We have maintained our long-term 'Outperform' recommendation
Hibbett Sports, Inc
). Our recommendation is based on the company's
better-than-expected bottom-line performance in 9 back-to-back
quarters and enhanced outlook for fiscal 2013.
The company's quarterly earnings have been outperforming the
Zacks Consensus Estimate for the past 9 consecutive quarters with
an average surprise of 9.3%. Hibbett's most recently reported
earnings of 71 cents per share for third-quarter of fiscal 2013,
comfortably beat the Zacks Consensus Estimate of 68 cents and
climbed 20% from the year-ago quarter earnings of 59 cents. The
company's bottom line was primarily benefitted from robust sales
growth and operational efficiencies.
Boosted by strong business from back-to-school buyers, net
sales escalated 9.6% year over year to $202.9 million and
surpassed the Zacks Consensus Estimate of $201.0 million.
Buoyed by better-than-expected results, continued sales
strength along with improved cost management and margins, the
company raised its expectations for fiscal 2013. It now forecasts
earnings in the range of $2.66-$2.71 per share, versus the prior
guidance of $2.57-$2.67 per share. The current Zacks Consensus
Estimate for the fiscal is pegged at $2.71 per share. Comparable
store sales for the year are expected to increase in the
mid-single digit range.
Apart from strong third-quarter results, Hibbett's growth
story looks compelling. We believe that the company's sharp focus
on expanding its store network in mid-sized and smaller markets,
as well as better product mix are the key growth drivers.
Other Stocks to Consider
Currently, Hibbett holds Zacks Rank #4 (Sell) rating. However,
other stocks in the industry that are worth considering include
Big 5 Sporting Goods Corporation
Five Below, Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
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