Shares for Hibbett Sports Inc. are surging Tuesday morning following the company’s release of a blowout sales forecast.
The sporting goods retailer saw its stock rise more than 20% to $27.18 as of 10:00 a.m. ET. In after-hours trading yesterday, it announced predictions for second-quarter comps to increase in excess of 70% compared with the prior year period. While brick-and-mortar same-store sales are forecast to improve about 60%, it estimates those of its digital channels to spike roughly 200%. (The Q2 2020 period ends on Aug. 1.)
For the first half of the year, Hibbett expects total comps to climb approximately 20%, including a 7% gain in brick-and-mortar same-store sales and a 140% jump in digital.
“Our resilient business model and dedicated team members are delivering on our commitment of superior customer service with a compelling merchandise assortment,” president and CEO Mike Longo said in a statement.
According to the company, its sales have been positively impacted by several factors, including stimulus payments doled out by the federal government as well as pent-up consumer demand from deferred spending in March and April, when the COVID-19 health crisis took hold in the United States. It also attributed revenue growth to the temporary and permanent closures of competitors, as well as consumers’ accelerated adoption of e-commerce.
Nearly all of Hibbett’s stores have reopened to the public. (The chain has more than 1,100 units — about 20% of which are located in enclosed malls.) It added expectations for 25% of its physical store sales and 40% of digital to be comprised of new customers in Q2.
“These circumstances yielded increased traffic to our stores and website and the opportunity for new customers to experience our trademark service,” Longo added. “We expect that we will be able to retain many of these customers in the future.”
What’s more, Hibbett reported that it had repaid the $50 million it borrowed under its credit facilities in March as a precautionary measure to maintain liquidity and financial flexibility amid the coronavirus pandemic. (It did not use any of these funds.)
The company anticipates that it will incur additional expenses to provide employees and customers “with a safe environment to work and shop,” plus increase its compensation and incentive programs for retail store associates.
“We have a strong business model, talented team members and a resilient customer base,” Longo explained. “Our ability to react, adapt and execute successfully in a challenging business environment further reinforces the opportunities ahead of us.”