What To Expect When Hibbett Sports Reports Q3

Footwear sales proved to be the bright sport for Birmingham, Ala.-based sporting goods retailer Hibbett Sports Inc. when it reported a mixed second quarter on Aug. 21.

But the retail environment has changed — for the worst, it seems — as evidenced by the slew of lackluster footwear-and-apparel earnings reports for the third quarter.

Hibbett’s major competitor, Dick’s Sporting Goods Inc., is also among the brands and retailers that missed Wall Street’s estimates this quarter. The company reported 0.4 percent comp growth and declining profit in its earnings release Tuesday. As has been the case for much of Q3, weather led Dick’s to end the quarter with inventory growth (up 13 percent) outpacing sales (up 8 percent).

Could Hibbett fall victim to similar perils as others in the strained retail space?

Sterne Agee CRT analyst Sam Poser suggests the retailer’s lack of an e-commerce presence could create the biggest drag.

“We believe in the small market concept, but without an e-commerce platform, Hibbett will still cede business to its competitors,” Poser wrote. “It appears as if Hibbett will not have an e-commerce platform in place until late 2017 (FY18), at which time, whatever system they have will likely be antiquated, relative to the competition.”

The positives, Poser noted, are that Hibbett does not have any exposure to the “weak” hunting category and has minimal exposure to cold weather goods.

Unseasonably warm weather has created a significant negative impact on earnings for companies in the sporting goods and footwear-and-apparel space.

In Q2, Hibbett’s sales advanced 2.8 percent to $199.3 million while earnings slid 16.7 percent to $7 million.

In Q3, analysts are predicting Hibbett will post earnings per share of 68 cents and revenues of $233.35 million when it reports Q3 Friday.

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