Department store chain Hibbett saw overall sales decline in the second quarter as comps dropped. However, the retailer’s first half improved on an annual basis.
Net sales for the second quarter ended July 30 decreased 1% to $361.4 million, below analysts’ estimates of $364.9 million, according to Zacks Investment Research. Comparable store sales fell by 3.3% during the quarter, with the company stating that the drop was mainly driven by a decline in athletic footwear sales.
Gross profit fell by 9.2% to $113.5 million, with margins contracting by 290 basis points to 31.4%. The retailer cited costs associated with markdowns, elevated freight expenses, and increased shrink as reasons for the decline.
Net income dropped by 42.2% to $28.5 million, or $2.16 per diluted share, compared to $49.3 million, or $3.77 per diluted share for Q2 2022. This also fell below the Zacks consensus estimate of $2.26 per share.
For the first half of 2023, Hibbett’s net sales improved by 3.7% to $746.4 million, compared to $719.6 million during the same period in the previous year. Comparable store sales rose by 0.8% for the half.
First-half gross profit reached $237.1 million, up from $226.8 million, while net income fell by 20.3% to $67.4 million, or $5.18 per diluted share, from $84.6 million, or $6.53 per diluted share a year ago.
Following the release of the results, Hibbett’s stock price fell by around 8% in pre-market trading.
In a statement, Hibbett President and CEO Mike Longo said, .
