Bank of America analysts double-downgraded Hibbett Sports (NASDAQ:HIBB) to Underperform from Buy after the sporting-goods retailer cut its full-year forecast last week.
The company now expects to report a full-year profit of $7-7.75, down from the prior $9.5-10 forecast. Comparable sales are seen falling low-single digits.
“Notwithstanding our more cautious near-term consumer outlook, we believe Hibbett remains well positioned for the long-term to continue to grow and increase market share,” the company said in a note.
For the first quarter, Hibbett reported a profit per share of $2.74 on revenue of $455.5 million. Analysts were looking for earnings of $3.18 per share on sales of $472.5M.
Analysts said the results indicate “a significant slowdown”. They cut the price target to $35 per share from the prior $85.
“We believe HIBB has seen no slowdown in launch and “scarce” product such as Retro Jordan’s and Air Force 1’s and HIBB’s relationship with Nike remains strong as penetration continues to increase. HIBB should also benefit from reduced allocations to competitors incl. FL. However, we believe this is being fully offset by very little demand for secondary franchises & brands which are requiring heavy markdowns,” analysts wrote in a note.
Hibbett shares fell 11.2% on Friday but are up 2% in pre-market Tuesday.