Hibbitt Sports stock rises after Q2 profit beat

Hibbitt Sports (HIBB) shares jump after seeing a Q2 profit beat and reiterating its full-year guidance. Yahoo Finance's Julie Hyman and Brad Smith break down the report and the outlook for the sporting goods retail company.

Video Transcript

JULIE HYMAN: Hibbett Sports' bright spot in the retail space today after reiterating its full year guidance despite other retailers, particularly sporting goods ones feeling pressure from rising levels of shoplifting and also maybe lower consumer demand.

The company's same store sales did fall 7.6% year over year, but profit did come in ahead of expectations and perhaps a bit of a relief rally here because Hibbett has been under pressure along with the rest of the sector over the course of the week.

The company also holding fast to its full year profit forecast, so that also could be helping matters here

BRAD SMITH: Yeah. This was an interesting report here because two of the things that jumped out to me on headline when you kind of first look through the release was that they had second quarter comp sales decreased by about 7.3%, and net sales were down 4.6% year over year.

When we were looking at this and knowing that they were going to be reporting earnings this morning, we said it could be a similar reaction that we see in what DICK'S had seen earlier this week. And DICK'S in that decline that had taken place. They still have not recovered from that after they had reported earnings here.

But you've got to wonder if investors are just kind of looking out into the future here, looking at some of the opportunity for Hibbett in what they put into their guidance. But those comp sales decreases and then additionally e-commerce sales decreases 5.2% over year over year-- on a year over year basis. And that representing 15.1% of their total net sales for the period.

You just got to wonder, like, what investors are paying attention to on this one.

JULIE HYMAN: Well, maybe they're paying attention to bad news being priced in perhaps. We saw the weekly chart there. We also saw the chart year to date in which the stock is down almost 40% going into today's numbers. So the bounce then makes-- I mean, it's still a chart that does not reflect a lot of optimism over the longer term for the company.

And if you look at these numbers, to your point, they're not great numbers. Year over year declines in comps in earnings per share, gross margin advancing year over year. But 30-- or excuse me, falling year over year, but beating estimates at 32.8%.

Just to give a little background as well for those who aren't as familiar with Hibbett Sports, I feel like DICK'S is a more national name, right? Foot Locker certainly a more national and international name as well. This company headquartered in Birmingham, Alabama, where you were just--

BRAD SMITH: I was just down there.

JULIE HYMAN: I know you were. And they have just over 1,100 Hibbett and City Gear stores in 36 states. So more stores actually than DICK'S. But I think DICK'S has a bigger store-- the stores themselves are larger.

BRAD SMITH: Sure.

JULIE HYMAN: But just to give a little bit of color on what this company is for those who don't know.

BRAD SMITH: All right. Well, next time I'm down there, I got to pop in one.