Hibbett Sports on Monday warned that second quarter same-store sales are expected to fall some 10%, along with significant pressure on gross margins that the company said will mean a loss of 19–22 cents per diluted share, according to a company press release.
The athletic specialty retailer hopes to reverse those fortunes with the launch Monday of its first e-commerce website, a move that analysts have criticized as extremely late to the game, according to multiple media reports. The website includes visibility of in-store inventory, the ability to fulfill online orders or returns at stores, and full integration of its newly enhanced Hibbett Rewards program, the company said.
The warning took its toll on the company’s stock, which plunged nearly 30% on the news and took shares of rivals Foot Locker, Nike, Under Armour and Dick's Sporting Goods part-way down with it.
It's hard not to pin at least some of Hibbett's troubles on its late e-commerce entry, and the company made it pretty easy for analysts to do so by including its second-quarter warning and the news of its website launch in the same press release Monday. Indeed, Quo Vadis Capital President John Zolidis said, in a note cited by MarketWatch, that "timing could not be more apropos.”
"Hibbett is just launching e-commerce now? Yes,” he also said in the note. “Hibbett punctuated just how woefully late it is to offering e-commerce by announcing the final launch of this capability in the same press release today with the terrible news on sales and earnings.”
Still, the site is a "key strategic goal," Hibbett CEO Jeff Rosenthal said in a statement, insisting taking so long to launch digital sales would be an advantage. “Despite the difficult retail environment, the company remains focused on improving its business for the long term," he said. "Launching an e-commerce site has been a key strategic goal for Hibbett, and we took time to invest in our omnichannel infrastructure to do it the right way. Our main objective is to provide a seamless shopping experience for our customers with a platform that will allow us to significantly expand our assortment over time.”
Like apparel retail in general, sports gear and apparel sales have been a struggle for all players. Nike's news last month that it will ramp up its direct-to-consumer sales by selling directly on Amazon is also a blow to retailers like department stores and specialty retailers like Hibbett's, Foot Locker, Finish Line and Dick’s Sporting Goods, as well as to third-party Amazon Marketplace sellers offering either bona fide or counterfeit Nike goods.