Hibbett Sports Inc. lowered its earnings forecast for fiscal 2015 by roughly 5 percent Thursday based on preliminary estimates of results for the 13-week period ended Aug. 2.
The retaile said it expects net sales for the period to increase 4.2% to $194.0 million compared with $186.2 million for the 13-week period ended Aug. 3, 2013. Comparable store sales are expected to increase 0.1% for the second quarter.
Gross profit is expected to reach 33.4% of net sales, compared with 34.3% for the 13-week period ended August 3, 2013. This decline primarily results from increased markdowns related to reducing slow selling and aged inventory. Management expects that gross profit will continue to be impacted by increased markdowns in the near term, but this impact should moderate as fiscal year-end approaches. Gross profit is also expected to be impacted by store occupancy and logistics costs, as these expenses are expected to increase as a percentage of net sales due to lower than anticipated comparable store sales.
Store operating, selling and administrative expenses were in line with internal expectations, but are expected to be higher as a percentage of net sales due to lower than anticipated comparable store sales.
Based on second quarter trends for comparable store sales and gross profit, earnings per diluted share for the 13-week period ended Aug. 2 are expected to be in the range of $0.30 to $0.32, compared with $0.40 reported for the year ago quarter. Hibbett Sports plans to report full second quarter results on August 22, 2014.
“A more cautious consumer led to weaker than anticipated traffic in the second quarter,” said Jeff Rosenthal, President and Chief Executive Officer, “Although we were disappointed with our overall comparable store sales, there was a slight improvement in July as we moved into the back to school season. As a result, we anticipate a healthier back to school shopping period. We continue to be very pleased with new store openings and new store productivity, and feel confident that new stores will continue to add meaningful revenue growth.”
The company anticipates that earnings per diluted share will be in the range of $2.63 to $2.73 for the 52 weeks ending Jan. 31, 2015, with comparable store sales increasing in the low single-digit range for the year. This compares to previous guidance of earnings per diluted share in the range of $2.78 to $2.98, and comparable store sales increasing in the low-to-mid single-digit range. The Company will provide more information and updates when it reports full second quarter results.
Hibbett Sports, Inc. operates sporting goods stores in small to mid-sized markets, predominately in the South, Southwest, Mid-Atlantic and Midwest regions of the United States. The company’s primary store format is Hibbett Sports, a 5,000-square-foot store located in strip centers and enclosed malls.