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Is Hibbett Sports Losing its Sheen Amid Rampant Competition? - Analyst Blog

We have issued an updated research report on Hibbett Sports Inc.HIBB on Jul 6, 2015.

The company began fiscal 2016 on a disappointing note as both top and bottom lines for the first quarter fell short of the Zacks Consensus Estimate. Consequently, Hibbett lowered its guidance for the full fiscal year.

We note that the company reported three consecutive quarters of earnings beat before succumbing to a negative earnings surprise in the first quarter. Quarterly earnings of $1.09 per share missed the Zacks Consensus Estimate by 4.4% but remained flat year over year. Top line of $269.8 million also fell short of the Zacks Consensus Estimate of $274.1 million. Results were affected by dismal comparable-store sales (comps) performance, particularly in February due to shift in the timing of tax refunds, inclement weather conditions and West Coast port unrest.

The company now envisions fiscal 2016 earnings per share in the range of $2.95-$3.04, compared with a band of $2.95-$3.09 projected earlier. Additionally, Hibbett now anticipates comps to grow in the low single-digit range, compared with low-to-mid single-digit growth expected earlier.

Moreover, the estimates for Hibbett have been displaying a downtrend due to the aforementioned reasons. It seems that analysts have become less constructive on the stock's future performance. This is evident from the Zacks Consensus Estimate that tumbled to $2.98 from $3.04 for fiscal 2016 and to $3.27 from $3.32 for fiscal 2017 over the past 60 days.

It seems that this Zacks Rank #4 (Sell) company is losing its market share to competitors. The entry of DICK's Sporting Goods Inc. DKS , a leading sporting goods store retailer, into smaller and mid-sized markets has added to the company's woes. This has not only increased competition for Hibbett, but also raised the likelihood of higher store occupancy costs and operating expenses.

Further, the growth of its peers such as Sport Chalet Inc. and The Sports Authority Inc. in the small store format could hurt Hibbett's sales, affecting overall results.

Key Picks from the Sector

Some better-ranked stocks in the same industry include Barnes & Noble, Inc. BKS and Five Below, Inc. FIVE . Both carry a Zacks Rank #2 (Buy).

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BARNES & NOBLE (BKS): Free Stock Analysis Report

DICKS SPRTG GDS (DKS): Free Stock Analysis Report

HIBBET SPORTS (HIBB): Free Stock Analysis Report

FIVE BELOW INC (FIVE): Free Stock Analysis Report

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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.


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

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