Hibbett Sports Inc. announced Wednesday that, as expected, it received a standard notification letter dated June 19, 2019, from Nasdaq. The letter states that, as a result of not having timely filed its quarterly report on Form 10-Q for the period ended May 4, 2019, the company no longer complies with Nasdaq Listing Rule 5250(c)(1), which requires timely filing of periodic financial reports with the Securities and Exchange Commission.
This notice has no immediate effect on the listing of the company’s common stock on the Nasdaq Global Select Market. Although Nasdaq’s listing rules provide the company with 60 calendar days from the date of the notice to submit a plan to regain compliance, the company expects to file its Form 10-Q within the 60-calendar day period.
In February 2016, the Financial Accounting Standards Board established ASU No. 2016-02 Leases (Topic 842), which was subsequently amended, and which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements.
The company adopted the new standard on February 3, 2019, and the Form 10-Q is the first quarterly filing being made by the company since adoption of Topic 842. Adoption of the new lease standard will establish the initial opening balance sheet entries relative to the right-of-use assets and corresponding liabilities, and the company is still finalizing the entries relative to a limited subset of the store lease portfolio. The delay in preparing and filing the Form 10-Q is exclusively due to the implementation of this new standard.