Hibbett Sports (NASDAQ: HIBB) is set to report its earnings results for the second quarter of 2020 on Friday before the market opens. The results will be hurt by softer sales in licensed products and team sports as well as higher costs and expenses arising from the investments in stores.

As the retail environment continues to evolve, the company remains focused on improving the productivity of the store base while continuing to grow its omnichannel business. The company decided to close about 95 underperforming Hibbett stores during fiscal 2020 and this will result in non-recurring impairment and store closure charges of $0.15 to $0.20 per share in fiscal 2020.

In the e-commerce market, competition continues to intensify as the Internet continues to facilitate competitive entry into the market and comparison shopping by consumers. The company’s future success could be materially impacted by retail trends, including technology, e-commerce, and other process efficiencies.

What to expect from Hibbett Sports Q2 earnings
Photo Courtesy: Hibbett Sports

Hibbett competes with e-commerce retailers, traditional shoe stores, department and discount stores, national sporting goods superstores, specialty sporting goods shops, local sporting goods stores, outlet centers, and mass merchandisers. The results could decline due to the increase in spending on marketing and promotion as well as a decrease in prices due to competitors pressure.

Analysts expect the company to report a loss of $0.16 per share on revenue of $255.86 million for the second quarter. In comparison, during the previous year quarter, Hibbett posted a loss of $0.06 per share on revenue of $211.12 million. The company has surprised investors by beating analysts’ expectations twice in the past four quarters.

Read: Nike Q4 earnings review

For the first quarter, Hibbett Sports reported a 28% jump in earnings as improved performance in both the store and e-commerce channels drove revenues higher. Comparable store sales increased by 5.1% as strength in footwear and sneaker-connected apparel & accessories continued to offset softer sales in licensed products and team sports.

For fiscal 2020, the company expects earnings in the range of $1.70 to $1.85 per share and adjusted earnings in the range of $2.00 to $2.15 per share. Comparable store sales growth are anticipated to be in the range of 0.5% to 2%. Capital expenditures are still projected to be about $18 million to $22 million.

Get access to timely and accurate verbatim transcripts that are published within hours of the event.