The sporting goods chain's swoon accelerated after it announced preliminary first-quarter results, in which it said comparable-store sales are expected to decrease by as much as 5%. Worse still, the need for additional clearance markdowns to "liquidate aged inventory" prompted management to slash its full-year earnings per share guidance to a range of $2.35 to $2.55, well below its previous estimate of $2.65 to $2.85.
With Hibbett's stock down another 5% so far in May, shares have now plummeted 35% since the beginning of 2017.
Unfortunately for shareholders in the specialty retailer, the declines appear likely to continue, as shopping trends keep shifting toward e-commerce companies and away from traditional brick-and-mortar chains. As such, Hibbett investors may be best served by selling their shares and reallocating their capital to more competitively advantaged businesses.