Hibbett Surges on Store Reopening Plans & Solid E-Commerce
Hibbet Sports, Inc. HIBB is worth giving a shot as its sound fundamentals and growth efforts look impressive. Further, this Zacks Rank #2 (Buy) stock has a VGM Score of A. Shares of the company skyrocketed 79.4% in the past three months, outperforming the industry and the Retail-Wholesale sector’s growth of 28.3% and 30.1%, respectively.
That said, let’s delve into the factors that make Hibbett a promising bet.
Factors Narrating Hibbett’s Growth Story
Although the coronavirus pandemic continues to create havoc, Hibbett has started reopening its stores in a phased manner, keeping in mind the local guidelines. From the end of April, Hibbett Sports and City Gear stores began operating with improved traffic. Also, with more and more stores reopening, the momentum continued in May. We hope that store reopening efforts are likely to provide some cushion to the company’s top line.
Further, the company is gaining from robust e-commerce business. Its strong online show amid the pandemic cushioned the top line to some extent in first-quarter fiscal 2021. While stores remained closed since mid-March, the company witnessed strong online demand and leveraged its omni-channel capabilities, such as home delivery, buy online and pick-up in store, reserve online and pick-up in store, buy online and ship to store, same day delivery and mobile app services to fulfill online orders and serve customers. This resulted in nearly a 22.3% year-over-year increase in online sales in the fiscal first quarter. Encouraged by the spike in online demand, management has increased focus on promotions and marketing strategies for the online business. It also noted that fiscal second-quarter sales remained robust.
In a bid to enhance its omni-channel initiatives, management remains focused on the expansion of the loyalty program. This will also help Hibbett attract more customers. Keeping Moreover, the company remains on track with store expansion and inventory-management initiatives. Going ahead, the company has a target of growing to more than 1,500 stores in underserved markets.
Despite continued impacts of COVID-19 that led the company to withdrew the fiscal 2021 view, we believe that Hibbett’s growth endeavors are likely to help it stay afloat amid the current scenario and sustain its stellar show.
Other Stocks to Watch
Office Depot ODP has an expected long-term earnings growth rate of 6.8% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sally Beauty Holdings SBH, a Zacks Rank #1 stock, has an expected long-term earnings growth rate of 4.1%.
Tractor Supply Company TSCO has an expected long-term earnings growth rate of 12.4%. Also, the company has a Zacks Rank #2.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.