.

4. Stockholders’ Investment

        We offer participation in stock option plans to certain employees and individuals. Awards typically vest and become exercisable in incremental installments over a period of five years after the date of grant and expire on the tenth anniversary of the date of grant. For the thirty-nine weeks ended October 30, 2004, 208,879 shares were issued upon exercise of options, resulting in an increase in Stockholders’ Investment of $2.5 million and an increase in Paid-in-capital of $1.3 million attributable to the tax benefit received from the exercise of these options. For the thirty-nine weeks ended October 30, 2004, 8,727 shares were purchased under the Employee Stock Purchase Plan resulting in an increase in Stockholders’ Investment of $0.2 million.

5. Stock Repurchase Plan

        In August 2004, the Board of Directors authorized the repurchase of up to $30.0 million of our outstanding common stock. Stock repurchase may be made until August 19, 2005 and may be made in the open market or in negotiated transactions, with the amount and timing of repurchases dependent on market conditions at the discretion of our management. In November 2004, the Board of Directors increased the maximum authorization to $40.0 million. During the thirteen weeks ended October 30, 2004, the company had repurchased 365,400 shares at a cost of approximately $7.2 million.

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6. Stock Split

        On March 10, 2004, our Board of Directors declared a 3-for-2 stock split on our Common Stock to holders of record on April 1, 2004, effective April 16, 2004. All share and per share data presented in this document reflect the effects of this split.

7. Contingencies

        We are party to various legal proceedings incidental to our business. In our opinion, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect the financial position or results of operations of the Company.

8. Recent Accounting Pronouncements

        In December 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46 (revised 2003), “Consolidation of Variable Interest Entities,” which addresses how a business enterprise should evaluate whether it has a controlling financial interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN 46R replaces Interpretation 46, “Consolidation of Variable Interest Entities,” which was issued in January 2003. We are required to apply FIN 46R to variable interests in VIEs created after December 31, 2003. For variable interests in VIEs created before January 1, 2004, the Interpretation will be applied beginning on January 1, 2005. For any VIEs that must be consolidated under FIN 46R that were created before January 1, 2004, the assets, liabilities and non-controlling interests of the VIE initially would be measured at their carrying amounts with any difference between the net amount added to the balance sheet and any previously recognized interest being recognized as the cumulative effect of an accounting change. If determining the carrying amounts is not practicable, fair value at the date FIN 46R first applies may be used to measure the assets, liabilities and non-controlling interest of the VIE. We do not expect Interpretation 46 or FIN 46R to have any impact on our consolidated financial statements.

        SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” was issued in May 2003. This Statement establishes standards for the classification and measurement of certain financial instruments with characteristics of both liabilities and equity. The Statement also includes required disclosures for financial instruments within its scope. For us, the Statement was effective for instruments entered into or modified after May 31, 2003 and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments. For certain mandatorily redeemable financial instruments, the Statement will be effective for us on January 31, 2005. The effective date has been deferred indefinitely for certain other types of mandatorily redeemable financial instruments. We currently do not have any financial instruments outstanding that are within the scope of this Statement.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

        Hibbett Sporting Goods, Inc. (“we” or “Hibbett” or the “Company”) operates sporting goods stores in small to mid-sized markets, predominantly in the Southeast, Mid-Atlantic and Midwest. Our stores offer a broad assortment of quality footwear, apparel and athletic equipment with a high level of customer service. Our merchandise assortment features a broad selection of brand name merchandise emphasizing team sports and fitness complemented by a selection of localized apparel and accessories designed to appeal to a wide range of customers within each market. We believe our stores are among the primary retail distribution avenues for brand name vendors that seek to penetrate our target markets.

        As of October 30, 2004, we operated 447 Hibbett Sports stores, as well as 17 smaller-format Sports Additions athletic shoe stores and four larger-format Sports & Co. superstores, in 22 states. As of October 30, 2004 we operated 468 stores in 22 contiguous states. Of these stores, 180 are located in malls and 288 are located in strip shopping centers. Our primary retail format and growth vehicle is Hibbett Sports, a roughly 5,000 square-foot store located in enclosed malls and dominant strip centers which are generally the center of commerce within the area and which are generally anchored by a Wal-Mart store. We target markets with county populations that range from 30,000 to 100,000. By targeting smaller markets, we believe we achieve significant strategic advantages, including numerous expansion opportunities, comparatively low operating costs and a more limited competitive environment than generally faced in larger markets. In addition, we establish greater customer and vendor recognition as the leading sporting goods retailer in these local communities.

        Since fiscal 1994, we have grown our store base from 49 to 468 stores. Our expansion strategy is to continue to open Hibbett Sports stores in our target markets. We plan to open between 58 to 62 Hibbett Sports stores, net of store closings, in fiscal 2005. We do not expect that the average size of our stores opened in fiscal 2005 will vary significantly from the average size of stores opened in fiscal 2004. Hibbett historically has comparable store sales in the low to mid-single digit range and we plan to increase total square footage by approximately 15% in fiscal 2005. We believe our sales percentage growth will be in the mid to upper teens in fiscal 2005.

        Over the past three years, we have increased our product margin due to lower retail reductions, improved vendor discounts, increased efficiencies in logistics and favorable leveraging of our store occupancy costs. However, we expect gross profit as a percentage of net sales to decrease slightly in fiscal 2005 due to the softness in licensed apparel and a change in sales mix towards footwear. Certain categories and subcategories carry a relatively higher or lower margin, and variations in the strength of product categories within our sales mix may have a material effect on our results of operations.

        Due to our increased sales, we have leveraged our store operating, selling and administrative expenses and offset recent increases in certain compliance related expenses. With our expected sales increase, we plan to leverage expenses 40 to 60 basis points in fiscal 2005. We also expect to continue to generate sufficient cash to enable us to expand and remodel our store base and provide capital expenditures for both warehouse and advances in technology and system development projects.

        On August 19, 2004, our Board of Directors approved the purchase by the Company of up to $30.0 million of our outstanding common stock. Approximately 23.1 million shares of our common stock are currently outstanding. Repurchases may be made over time in the open market or in negotiated transactions, with the amount and timing of repurchases dependent on market conditions, at the discretion of our management, in consultation with a committee of the Board, for the period of one year, ending on August 19, 2005. On November 18, 2004, our Board of Directors voted to increase this authorization of repurchase to $40.0 million.

        We operate on a 52- or 53-week fiscal year ending on the Saturday nearest to January 31 of each year. We have been incorporated under the laws of the State of Delaware since October 6, 1996.

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Results of Operations

        The following table sets forth consolidated statement of operations items expressed as a percentage of net sales for the periods indicated:

Thirteen Weeks Ended October 30, 2004 Compared to Thirteen Weeks Ended November 1, 2003

        Net sales. Net sales increased $13.7 million, or 17.5%, to $92.1 million for the thirteen weeks ended October 30, 2004 from $78.4 million for the comparable period in the prior year. We attribute this increase to the following factors:

        The increase in comparable store sales was primarily due to increased sales in footwear and team sports equipment.  Footwear sales, led by women’s and kid’s, were driven by performance and retro styles such as Nike Shox, Nike Air Force 1, Nike Impax, Nike Miler, K-Swiss and New Balance.  Equipment sales overall were up and were driven by strong sales gains in football, soccer and baseball while demand for fitness product remained weak. Increased apparel sales in the performance category, primarily Under Armour and Nike Dry-Fit, were offset by weak licensed product sales in pro apparel.

        Comparable store net sales data for the period 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. During the thirteen weeks ended October 30, 2004, we opened twenty-one Hibbett Sports stores and closed two Hibbett Sports stores.

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        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 $30.4 million or 33.0% of net sales, in the thirteen weeks ended October 30, 2004, as compared to $26.4 million, or 33.7% of net sales, in the same period of the prior fiscal year. The change in gross profit percentage was primarily attributable to a decrease in product margin in apparel as a percent to sales and a shift towards footwear. This was offset by favorable occupancy and warehousing costs.

        Store operating, selling and administrative expenses. Store operating, selling and administrative expenses were $18.7 million, or 20.3% of net sales, for the thirteen weeks ended October 30, 2004, as compared to $16.2 million, or 20.6% of net sales, for the comparable period a year ago. We attribute this decrease in store operating, selling and administrative expenses as a percentage of net sales to the following factors:

        The decrease in store operating, selling and administrative expenses was somewhat offset by a 34 basis point increase in professional fees related to Sarbanes-Oxley compliance and testing and a 7 basis point increase in credit card fees as a result of an increase in Visa and MasterCard interchange rates.

        Depreciation and amortization. Depreciation and amortization as a percentage of net sales decreased to 2.0% of net sales for the thirteen weeks ended October 30, 2004, compared with 2.3% of net sales for the same thirteen weeks last year. The reduction in depreciation and amortization expense as a percentage of net sales is due to an increase in sales and fewer capital expenditure purchases this quarter compared to the same thirteen weeks last year.

        Provision for income taxes. Provision for income taxes as a percentage of net sales was 4.0% in the thirteen weeks ended October 30, 2004, compared to 3.9% for the same thirteen weeks ended November 1, 2003, due to a slight increase in pre-tax income. The income tax rate as a percentage for pre-tax income was 37.3% and 36.5% for the thirteen weeks ended October 30, 2004 and November 1, 2003, respectively. We expect this percentage to increase slightly next year.

Thirty-Nine Weeks Ended October 30, 2004 Compared to Thirty-Nine Weeks Ended November 1, 2003

        Net sales. Net sales increased $40.7 million, or 17.8%, to $270.5 million for the thirty-nine weeks ended October 30, 2004, from $229.7 million for the comparable period in the prior year. We attribute this increase to the following factors:

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        The increase in comparable store sales was primarily due to increased sales in footwear. Footwear sales, led by women’s and kid’s, was driven by performance and retro styles such as Nike Shox, Nike Miler, K-Swiss and New Balance. Equipment sales overall were up primarily from increases in the team equipment area while demand for fitness equipment and individual sports remained weak. Increased apparel sales in the performance category, primarily Under Armour and Nike Dry-Fit, were offset by weak licensed product sales in pro apparel.

        Comparable store net sales data for the period reflect sales for our traditional format Hibbett Sports and Sports Additions stores open throughout the period and the corresponding period of the prior fiscal year. During the thirty-nine weeks ended October 30, 2004, we opened forty-seven Hibbett Sports stores and one Sports Additions and closed eight Hibbett Sports stores.

        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 $85.8 million, or 31.7% of net sales, in the thirty-nine weeks ended October 30, 2004, as compared to $73.4 million, or 31.9% of net sales, in the same period of the prior fiscal year. The decrease in gross profit percentage from the same period last year was primarily a result of an increase in markdowns as a result of the decline in apparel and a change in product mix.

        Store operating, selling and administrative expenses. Store operating, selling and administrative expenses were $52.9 million or 19.6% of net sales, for the thirty-nine weeks ended October 30, 2004, as compared to $46.3 million, or 20.1% of net sales, for the comparable period a year ago. The decrease in store operating, selling and administrative expenses as a percentage of net sales in the thirty-nine weeks ended October 30, 2004, is primarily attributable to the following factors:

        The decrease in store operating, selling and administrative expenses was somewhat offset by a 17 basis point increase in professional fees related to Sarbanes-Oxley compliance and testing.

        Depreciation and amortization. Depreciation and amortization as a percentage of net sales decreased to 2.0% of net sales for the thirty-nine weeks ended October 30, 2004, compared with 2.3% of net sales for the same thirty-nine weeks last year. The reduction in depreciation and amortization expense as a percentage of net sales is due to an increase in sales and relatively flat capital expenditure purchases this year compared to the same thirty-nine weeks last year.

        Provision for income taxes. Provision for income taxes as a percentage of net sales was 3.8%, in the thirty-nine weeks ended October 30, 2004, compared to 3.5% for the same thirty-nine weeks ended November 1, 2003, due to a 72 basis point increase in pre-tax income. The income tax rate as a percentage of pre-tax income was 37.3% and 36.5% for the thirty-nine weeks ended October 30, 2004 and November 1, 2003, respectively.

Liquidity and Capital Resources

        We use our capital primarily for opening new stores, for working capital and for stock repurchase. Our working capital needs are somewhat seasonal in nature and typically reach their peak near the end of the third and the beginning of the fourth quarter of our fiscal year. Historically, we have funded our cash requirements primarily through cash flows from operations and occasionally borrowings under our revolving credit facilities.

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        Our Statements of Cash Flows are summarized as follows (in thousands):

        Net income levels combined with fluctuations in inventory and accounts payable balances have historically driven net cash provided by operating activities. Inventory levels increased this year compared to the same thirty-nine weeks last year, but have decreased on a per store basis. Accordingly, net cash provided by operating activities was $13.6 million for the thirty-nine weeks ended October 30, 2004 compared with net cash provided by operating activities of $15.5 million for the thirty-nine weeks ended November 1, 2003.

        With respect to cash flows used in investing activities, capital expenditures were $5.5 million in the thirty-nine weeks ended October 30, 2004 compared with $5.0 million for the prior year period. Capital expenditures in the thirty-nine weeks ended October 30, 2004 were primarily related to the opening of forty-eight new stores, the refurbishing of existing stores and various corporate additions, including automobiles and warehouse equipment.

        Net cash used in financing activities was $5.6 million in the thirty-nine weeks ended October 30, 2004 compared with net cash provided by financing activities of $3.4 million in the prior year period. The cash fluctuation as compared to the same period last fiscal year was primarily the result of the repurchase of the Company’s common stock. Financing activities are related to proceeds from stock options exercised.

        We estimate capital expenditures in fiscal 2005 will be between $7.5 million and $8.5 million, which relate to the opening of 58 to 62 Hibbett Sports stores (exclusive of store closings), remodeling of selected existing stores and improvements at our headquarters and distribution center.

        We maintain an unsecured revolving credit facility that allows borrowings up to $25.0 million and which will expire November 5, 2005, subject to renewal every two years. As of October 30, 2004 and November 1, 2003, we had no debt outstanding. Based on our current operating and store opening plans, we believe we can adequately fund our cash needs for the foreseeable future through cash generated from operations, credit granted by our vendors and available borrowings under the revolving credit facility.

        Our revolving credit facility contains certain restrictive covenants common to such agreements. We were in compliance with respect to those covenants at October 30, 2004 and November 1, 2003.

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Recent Accounting Pronouncements

        In March 2004, the FASB issued Exposure Draft, “Share-Based Payment” addressing the accounting for stock-based compensation. A final standard is expected by the FASB in the near future. Proposed changes to the existing rules require companies to recognize compensation expense for stock option grants. When the new rules are enacted, we expect our results of operations to be adversely affected; however, our cash flow and the underlying economics of our financial condition are not expected to be materially affected. We will continue to monitor the development of the new standard and review our stock-based compensation plans accordingly.

Quarterly Fluctuations

        We have historically experienced and expect to continue to experience seasonal fluctuations in our net sales and operating income. Our net sales and operating income are typically higher in the fourth quarter due to sales increases during the holiday selling season. However, the seasonal fluctuations are reduced to some extent by the strong product demand in the spring, summer and back-to-school sales periods. Our quarterly results of operations may also fluctuate significantly as a result of a variety of factors, including the timing of new store openings, the amount and timing of net sales contributed by new stores, the level of pre-opening expenses associated with new stores, the relative proportion of new stores to mature stores, merchandise mix, the relative proportion of stores represented by each of our three store concepts and demand for apparel and accessories driven by local interest in sporting events.

A Warning About 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”, “target” or “estimate”. For example, our forward-looking statements include statements regarding:

        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.

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        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” in our Form 10-K dated April 15, 2004:

        Our forward-looking statements could be wrong in light of these and other 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        Our financial condition, results of operations and cash flows are subject to market risk from interest rate fluctuations on our revolving credit facility and working capital facility, each of which bears interest at rates that vary with LIBOR, prime or quoted cost of funds rates. At the end of the thirty-nine weeks ended October 30, 2004, we had no borrowings outstanding under these agreements. We did not have any borrowings under the credit facility during the thirteen weeks ended October 30, 2004. There were two days during the thirty-nine weeks ended October 30, 2004, where we incurred borrowings against our credit facility for an average borrowing of $306,000. During the thirteen weeks and the thirty-nine weeks ended October 30, 2004 the maximum amount outstanding was $392,000. The total amount of interest paid during the thirty-nine weeks ended October 30, 2004 was less than $500. A 10% increase or decrease in market interest rates would not have a material impact on our financial condition, results of operations or cash flows.

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ITEM 4. CONTROLS AND PROCEDURES

        We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

        Pursuant to Securities Exchange Act Rule 13a-15, we carried out an evaluation as of October 30, 2004, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that as of October 30, 2004, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

        During the thirty-nine weeks ended October 30, 2004, there have been no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

        In accordance with Section 404 of the Sarbanes-Oxley Act of 2002, we are evaluating our internal controls and are in the process of making changes to improve the effectiveness of our internal control structure.

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PART II. OTHER INFORMATION

ITEM 1: Legal Proceedings

        We are party to various legal proceedings incidental to our business. In our opinion, after consultation with legal counsel responsible for these matters, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect the financial position, results of operations or cash flows of our Company.

ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds

        The following table presents our share repurchase activity for the thirteen weeks ended October 30, 2004:

ISSUER PURCHASES OF EQUITY SECURITIES (1)

ITEM 3: Defaults Upon Senior Securities

      None

ITEM 4: Submission of Matters to Vote of Security-Holders

      None

ITEM 5: Other Information

      None

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ITEM 6: Exhibits

Exhibit No.

10.1 Director Compensation

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1 Section 1350 Certification of Chief Executive Officer
32.2 Section 1350 Certification of Chief Financial Officer

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized.

HIBBETT SPORTING GOODS, INC.

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Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

        I, Gary A. Smith, certify that:

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Exhibit 32.1

Section 1350 Certification of Chief Executive Officer

        Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Hibbett Sporting Goods, Inc. (the “Company”) hereby certifies, to the best of such officer’s knowledge, that:

    (i)        the accompanying Quarterly Report on Form 10-Q of the Company for the period ended October 30, 2004 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

    (ii)        the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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Exhibit 32.2

Section 1350 Certification of Chief Financial Officer

        Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Hibbett Sporting Goods, Inc. (the “Company”) hereby certifies, to the best of such officer’s knowledge, that:

    (i)        the accompanying Quarterly Report on Form 10-Q of the Company for the period ended October 30, 2004 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

    (ii)        the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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