Retail Stocks Plundered Again, Thanks to An Obscure Sporting Goods Warning

A boutique sporting goods retailer, domiciled in rural America, Hibbett Sports, warned this morning — which has led to sharp declines amidst the entire retail landscape — most notably in the shares of BGFV and DKS.

Based on very challenging sales trends, comparable store sales are expected to decrease ~10% for the second quarter ending July 29, 2017. The decline in sales, along with significant pressure on gross margin, is expected to result in a loss of $0.19 to $0.22 per diluted share for Q2 vs. +$0.15 consensus. Additional details and revised full-year guidance will be provided on August 18, 2017, when the Company reports its second quarter results.

The Co also announced the launch of a new, transactional e-commerce website, www.Hibbett.com. The site will provide customers with a robust, user-friendly experience and will have an expansive assortment of footwear, apparel and equipment items to choose from. The site will also be fully integrated with Company stores, including visibility of in-store inventory, the ability to fulfill online orders from stores, the ability to return online purchases in stores, and full integration of the newly enhanced Hibbett Rewards program.

The warning sent HIBB down a solid 30%.

The geniuses on Wall Street are hitting footwear stocks especially hard, since Hibbett is a major player in the sneaker game genre. Names like GCO, FINL, FL, BOOT, DECK, CAL and SCVL are getting claw hammered. SHLD is off by nearly 6% and M is off by another 2%.

This is such a wretched industry that even the slightest semblance of bad news sends shareholders scurrying for shelter. Like oil and gas, these stocks are toxic and should not be part of any long term investment strategy.