Adjusted earnings, excluding special items, dropped to $0.14 per share and came in below analysts’ forecast. Reported profit was $1.5 million or $0.08 per share, down from $7.56 million or $0.37 per share in the third quarter of 2018. The bottom-line was negatively impacted by higher operating costs related to the e-commerce initiatives and acquisition of City Gear.
Net sales of the Birmingham, Alabama-based sporting goods retailer declined 9% annually to $216.9 million during the three-month period, slightly missing the estimates. There was widespread softness in the licensed, equipment and accessories business, which was partially offset by stable demand for branded apparels. Comparable store sales were broadly flat during the quarter. E-commerce accounted for 8.8% of total sales, up 62% compared to the year-ago quarter.
“Our e-commerce business continues to exceed expectations, and we expect continued traction as we benefit from enhancements to our mobile app and our new Buy Online, Pick up in Store and Reserve Online capabilities,” said CEO Jeff Rosenthal.
Hibbett repurchased 395,450 shares for around $7.6 million in the October quarter. The company operated 1,042 stores when the quarter ended, after opening seven new outlets and closing 24 underperforming stores.
Meanwhile, the management lowered its adjusted earnings per share guidance for fiscal 2019 to the range of $1.55 to $1.65 from the previous outlook of $1.57-$1.75, reflecting acquisition-related costs. The softness in the footwear segment is expected to improve in the fourth quarter, aided by a pick up in the sales of premium products.
Full-year unadjusted earnings are currently forecast between $1.35 per share and $1.48 per share. Comparable sales are expected to be flat to +1%, which represents an improvement from the earlier prediction of -1% to +1%.
Hibbett Sports’ shares lost about 10% in premarket trading Tuesday following the earnings report, continuing the downtrend that began a few months ago. The stock declined about 17% since the beginning of the year.
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