Hibbett Sports reported a slight decline in its second-quarter sales on Wednesday, as comparable same-store sales fell short of estimates.
The athletic retailer posted a 0.5% decrease in total revenues, which fell to $335.2 million for the quarter ended July 30, 2023, from $336.8 million in the prior-year period.
For the first half of 2023, the Birmingham, Alabama-based company saw its sales edge up 0.2% year over year, to $683.5 million, from $682.1 million.
Comparable sales, a key retail metric tracking sales at stores open for at least a year, were down 2.5% during the quarter. Analysts had predicted a decline of 1.9%, according to Refinitiv data.
Hibbett cited “softer than expected demand” for the decrease, which it said was partially offset by growth in its e-commerce business. Comparable sales at its physical stores were down 3.4% during the quarter.
The company reported a 3.6% rise in net income to $41.5 million, or $2.08 per diluted share, for the quarter, compared with $39.9 million, or $1.97 per diluted share, in the same quarter in 2022.
“Our second-quarter results reflect the challenging macroeconomic environment and its impact on consumer spending,” said Hibbett CEO Mike Longo in a statement. “Despite these external headwinds, our team’s execution of our strategic initiatives drove sequential improvement in profitability.
“Our disciplined approach to expense management and continued focus on driving sales productivity allowed us to deliver positive diluted earnings per share growth for the second quarter.”
Hibbett said its gross margin fell 20 basis points to 33.5% for the quarter, attributed in part to increased markdowns and promotional activity. Notably, the company said it increased its inventory allocation to higher-margin categories like footwear and team sports for the fall season.
Looking ahead, Hibbett maintained its preliminary financial outlook for the full year, assuming comparable sales are down at a low-single-digit rate.
The company anticipates diluted net income per share to be in the range of $7.25 to $7.75, compared with $7.27 per share in fiscal 2022.
Analysts surveyed by Refinitiv currently project full-year diluted EPS to come in at $7.43.
Hibbett shares declined 1.5% to $45.61 in premarket trading on Wednesday.
In other retail earnings news, Foot Locker on Tuesday reported a surprise quarterly profit, helped by its efforts to streamline costs, and raised its full-year outlook. Shares of the New York-based athletic footwear and apparel retailer surged more than 20% in premarket trading on Wednesday..
