Department store chain Hibbett Sports reported a sales miss in the second quarter on Wednesday, amid continued tough trading conditions in the sector, sending its shares down more than 10% before the opening bell.
Net sales for the three months ended July 30 rose 4.1% to $404.7 million, missing market expectations of $412.1 million, according to Refinitiv data.
Same-store sales in the quarter dropped 2.3%, marking the sixth consecutive quarter of decline in this key metric.
The company’s gross margin contracted by 110 basis points to 30.9%, reflecting higher promotional activity and increased markdowns.
Net income plunged 74.7% to $9.2 million, or 54 cents per share, well below the $2.11 per share expected by analysts.
“Our results for the second quarter reflect the challenges facing the broader retail landscape,” said Jeff Rosenthal, Hibbett’s president and CEO, in a statement.
“While we are disappointed with our comparable sales performance, we believe that our strategic initiatives to enhance our omni-channel capabilities and expand our product assortment will position us for long-term success.”
Hibbett ended the quarter with 1,051 stores in 35 states, including 968 Hibbett Sports stores, 66 City Gear stores and 17 Sports Additions stores.
For the first half of the year, net sales climbed 4.7% to $834.4 million, while same-store sales fell 2.1%.
The Alabama-based retailer reaffirmed its full-year outlook, expecting net sales to be in the range of $1.72 billion to $1.77 billion and comparable sales to be down low-single digits.
“We remain confident in our long-term growth prospects and believe that our team is well-positioned to execute on our strategic initiatives and drive future profitability,” said Rosenthal.
Shares in Hibbett Sports were down 10.4% in premarket trading on Wednesday.
The company is scheduled to host a conference call at 9 a.m. ET to discuss its financial results..
