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Hibbett Sports, Inc.

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Hibbett topped the industry year to date as it remains well positioned to gain from the growth of omni-channel capabilities, renewed loyalty program and inventory management initiatives. However, both earnings and sales missed estimates in first-quarter fiscal 2019 while the top line also declined year over year. Earnings were hurt by soft margins and higher SG&A expenses, whereas sales dropped due to soft comps. Notably, the company has been witnessing soft margins trend for the past few quarters, which continued in the first quarter. Higher sales of clearance merchandise and freight on e-commerce sales hurt gross margin, while higher SG&A expenses took a toll on operating margin. Though the company expects easier gross margin comparisons in the second quarter due to the week shift caused by the 53rd week last year, the shift is likely to impact gross margins in the third quarter. Nevertheless, estimates have been stable lately.


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