Stocks of sporting goods retailers performed sluggishly yesterday, following Hibbett Sports Inc. (HIBB - Free Report) announcement that its comparable store sales (comps) for second-quarter fiscal 2018 may fall as much as 10% due to extremely challenging sales trends. Further, the company indicated that the decline in sales and pressured margins in the quarter, would lead to a loss of 19–22 cents per share.
Following the news, shares of Hibbett plunged more than 33%, hitting the 52-week low mark. Moreover, its industry counterparts were also punished with DICK’S Sporting Goods Inc. (DKS - Free Report) and Foot Locker Inc. (FL - Free Report) falling 5.5% and 4.6%, respectively. In fact, Hibbett’s shares have declined as much as 50.3% in the past three months, wider than the industry’s drop of 12.4%. This can primarily be attributed to the company’s dismal sales surprise history, wherein it has lagged estimates in eight out of the trailing nine quarters.
Additionally, the news also hurt athletic equipment and apparel manufacturers including the likes of Nike Inc. (NKE - Free Report) , Adidas AG and Under Armour Inc. (UAA - Free Report) . While Nike and Under Armour declined 1.7% and 1.8%, respectively, following the news, Adidas dipped only 0.4%.
The news of a tepid second-quarter overshadowed the company’s announcement of launching its eCommerce site, which analysts believe was bit too late. However, the company issued a statement in its defense that it waited to put the necessary infrastructure in place including new distribution center and omni-channel capabilities to provide a seamless customer experience.
Hibbett’s eCommerce site will not only provide customers with user-friendly experience but will also offer wide variety of footwear, apparel as well as equipment items to select from. We believe that in an era of challenging retail landscape, this Zacks Rank #2 (Buy) company’s focus on omni-channel initiatives will help achieve its long-term goal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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