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Is Hibbett (HIBB) Poised to Beat Earnings Estimates in Q2?
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Hibbett Sports, Inc. (HIBB - Free Report) is slated to release second-quarter fiscal 2019 results on Aug 24, before the market opens. The company boasts an impressive earnings surprise history, with an average beat of 25.7% in the last four quarters.
Notably, the Zacks Consensus Estimate for the fiscal second quarter is pegged at 8 cents per share, which has witnessed an uptrend in the last 30 days. Further, it reflects a significant improvement from the loss per share of 15 cents reported in the prior-year quarter.
Hibbett Sports, Inc. Price, Consensus and EPS Surprise
Let’s see how things are shaping up prior to this earnings announcement.
Factors Likely to Influence 2Q19
Hibbett is encouraged by the progress that it is making on its internal initiatives, including improving e-commerce penetration and expanding its loyalty program. It remains focused on expanding the customer base by connecting with more customers through e-commerce and selective store expansion. Notably, e-commerce sales accounted for nearly 7% of total sales in first-quarter fiscal 2019. Further, the company is encouraged with the early results of its new mobile app, which has been downloaded nearly 130,000 times since the launch and is contributing to overall digital sales.
Further, the company is on track to launch the “buy online and pick-up in store” and “reserve in-store” capabilities ahead of the holiday season, which is likely to aid in boosting traffic, both in stores and online. During the fiscal first quarter, the company continued to witness growth from the recent revamp of its loyalty program. Moreover, it is likely to drive traffic at stores by reinventing the e-mail program, direct mail program and in-store raffle process with the App. Hibbett expects the small market strategy, along with growth of omni-channel capabilities, to enrich customers' experience, consequently positioning it well for long-term growth.
Hibbett seems on track with store expansion and inventory management initiatives. The company reiterated its target of growing to over 1,500 stores in underserved markets. In first-quarter fiscal 2019, it introduced seven stores, expanded four high-performing stores and shut down 18 underperforming ones. Additionally, the company is stringently working on inventory management initiatives despite a challenging environment.
Notably, analysts surveyed by Zacks expect revenues of $215.2 million, reflecting a growth of 14.5% from the year-ago period.
Robust strategies have also raised investors’ confidence in the stock as it has substantially outperformed the industry in the past month. Shares of Hibbett have surged 9.5% while the industry dipped 0.1%. This shows a positive sentiment on the stock ahead of the earnings release.
However, both earnings and sales missed estimates in first-quarter fiscal 2019. Earnings were hurt by soft margins and higher SG&A expenses, whereas sales dropped due to soft comps. The company has been grappling with strained margins for a while now. This is clear from the reduction in gross and operating margins for the last seven quarters. Increased promotions and markdowns undertaken to clear inventory, along with higher freight related to e-commerce sales and higher SG&A expenses, have been weighing upon margins.
The company expects easier gross margin comparisons in the fiscal second quarter due to the week shift caused by the 53rd week last year. However, the shift is likely to impact gross margin in the fiscal third quarter. Nevertheless, management continues to envision earnings per share of $1.65-$1.95 for fiscal 2019 compared with $1.71 in fiscal 2018.
What the Zacks Model Unveils
Our proven model shows that Hibbett is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Hibbett currently has an Earnings ESP of +57.90% and a Zacks Rank #3.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Big Lots Inc. (BIG - Free Report) has an Earnings ESP of +4.48% and a Zacks Rank of 2.
Dollar Tree, Inc. (DLTR - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #2.
Looking for Stocks With Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Is Hibbett (HIBB) Poised to Beat Earnings Estimates in Q2?
Hibbett Sports, Inc. (HIBB - Free Report) is slated to release second-quarter fiscal 2019 results on Aug 24, before the market opens. The company boasts an impressive earnings surprise history, with an average beat of 25.7% in the last four quarters.
Notably, the Zacks Consensus Estimate for the fiscal second quarter is pegged at 8 cents per share, which has witnessed an uptrend in the last 30 days. Further, it reflects a significant improvement from the loss per share of 15 cents reported in the prior-year quarter.
Hibbett Sports, Inc. Price, Consensus and EPS Surprise
Hibbett Sports, Inc. Price, Consensus and EPS Surprise | Hibbett Sports, Inc. Quote
Let’s see how things are shaping up prior to this earnings announcement.
Factors Likely to Influence 2Q19
Hibbett is encouraged by the progress that it is making on its internal initiatives, including improving e-commerce penetration and expanding its loyalty program. It remains focused on expanding the customer base by connecting with more customers through e-commerce and selective store expansion. Notably, e-commerce sales accounted for nearly 7% of total sales in first-quarter fiscal 2019. Further, the company is encouraged with the early results of its new mobile app, which has been downloaded nearly 130,000 times since the launch and is contributing to overall digital sales.
Further, the company is on track to launch the “buy online and pick-up in store” and “reserve in-store” capabilities ahead of the holiday season, which is likely to aid in boosting traffic, both in stores and online. During the fiscal first quarter, the company continued to witness growth from the recent revamp of its loyalty program. Moreover, it is likely to drive traffic at stores by reinventing the e-mail program, direct mail program and in-store raffle process with the App. Hibbett expects the small market strategy, along with growth of omni-channel capabilities, to enrich customers' experience, consequently positioning it well for long-term growth.
Hibbett seems on track with store expansion and inventory management initiatives. The company reiterated its target of growing to over 1,500 stores in underserved markets. In first-quarter fiscal 2019, it introduced seven stores, expanded four high-performing stores and shut down 18 underperforming ones. Additionally, the company is stringently working on inventory management initiatives despite a challenging environment.
Notably, analysts surveyed by Zacks expect revenues of $215.2 million, reflecting a growth of 14.5% from the year-ago period.
Robust strategies have also raised investors’ confidence in the stock as it has substantially outperformed the industry in the past month. Shares of Hibbett have surged 9.5% while the industry dipped 0.1%. This shows a positive sentiment on the stock ahead of the earnings release.
However, both earnings and sales missed estimates in first-quarter fiscal 2019. Earnings were hurt by soft margins and higher SG&A expenses, whereas sales dropped due to soft comps. The company has been grappling with strained margins for a while now. This is clear from the reduction in gross and operating margins for the last seven quarters. Increased promotions and markdowns undertaken to clear inventory, along with higher freight related to e-commerce sales and higher SG&A expenses, have been weighing upon margins.
The company expects easier gross margin comparisons in the fiscal second quarter due to the week shift caused by the 53rd week last year. However, the shift is likely to impact gross margin in the fiscal third quarter. Nevertheless, management continues to envision earnings per share of $1.65-$1.95 for fiscal 2019 compared with $1.71 in fiscal 2018.
What the Zacks Model Unveils
Our proven model shows that Hibbett is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Hibbett currently has an Earnings ESP of +57.90% and a Zacks Rank #3.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Foot Locker, Inc. (FL - Free Report) has an Earnings ESP of +3.55% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Big Lots Inc. (BIG - Free Report) has an Earnings ESP of +4.48% and a Zacks Rank of 2.
Dollar Tree, Inc. (DLTR - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #2.
Looking for Stocks With Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>