Hibbett Sports, Inc. HIBB is slated to release second-quarter fiscal 2021 results on Aug 28, before market open. The company delivered a negative earnings surprise of 27.9% in the last reported quarter. However, its bottom line outpaced estimates by 27.05%, on average, over the trailing four quarters.
The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at $1.75, which suggests a marked improvement from a loss of 13 cents reported in the year-ago period. The consensus estimate has been unchanged in the past 30 days.
Key Factors to Note
On Jul 21, the company updated investors on its sales results for the second quarter of fiscal 2021, ending Aug 1. It highlighted that its top line has been encouraging, driven by pent-up consumer demand, additional payments from government programs, consumers’ increasing preference for online shopping and temporary store closures of its rivals due to the pandemic. In fact, some of its competitors have shut stores permanently after being badly hit by the impacts of the virus outbreak. These instances have led to a rise in store and online traffic along with gaining new customers.
Hibbett Sports, Inc. Price and EPS Surprise
Further, the company has been gaining from store-reopening efforts in a phased manner. In this regard, Hibbett Sports and City Gear stores started opening at the end of April, keeping in mind local health guidelines. Currently, it reopened the majority of its stores, which are witnessing solid momentum.
Also, increased focus on e-commerce operations by offering home delivery, buy online and pick-up in store, reserve online and pick-up in store, buy online ship to store, same-day delivery, and mobile app services to fulfill online orders and serve customers better bodes well.
Hibbett’s enhanced omni-channel capabilities, improved supply-chain management, ability to provide in-demand products to customers and store reopening efforts have been enabling it to combat the tough retail environment. Also, it expects significant contributions from the recently acquired City Gear business to have aided sales in the to-be-reported quarter.
For second-quarter fiscal 2021, the company envisioned total comparable store sales (comps) growth of more than 70% year over year, with brick and mortar comps and online comps expected to rise nearly 60% and 200%, respectively. Meanwhile, total comps for the first half of fiscal 2021 are projected to increase 20% year over year, with growth in brick and mortar comps and online comps of 7% and 140%, respectively.
Notably, first-time customers are likely to contribute 25% to brick and mortar sales, and roughly 40% to online sales.
Despite interacting with vendors to manage inventory, the company anticipates inventory levels to be down significantly year over year. Additionally, it is likely to have incurred costs related to increased business, leading to sturdy sales along with the implementation of safety protocols for employees and customers as well as employee benefits and compensation. Moreover, the continued impacts of the COVID-19 outbreak and the uncertainty looming over the back-to-school season are expected to have hurt the company’s performance.
Our proven model does not conclusively predict an earnings beat for Hibbett this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Hibbett carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this time around.
Best Buy Co., Inc. BBY has an Earnings ESP of +6.63% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar General Corporation DG has an Earnings ESP of +9.64% and a Zacks Rank #2.
DICK’S Sporting Goods, Inc. DKS has an Earnings ESP of +30.93% and a Zacks Rank #3.
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