UPDATE 1-Hibbett Sports Q2 margins drop, shares fall

(Recasts; adds details, share movement)

Aug 21 (Reuters) - Sporting-goods retailer Hibbett Sports Inc (HIBB.O: Quote, Profile, Research, Stock Buzz) posted quarterly revenue well ahead of market expectations as it sold more performance shoes and apparel, but profits failed to keep pace due to slightly lower margins.

Shares of the company were down nearly 9 percent at $20.50 in trading after the bell. They closed at $22.42 Thursday on Nasdaq.

The company, which operates sporting goods stores in small- to mid-sized markets, earned $4.8 million, or 17 cents a share, for the second quarter ended Aug. 2, compared with $4.7 million, or 15 cents a share, a year earlier.

The company, which competes with Brown Shoe Co Inc (BWS.N: Quote, Profile, Research, Stock Buzz) and larger rivals like Foot Locker Inc (FL.N: Quote, Profile, Research, Stock Buzz) and Dick's Sporting Goods Inc (DKS.N: Quote, Profile, Research, Stock Buzz), said net sales rose 14 percent to $130.3 million.

Analysts on average expected a profit of 15 cents a share, before exceptional items, on revenue of $124.7 million, according to Reuters Estimates.

Operating margin fell to 5.99 percent from 6.82 percent, a year ago.

The company, which sells brands like Nike, Adidas, Under Armour, Fossil, K-Swiss, Reebok and Puma, said sales at stores open at least a year increased 5 percent in the quarter.

For the fiscal year ended Jan. 31, 2009, the company raised its earnings outlook. It now expects a profit of 93 cents to $1.03 a share for the year, compared with its earlier forecast of 88 cents to $1 a share.

The Birmingham, Alabama-based company, which plans to open 80 to 90 stores in fiscal 2009, expects same-store sales to range from flat to an increase of 2 percent for the second half of the year. It currently operates 712 stores in 23 states. (Reporting by Dilipp S. Nag in Bangalore; Editing by Amitha Rajan)