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3 Reasons Why You Should Add Hibbett to Your Portfolio Now

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Hibbett Sports, Inc. (HIBB - Free Report) is worth giving a shot right now as its sound fundamentals and growth efforts look impressive. The Zacks Rank #1 (Strong Buy) stock boasts of a VGM Score of A. Notably, shares of this company have skyrocketed 101.3% in the past three months compared with the industry and the Retail Wholesale sector’s growth of 19% and 10.2%, respectively.

That said, let’s delve into the factors that make Hibbett a promising bet.

Solid Online Show

Hibbett has been benefiting from robust performance on the e-commerce front and expansion of its loyalty program. It is leveraging its omnichannel capabilities, such as home delivery, buy online and pick-up in store, reserve online and pick-up in store, buy online ship to store facility, same-day delivery and mobile app services to fulfill online orders and serve customers. This led to online sales growth of 212.2% year over year in the fiscal second quarter. The growth is attributed to a 49% rise in online traffic on the back of increased customers in the second quarter. Going ahead, management has increased focus on promotions and marketing strategies for the online business. It also noted that initial fiscal third-quarter sales remained robust.

Impressive Q2 Results

Hibbett posted second-quarter fiscal 2021 results, wherein the bottom line surpassed the Zacks Consensus Estimate. Further, the company’s top and bottom lines improved year over year. Results gained from improved traffic in stores and website, stemming from pent-up customer demand. Moreover, comparable store sales (comps) surged 79.2% in the quarter, driven by solid performance in apparel and footwear along with athletic brands and performance business.

Positive Outlook

Driven by its fiscal second-quarter results, management issued GAAP guidance for the second half of fiscal 2021. It expects comps growth in mid-single digit. With some of its competitors closing down stores, Hibbett is anticipating higher sales to the tune of roughly $20-$40 million annually. Moreover, it expects earnings between 85 cents and $1 per share. Gross margin is anticipated to expand nearly 50-70 bps in the second half of fiscal 2021. The company predicts no material difference between GAAP and non-GAAP figures in the fiscal second half.

All said, we believe that a solid top line, driven by strength in core categories, along with a robust e-commerce business, will help the company keep its stellar show on.

Stocks to Consider

Target Corporation (TGT - Free Report) has an expected long-term earnings growth rate of 7.2% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

DICK’S Sporting Goods (DKS - Free Report) has an expected long-term earnings growth rate of 4.8%. Also, the company sports a Zacks Rank #1.

Sally Beauty Holdings (SBH - Free Report) , a Zacks Rank #2 (Buy) stock, has an expected long-term earnings growth rate of 4.1%.

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