Hibbett Sports lowers guidance
Sporting goods retailer Hibbett Sports, Inc. (Nasdaq: HIBB) downwardly revised its earnings guidance for the fourth quarter and said it expects to report a decrease in comparable-store sales, sending shares barreling downward this morning.
The Birmingham, Ala.-based small cap attributed its revised guidance to decreased traffic due to the lack of a “hot trend” or product technology, as well as a weak economic environment.
Hibbett said it now expects to report earnings per share in the range of $0.20 to $0.26, down from the company’s previous earnings guidance range of $0.36 to $0.44 per share. For the fourth quarter last year, the company recorded earnings of $0.39 per share.
The sporting goods retailer also warned that it expects to report a mid-single-digit comparable-store sales decrease on a fiscal basis and on a comparable-store, comparable-week basis. This compares with previous expectations for a low-single-digit comparable-store sales increase on a calendar basis and a mid-single-digit increase in comparable-store sales on a fiscal basis.
“Although management, during its third-quarter 2008 conference call, advised that it did not intend to be more promotional than it had been in the year ago period, we believe the company was likely pressured into increasing the level of promotional activity during the just-concluded holiday season in order to entice a very selective and price-sensitive shopper to visit its stores,” Susquehanna Financial analyst John Shanley wrote in a research note today.
Given management’s revised guidance and the company’s weaker-than-expected fourth quarter comparable store results, Shanley is reducing his fourth-quarter 2008 earnings estimate to $0.24 from $0.43, representing a 38.8% earnings decline year-over-year.
The analyst also lowered his fiscal-year earnings estimate to $0.95 from $1.14, and his fiscal 2009 earnings estimate to $1.10 from $1.39 to reflect a more cautious outlook surrounding a difficult athletic retail environment.
“We believe deteriorating macroeconomic conditions should likely continue to restrain consumer spending on discretionary purchases such as many athletic products during the first half of 2009,” wrote Shanley.
The consensus of 19 analysts surveyed by Thomson Financial is for fourth-quarter earnings of $0.40 per share, fiscal 2008 earnings of $1.12 per share and fiscal 2009 earnings of $1.33 per share.
Hibbet will report complete results for the fourth quarter as well as its initial outlook for fiscal 2009 on March 13, 2008.
Shares of Hibbett Sports (HIBB) careened 21.12%, or $3.37, to $12.59 at 11:09 a.m. ET. Shares of Hibbett Sports have been trading in the range of $12.30 to $33.95 for the past 52 weeks.
