Hibbett sales drop $19M
Shares in Hibbett Sports plummeted last week when the struggling retailer reported Q2 net sales fell 9.2% to $188.0 million, down from $206.9 million in the year-ago period. Same-store sales in the quarter fell 11.7%, and e-commerce sales from its newly launched website didn't affect sales in Q2, executives said, according to a conference call transcript from Seeking Alpha.
Gross margin was 28.9% of net sales in the period, down from 33% in the year-ago quarter, mainly due to promotions and markdowns taken to liquidate excess and aged inventory, as well as higher logistics and store occupancy expenses, according to a company press release.
For the quarter, Hibbett opened six new stores, expanded four high-performing stores and closed eight underperforming stores, bringing its store base to 1,080 in 35 states as of July 29, the company said.
CEO Jeff Rosenthal said the sports retailer has benefited from tight expense control even as it has maintained “proper staffing and customer service level in our stores,” according to a transcript of the retailer’s conference call with analysts from Seeking Alpha.
Hibbett’s emphasis on stores has been at least some of the reason for its troubles. Consider that the company didn’t launch its e-commerce site until earlier this year.
Although the site didn't collect enough sales to have much of an impact in the quarter, Rosenthal expressed optimism. “Our early e-commerce sales have exceeded our expectation, and user feedback has been very positive,” he told analysts, adding that the company plans to "aggressively grow our online business."
Like apparel retail in general, sports gear and apparel sales have been a struggle for all players as competition expands. Nike's news in June that it will ramp up its direct-to-consumer sales by selling directly on Amazon is also a blow to retailers like department stores as well as specialty retailers like Hibbett's and its rivals Foot Locker, Finish Line and Dick’s Sporting Goods.
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