Sporting goods store Hibbett Sports (HIBB) is slated to release its third-quarter earnings on Tuesday before the bell. Analysts have taken a step back for the company’s performance in this quarter as the sporting goods business has been struggling at the retail end.
Analysts, on average, expect Hibbett Sports to report earnings of $0.16 per share on revenue of $217.28 million for the third quarter. In comparison, during the previous year quarter, the company reported a profit of $0.37 per share on revenue of $237.83 million. Majority of the analysts recommended a “hold” rating on the stock with an average price target of $20.40.
The company has been continuing its investment strategies for the long-term success of the business but the performance remained impacted by the costs associated with the implementation of these strategies. Also, softness continued to prevail in the company’s licensed, equipment, and accessories business.
However, Hibbett Sports is expected to see good momentum in the branded apparel and footwear. The company expects continued improvement in its assortments as the holiday season is near, and it expects further benefit from its omnichannel initiatives with the rollout of Buy Online, Pick up in Store and Reserve in Store.
For the second quarter, Hibbett opened six new stores, expanded, relocated or remodeled three stores and closed 15 underperforming stores, bringing the store base to 1,059 in 35 states as of August 4, 2018. The company is predicted to increase the store base in the third quarter.
Looking ahead into the full year 2019, the company had expected earnings in the range of $1.57 to $1.75 per share and comparable sales in the range of down 1% to up 1%. SG&A expense was estimated to increase by 7% to 9% and capital expenditures were anticipated to be about $18 million to $22 million.
The brokerage firm Susquehanna believes that the weak brick & mortar store performance is likely to increase digital distribution costs and occupancy costs. This is likely to hurt the bottom line performance. The company needed to focus on traffic-driven store presentations and digital efforts for the improvement in the quarterly numbers.
Shares of Hibbett Sports ended Wednesday’s regular session up 2.14% at $17.21 on the Nasdaq. The stock has fallen over 17% in the year so far and over 9% in the past year.
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