Preliminary earnings weren’t as good as hoped and may be a bad sign for sporting goods retailers going forward.
Source: Why Shares of Hibbett Sports, Inc. Plunged 14% Today
The source link gives a short overview of what happened to send $HIBB tumbling. Of course the scenario is the anti Foot Locker story.
Last year I wrote that Hibbett Sports could become the next TSA. Now, I was being a bit dramatic as the chain (larger than Finish Line with 1000 stores) has some advantages, but this is what I wrote:
Why Hibbett Sports, Inc. could be the next Sports Authority (NASDAQ:HIBB)
When I wrote this article last year $HIBB sat at 40/share. Today 2/27/2017 they are sitting at 30.15/share. This is what I wrote in that article last November,
“I think when the market opens on Monday, although we are entering a traditionally strong sales period, Hibbett Sports will drop to the mid 30s. This will trigger a sell off and the expansion will turn into the catalyst for store closures and potentially turn Hibbett Sports into TSA part 2.”
I need to clarify what I meant by “expansion”. Hibbett Sports has been considering moving westward. They just opened their first store in California. In the article I wrote last year I explained that the logistics would prove to be a nightmare for the southern based company, and that instead of focusing on expanding the company westward capital would be better allocated in redesigning the stores and improving their e-commerce, customer experience and merchandising.
I said that the expansion would increases expenses, decreasing margins and drive the share price down once reports became available. I said mid 30s… It was worse than that as the shares now sit at 30.15 and when you enter any Hibbett Sports they still have the same very evident problems with merchandising and they have yet to figure out their e-commerce strategy.
Instead of repairing their customer loyalty program in house they hired a team from Baesman Insights:
While this is commendable, a repairing of customer loyalty programs is not the primary issue. What is the issue? I gave a list in last years article and I’m updating it here.
- Loss Prevention – I don’t have any data on how much merchandise is stolen/lost at Hibbett Sports. What I’m doing is based on an eyeball check. With over 6 Hibbett locations in Memphis, and about another 15 within a two hour radius every store has some of the nicest managers you will ever meet, but the managers are at a disadvantage. The layout of every store leaves one of the WORST sitelines from register to the entrance. There is no, I mean zero, funneling towards a particular product and often important product is blocked by support columns, tables of Sale merchandise, and random placement of clothing. This poor arrangement has to become evident during audits as I’m sure there are high losses in merchandise.
- e-commerce – When the brands you carry are generating amazing content and making it available via the web in multiple locations including their websites because they understand the importance of connecting with this generation’s’ consumer is based on more than just product, shouldn’t you be taking notice? Hibbetts has not. Instead of expanding West, they could have taken that money, built a content creation and social media team, redesigned their horrible website and instantly reaped the benefits of engagement with their prospective audience.
Hibbett Sports probably would never sit down and call me, but maybe someone should take some time and go through this site and read every article that has the words FOOT LOCKER and CONTENT CREATION in them and maybe this will help the company to slow down, and go backwards to move forward. Fix the internal issues and Hibbett Sports has the one thing that other struggling retailers don’t have, they own their markets in most of the locations in the south, for at least another year… because while Hibbett Sports was playing with expanding West, Jimmy Jazz expanded south and there isn’t a single analyst on Wall Street or anywhere who has paid attention to that.
sportszone is having the same problem; they have yet to make their jordan retros and foamposites available online. And they also do not understand content creation. the worse part is their store layout. It leaves nothing to be desired in the store