Shares in sports clothes seller Hibbett Sports Inc (NASDAQ:HIBB) plummeted over 15% in pre-market deals as its second quarter numbers fell short of expectations and it nearly chopped its full year guidance in two.
Wall Street, as several firms have found out in recent days, has not taken kindly to outlook cuts.
The company swung to a net loss of US$3.2mln, or 15 US cents a share in the three months to July 29 from posting a profit of US$6.5mln, or 29 US cents a share, a year ago. Consensus estimates had been for a loss of 20 US cents a share.
Very difficult retail environment
Its full year EPS (earnings per share) outlook was now put by the firm at between US$1.25 and US$1.35 compared to US$2.35 to US$2.55 previously.
For the quarter, Hibbett said it opened six new stores, expanded four high performing stores and closed eight underperforming stores. It now has 1,080 stores in 35 states as of July 29, 2017.
The group's president and chief executive Jeff Rosenthal conceded that the firm "experienced a very difficult retail environment in the quarter, with a significant decline in transactions and resulting pressure on gross margin".
He added that looking ahead, the firm expected the external environment to remain challenging, although it was encouraged with the progress the company is making on its internal initiatives, notably on its new e-commerce website.