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Hibbett Sports (HIBB) Down 2.6% Since Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Hibbett Sports, Inc. (HIBB - Free Report) . Shares have lost about 2.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Hibbett Beats on Q1 Earnings, Lowers FY18 Forecast
Hibbett reported first-quarter fiscal 2018 results, wherein earnings per share of $0.97 plunged 20.5% year over year, while it came a penny ahead of the Zacks Consensus Estimate. The year-over-year decline in the bottom line could be attributable to weak sales and increased costs, which also weighed upon margins.
Net sales dropped 2.3% to $275.7 million, falling short of the Zacks Consensus Estimate of $277.3 million. Further, comparable-store sales (comps) fell 4.9%, hurt by soft traffic during the holiday season. Management stated that the double-digit fall in February comps could only be partly cushioned by better trends in March and April, where comps rose in low to mid-single-digit range.
Category-wise, comps were marred by softness noted across the apparel and equipment businesses, somewhat compensated by continued strength in Hibbett’s footwear business – that witnessed a low-single digit rise.
Hibbett’s gross profit fell 6.4% to $98.2 million, while gross margin contracted 160 basis points (bps) to 35.6%. The decline in margin was due to unfavorable markdowns associated with excess inventory, along with logistics and store occupancy cost deleverage.
Further, operating income tumbled 23% to $34.2 million, whereas operating margin contracted 330 bps to 12.4%, mainly due to higher store operating, selling and administrative expenses (also as a percentage of sales). Higher expenses resulted from reduced comps and incremental costs associated with the company’s omnichannel initiatives.
Other Financial Aspects
Hibbett ended the quarter with nearly $75.9 million in cash and cash equivalents, no outstanding bank debt and total availability under its credit facilities worth $80 million. Total shareholders’ investment, as of Apr 29, was roughly $335.2 million.
The company’s capital expenditure was $7.8 million in the quarter. Further, Hibbett repurchased 748,134 million shares worth $22.3 million during the quarter, following which it had shares worth roughly $236.2 million remaining under its standing authorization, as of Apr 29.
Store Update
In first-quarter fiscal 2018, Hibbett introduced 13 stores, expanded four high-performing stores and shut down nine underperforming ones. As a result, it ended the quarter with 1,082 stores across 35 states. In the long run, Hibbett targets taking its store count to 1,500.
Hibbett also implemented its “store-to-home” capacity across all stores during the quarter, which was well-received. Encouraged by the response, management anticipates greater benefits from this strategy in future, as it is likely to enhance sales and consumers’ experience. Additionally, the company introduced a fresh loyalty program in the quarter, to improve customers’ loyalty towards its brand. Moreover, the company is pleased with the progress of its e-commerce endeavors, and is on track to launch its website in the third quarter.
Outlook
Following a soft quarter, management lowered its comps and gross margin outlook for fiscal 2018, alongside reiterating its recently downgraded earnings view.
In fiscal, the company now expects comps growth to range from negative 1% to increase 1%. This compares unfavorably with the old forecast of growth in low-single digit range. Further, management now anticipates gross margin to contract 55 – 75 bps. Earlier, management projected gross margin to remain flat year over year.
Finally, in fiscal 2018, which will have an additional week, the company envisions earnings to range from $2.35–$2.55 per share. Hibbett recently provided a business update on its first quarter, where it lowered its earnings outlook to the aforementioned range from $2.65–$2.85 per share expected earlier.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been five revisions lower for the current quarter. While looking back an additional 30 days, we can see even more downside. There have been seven moves down in the last two months. In the past month, the consensus estimate has shifted lower by 17.1% due to these changes.
Currently, Hibbett's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #5 (Strong Sell). We expect below average returns from the stock in the next few months.
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Hibbett Sports (HIBB) Down 2.6% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Hibbett Sports, Inc. (HIBB - Free Report) . Shares have lost about 2.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Hibbett Beats on Q1 Earnings, Lowers FY18 Forecast
Hibbett reported first-quarter fiscal 2018 results, wherein earnings per share of $0.97 plunged 20.5% year over year, while it came a penny ahead of the Zacks Consensus Estimate. The year-over-year decline in the bottom line could be attributable to weak sales and increased costs, which also weighed upon margins.
Net sales dropped 2.3% to $275.7 million, falling short of the Zacks Consensus Estimate of $277.3 million. Further, comparable-store sales (comps) fell 4.9%, hurt by soft traffic during the holiday season. Management stated that the double-digit fall in February comps could only be partly cushioned by better trends in March and April, where comps rose in low to mid-single-digit range.
Category-wise, comps were marred by softness noted across the apparel and equipment businesses, somewhat compensated by continued strength in Hibbett’s footwear business – that witnessed a low-single digit rise.
Hibbett’s gross profit fell 6.4% to $98.2 million, while gross margin contracted 160 basis points (bps) to 35.6%. The decline in margin was due to unfavorable markdowns associated with excess inventory, along with logistics and store occupancy cost deleverage.
Further, operating income tumbled 23% to $34.2 million, whereas operating margin contracted 330 bps to 12.4%, mainly due to higher store operating, selling and administrative expenses (also as a percentage of sales). Higher expenses resulted from reduced comps and incremental costs associated with the company’s omnichannel initiatives.
Other Financial Aspects
Hibbett ended the quarter with nearly $75.9 million in cash and cash equivalents, no outstanding bank debt and total availability under its credit facilities worth $80 million. Total shareholders’ investment, as of Apr 29, was roughly $335.2 million.
The company’s capital expenditure was $7.8 million in the quarter. Further, Hibbett repurchased 748,134 million shares worth $22.3 million during the quarter, following which it had shares worth roughly $236.2 million remaining under its standing authorization, as of Apr 29.
Store Update
In first-quarter fiscal 2018, Hibbett introduced 13 stores, expanded four high-performing stores and shut down nine underperforming ones. As a result, it ended the quarter with 1,082 stores across 35 states. In the long run, Hibbett targets taking its store count to 1,500.
Hibbett also implemented its “store-to-home” capacity across all stores during the quarter, which was well-received. Encouraged by the response, management anticipates greater benefits from this strategy in future, as it is likely to enhance sales and consumers’ experience. Additionally, the company introduced a fresh loyalty program in the quarter, to improve customers’ loyalty towards its brand. Moreover, the company is pleased with the progress of its e-commerce endeavors, and is on track to launch its website in the third quarter.
Outlook
Following a soft quarter, management lowered its comps and gross margin outlook for fiscal 2018, alongside reiterating its recently downgraded earnings view.
In fiscal, the company now expects comps growth to range from negative 1% to increase 1%. This compares unfavorably with the old forecast of growth in low-single digit range. Further, management now anticipates gross margin to contract 55 – 75 bps. Earlier, management projected gross margin to remain flat year over year.
Finally, in fiscal 2018, which will have an additional week, the company envisions earnings to range from $2.35–$2.55 per share. Hibbett recently provided a business update on its first quarter, where it lowered its earnings outlook to the aforementioned range from $2.65–$2.85 per share expected earlier.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been five revisions lower for the current quarter. While looking back an additional 30 days, we can see even more downside. There have been seven moves down in the last two months. In the past month, the consensus estimate has shifted lower by 17.1% due to these changes.
Hibbett Sports, Inc. Price and Consensus
Hibbett Sports, Inc. Price and Consensus | Hibbett Sports, Inc. Quote
VGM Scores
Currently, Hibbett's stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #5 (Strong Sell). We expect below average returns from the stock in the next few months.