Retailer Hibbett Sports saw a major net income drop in the third quarter, yet came in ahead of Wall Street’s earnings per share (EPS) expectations and updated its outlook for fiscal year 2018.
Net income was $7.6 million, down a whopping 48 percent, according to Nasdaq, compared to a net income of $14.6 million during the same period last year.
Third quarter EPS was $0.37 per diluted share, compared with earnings per diluted share of $0.66 last year, though above Reuters’ prediction of an EPS of $0.22.
However, net sales for the third quarter increased marginally to 0.4% to $237.8 million, compared to $237.0 million during the same period last year. Comparable store sales fell 1.3%. President and CEO of the company, Jeff Rosenthal, attributes the retailer’s e-commerce site, which went live earlier this year, and strong marketing initiatives as a reason for positive sales results.
“Our e-commerce sales exceeded even our high expectations, as we experienced good response from early marketing initiatives and strong conversion from online traffic,” said Rosenthal.
Gross margin was 32 percent, compared to 35.4% during the same period in 2016. Hibbett attributes the decrease to promotions and markdowns in order to improve store inventory—causing inventory turns to majorly improve compared to the same time last year.
The company repurchased 1.2 million shares of common stock for around $15.9 million, with around $213.4 million of the total authorization remaining for future stock repurchase, according to the retailer.
“We were very pleased with the results for the quarter. Sales in equipment and accessories remained soft, but were offset by positive comparable store sales in footwear and significant improvement in branded apparel,” said Rosenthal. “We are confident that our initiatives surrounding e-commerce, improved assortments, and ongoing store rationalization are working, and we are well positioned now to compete effectively in a difficult retail environment.”
Hibbett Sports updated its outlook for FY2018, anticipating an EPS around $1.42 to $1.50, up from its previous guidance of $1.25 to $1.35. Comparable store sales are expected to be in the negative mid-single-digit range, which is better than the previously anticipated guidance in the negative mid to high single-digit range.