Shares of sporting goods retailer Hibbett Sports, Inc. (NASDAQ:HIBB) jumped as much as 26.6% in trading Friday after the company reported better-than-expected third-quarter earnings and raised guidance. At 12:05 p.m. EST, shares had given back some of their gains but were still up 12.6% on the day.
Revenue was up 0.4% to $237.8 million and net income dropped from $14.6 million a year ago to $7.6 million, or $0.37 per share. On net, the company only added one store in the quarter, so sales per store were flat.
Analysts were only expecting revenue of $217.6 million and earnings of $0.21 per share, which is why investors were so surprised with the results. On top of the beat last quarter, management increased full-year fiscal 2018 earnings guidance from $1.25-$1.35 up to $1.42-$1.50 per share. Comparable store sales are also expected to be down mid-single digits, better than previous guidance of mid- to high single digits.
This is really a case of a company beating extremely low expectations rather than reporting impressive results. Given the decline in in-store sales, I still don't think the sporting goods business is a great buy right now, and Hibbett isn't a big player in online retail. Neither of those is a good trend for Hibbett long-term, and that will keep me out of the stock despite an earnings beat today.