A sports rout on Wall Street
Aug. 18, 2017
NEW YORK (AP) — Sporting goods retailers can't shake their losing streak.
Shares of stores that mostly sell sneakers and sporting gear plummeted Friday after Foot Locker and smaller rival Hibbett Sports reported a drop in sales in the latest quarter. Both also offered gloomy outlooks for the rest of the year.
Sporting goods retailers are facing increasing competition from department stores and clothing chains, which are beefing up the number of sneakers and athletic wear they sell, said Neil Saunders, a retail analyst at GlobalData.
At the same time, sneaker brands are increasingly selling their goods directly to customers through their own websites or stores. That means shoppers don't need to head to a sporting goods stores to pick up sneakers or running shorts. Sports Authority went out of business last year, closing all its 460 stores after filing for bankruptcy protection.
In June, Nike said it would begin selling its shoes through Amazon.com, but it fell sharply with nearly all sports-related stocks Friday. Under Armour tumbled almost 4 percent.
Foot Locker said Friday that some of its top-selling sneaker styles, such as Nike's Air Jordan sneakers, didn't sell as well in the second quarter. Sales fell 6 percent at established Foot Locker stores during the quarter. That was the company's first quarterly decline of the figure in seven years.
Foot Locker Inc. shares fell 28 percent to close Friday at $34.38, their biggest percentage decline since 2008.
Hibbett Sports Inc., meanwhile, said sales at established stores fell 11.7 percent, worse than the 10 percent drop the company said it expected last month. The company also slashed its earnings per share forecast range for the full year and Hibbett's stock hit an all-time low of $9.40 on Friday. They ended the day down 5 percent at $10.90.
Other shares of sporting goods retailers also fell sharply. Dick's Sporting Goods Inc. dropped almost 3 percent and The Finish Line Inc. fell 8 percent.