Hibbett Sports today released preliminary fourth-quarter results that topped market watcher’s forecasts.
While the firm’s stock reacted positively to the news — gaining more than 2 percent in premarket trading — it reversed those gains after market open and had fallen nearly 4 percent to $24.25 as of 11 a.m. ET.
The company said an early read of its performance during the period showed net sales gaining 8 percent to $266.7 million, besting estimates for sales of $260.7 million. Comparable store sales increased 1.6 percent.
Based on preliminary fourth-quarter results, earnings per diluted share for the period are expected to be in the range of 47 cents to 51 cents, a decline when compared with diluted EPS of 54 cents in last year’s comparable period but significantly higher than analysts’ bets for diluted EPS of 31 cents.
Hibbet president and CEO Jeff Rosenthal said the better-than-expected sales were driven by strength in branded apparel and footwear, and continued gains in the e-commerce business, which represented 7.6 percent of total sales during the quarter.
Still, the quarter was not without challenges stemming from the need to offload inventory and feed consumer thirst for bargains.
“As expected, the holiday season was very promotional, and we continued to take markdowns to reduce aged inventory,” Rosenthal said. “This resulted in continued gross margin pressure for the quarter but allowed us to finish the year in a much better inventory position.”
Looking ahead, for fiscal 2019, the company expects to reallocate around $3 million to $4 million of the new tax savings (stemming from federal tax reform) into SG&A spending, which includes benefits to employees and ongoing investments in omnichannel. Due to the sale of its Team Division in fiscal 2018, Hibbett said its revenue will be negatively impacted by $7.6 million in the year ahead.