Hibbett's stock falls after earnings and guidance fall short of expectations in 'dynamic and challenging' environment

By Ciara Linnane

Hibbett's stock fell almost 9% early Friday after the company, which is working with Nike, missed earnings expectations in its latest quarter and offered soft guidance for the current year.

The weak report comes a day after blowout earnings from bigger rival Dick's Sporting Goods.

Read now: Dick's Sporting Goods shares soar to record high after earnings crush estimates and company offers upbeat guidance

The Birmingham, Ala.-based company (HIBB) had net income of $30.9 million, or $2.55 a share, for the quarter to Feb. 3, down from $38.4 million, or $2.91 a share, in the year-earlier period. The FactSet consensus was for EPS of $2.56.

Sales rose 1.8% to $488.6 million, also below the $477.0 million FactSet consensus. Same-store sales fell 6.4%, while FactSet was expecting a decline of just 2.0%.

Chief Executive Mike Longo said it was a "dynamic and challenging" environment in the period, but the company benefited from new product launches and favorable customer response to footwear brands, as well as its cooperation agreement with Nike (NKE) via its Hibbett Rewards X Nike Membership program.

Bricks-and-mortar same-store sales fell 9%, while e-commerce same-store sales rose 7%.

Gross margin fell about 70 basis points to 34.5% of new sales for the period, compared with 35.2% a year ago.

The company opened 11 net new stories in the period to end the year with 1,169 locations.

The company will continue to invest in its store footprint, consumer-facing technologies and back-office infrastructure in fiscal 2025.

It expects sales to be flat to up 2% and for same-store sales to be flat to down by a low-single-digit amount. Fiscal 2025 EPS is expected to range from $8.00 to $8.75.

The FactSet consensus is for EPS of $8.82, for sales to rise 4.2% and for same-store sales to rise 1.5%.

The company is expecting a less promotional environment in fiscal 2025 and small improvements in freight and logistics costs to be partially offset by headwinds in store occupancy. Gross margin is expected to range from 34.2% to 34.5% of net sales.

Benchmark analysts, who have a buy rating on Hibbett's stock, said sales missed their forecast by about $6 million, while profit was in line.

The stock has gained 17% in the last 12 months, while the S&P 500 has gained 32%.

-Ciara Linnane

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03-15-24 1008ET

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