Markets
FL

Earnings Scorecard: Hibbett - Analyst Blog

Hibbett Sports Inc . ( HIBB ) recently delivered better-than-expected results for the third quarter ended October 29, 2011.

Street analysts had nearly a week to ponder on the news. In the subsequent paragraphs, we cover the recent earnings announcement, analysts' estimate revisions as well as the Zacks Rank and long-term recommendation on the stock.

Earnings Report Review

Robust performance of footwear and apparel sales along with operational efficiencies facilitated Hibbett to post earnings of 59 cents a share, beating the Zacks Consensus Estimate of 51 cents and jumped 34.1% from the prior-year quarter earnings of 44 cents.

Hibbett, which competes with Foot Locker Inc. ( FL ) and Wal-Mart Stores Inc. ( WMT ),posted net sales of $185.2 million, up 10.6% year over year on the back of 7% increase in comparable store sales. The quarterly sales also surpassed the Zacks Consensus Estimate of $180 million.

Buoyed by better-than-expected results, management raised its fiscal 2012 earnings forecast. The company now expects earnings in the range of $2.05 to $2.11, up from its earlier forecast of $1.90 to $2.00 per share.

Management stated that it expects a mid single-digit increase in comparable store sales in the current fiscal.

(Read our full coverage on this earnings report: Hibbett Shines, Guides high ).

Agreement of Estimate Revisions

Clearly, a positive sentiment is evident among analysts following the earnings release. In the last 7 days, 14 out of the 15 analysts covering the stock increased their estimates while none of the analysts lowered the same for fourth-quarter 2012. For first-quarter 2013, 9 analysts revised their estimates in the upward direction, while one chopped the estimates in the last 7 days.

For both fiscal 2012 and 2013, 15 analysts have increased their estimates in the last 7 days, while none of the analysts lowered their projection for fiscal 2012 and 2013.

Magnitude of Estimate Revisions

In the last 7 days, the Zacks Consensus Estimate for fiscal 2012 rose by 11 cents to $2.12, and for fiscal 2013, the Estimate climbed by 17 cents to $2.45.

For both the fourth-quarter 2012 and first-quarter 2013, the Zacks Consensus Estimate went up by 3 cents to 55 cents and 87 cents, respectively, in the last 7 days.

The current Zacks Consensus for fourth-quarter 2012 is pegged from a low of 50 cents to a high of 60 cents. For fiscal 2012, the estimates range from $2.08 to $2.16.

Factors Driving Estimates

Hibbett strongly focuses on small towns and counties with population sizes of 25,000 to 75,000. It serves a niche market by strategically aligning its merchandise to regional/local sporting and community interests.

Further, the company is in the midst of a brisk store expansion program and plans to augment its network by approximately 51 to 53 new stores during fiscal year ending on January 31, 2012. Furthermore, Hibbett's management has already identified 350 to 375 locations for future stores and recently ramped up its distribution center to support over 1,200 stores from 1,000 stores earlier. This provides a strong upside potential to the company.

Moreover, the company has a healthy debt-free balance sheet coupled with full availability under its $80 million unsecured credit facilities, thus providing the company the financial flexibility to boost future growth.

Currently, Hibbett holds a Zacks #1 Rank, implying a short-term 'Strong Buy' rating. Besides, the company retains a long-term 'Outperform' recommendation.

About Earnings Estimate Scorecard

Len Zacks, PhD in mathematics from MIT, proved over 30 years ago that earnings estimate revisions are the most powerful force impacting stock prices. He turned this ground breaking discovery into two of the most celebrating stock rating systems in use today. The Zacks Rank for stock trading in a 1 to 3 month time horizon and the Zacks Recommendation for long-term investing (6+ months). These "Earnings Estimate Scorecard" articles help analyze the important aspects of estimate revisions for each stock after their quarterly earnings announcements. Learn more about earnings estimates and our proven stock ratings at: http://www.zacks.com/education/

FOOT LOCKER INC ( FL ): Free Stock Analysis Report

HIBBET SPORTS ( HIBB ): Free Stock Analysis Report

WAL-MART STORES ( WMT ): Free Stock Analysis Report

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

FL WMT HIBB

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More