Bank of America double-downgraded Hibbett (NASDAQ:HIBB) on Friday after a disappointing earnings update provided in premarket hours.
The team noted the persistent inflationary impact on the business, the surprising continued inventory build, and the signal of a deepening promotional push of peers like Foot Locker (FL) as key factors upending their previous optimism. While Nike’s (NKE) Jordan franchise looks as though it is selling well, per the bank’s channel checks, the team said this is “fully offset by very little demand for secondary franchises.”
Additionally, the bloated inventory levels into the close of Q1 are likely to hang over the company into the back to school season, hampering profitability in a key selling season. As such, the bank’s analysts flipped their rating from Buy to Underperform and slashed their price target from $85 to $35.
The downgrade follows Williams Tradings’ downgrade to Sell on Friday. Shares of Hibbett (HIBB) slipped over 11% on Friday.
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