Sports re­tailer stocks fall as Hib­bett posts gloomy out­look

The Guardian (Charlottetown) - - BUSINESS -

More bad news for sport­ing goods re­tail­ers: Hib­bett, a chain with more than 1,000 stores, said it ex­pects a key sales fig­ure to fall due to a “chal­leng­ing” re­tail en­vi­ron­ment.

Hib­bett’s stock plum­meted 30 per cent Monday morn­ing to an eight-year low af­ter the an­nounce­ment. Shares of its com­peti­tors, such as Foot Locker and Dick’s Sport­ing Goods, also fell.

Many tra­di­tional re­tail­ers have been hurt as more peo­ple chose to shop on­line, in­clud­ing those that sell sneakers, ath­letic cloth­ing and other gear. Sports Au­thor­ity went out of busi­ness last year, clos­ing all its 460 stores af­ter fil­ing for bankruptcy pro­tec­tion. And one ma­jor sneaker maker, Nike Inc., an­nounced last month that it is look­ing to side­step tra­di­tional stores and sell more of its goods di­rectly to cus­tomers on­line.

Hib­bett has to­tally missed out on the move to on­line shop­ping. The com­pany, which was founded more than 70 years ago, didn’t launch an e-com­merce web­site un­til Monday. It was es­pe­cially hurt in De­cem­ber when other re­tail­ers were of­fer­ing hol­i­day-re­lated on­line dis­counts dur­ing what is known as “cy­ber week.” The com­pany saw a “dra­matic drop” in rev­enue dur­ing the month and fewer peo­ple vis­ited its stores, CEO Jeff Rosen­thal said in a March con­fer­ence call.

An­a­lysts at Stifel said they were glad Hib­bett was fi­nally sell­ing goods on­line for of the back-to-school shop­ping sea­son. “We ex­pect e-com­merce will be an im­me­di­ate ben­e­fit to rev­enue,” the an­a­lysts said in a note Monday.

But Hib­bett, based in Birm­ing­ham, Alabama, said Monday that it ex­pects sales to fall 10 per cent at its es­tab­lished stores dur­ing the May-to-July pe­riod. That’s far worse than the 1.9 per cent drop that Wall Street an­a­lysts had ex­pected, ac­cord­ing to Fac­tSet. Hib­bett also said it ex­pects to re­port a sec­ond-quar­ter loss be­tween 19 cents per share and 22 cents per share. An­a­lysts ex­pected the com­pany to post earn­ings of 15 cents per share for the quar­ter.

Shares of Hib­bett Sports Inc. fell $5.88 to $13.82 in morn­ing trad­ing Monday. Foot Locker Inc. shares fell 4.5 per cent, Dick’s Sport­ing Goods Inc. fell 3 per cent and The Fin­ish Line Inc. dropped 5.6 per cent.

AP PHOTO/DAVE MARTIN

In this June 25, 2008, file photo, Reece Ar­mis­tead, an as­sis­tant man­ager at Hib­bett Sports in Thomasville, Ala., sorts cloth­ing at the store. Hib­bett, a chain with more than 1,000 stores, said it ex­pects a key sales fig­ure to fall due to a “chal­leng­ing” re­tail en­vi­ron­ment.

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