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Hibbett (HIBB) Down 0.4% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Hibbett (HIBB - Free Report) . Shares have lost about 0.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hibbett due for a breakout? Before we dive into how investors and analysts have reacted as 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’s Q3 Earnings & Sales Lag Estimates, Rise Y/Y
Hibbett posted third-quarter fiscal 2023 results, wherein earnings and sales missed the Zacks Consensus Estimate. However, both metrics improved year over year.
Results gained from compelling products, a quality product mix, robust omnichannel capabilities and a strong back-to-school season. Strength in footwear and accessories acted as major growth drivers. However, high freight and fuel costs and wage inflation remained headwinds.
Driven by a strong inventory position and favorable vendor relationships, the company retained its fiscal 2023 view. Also, HIBB highlighted that its new stores have been performing well and it is on track to extend its market reach.
Quarterly Highlights
Hibbett's adjusted earnings of $1.94 per share rose 16% from $1.68 reported in the prior-year quarter. However, the figure lagged the Zacks Consensus Estimate of $2.56.
Net sales advanced 13.5% year over year to $433.2 million for the quarter under review and jumped 57% on a three-year basis. However, the figure missed the Zacks Consensus Estimate of $438 million.
Comparable store sales (comps) grew 9.9%, while in-store comps rose 7.9% for the quarter under review. Also, comps rose 51.7% and in-store comps grew 42.5% on a three-year basis.
E-commerce sales rose 22% year over year and 124.7% on a three-year basis. It accounted for 15% of the total sales, up from 14% in the prior-year quarter.
The gross profit increased 7.2% year over year to $148.7 million for the reported quarter. Meanwhile, the gross margin contracted 200 bps to 34.3% due to lower average product margins, somewhat offset by reduced logistics costs. Operating income was $34.2 million, up 2.4% year over year, while the operating margin contracted 90 bps to 7.9% for the reported quarter.
Store operating, selling and administrative (SG&A) expenses, as a percentage of sales, contracted nearly 130 bps to 23.9%, driven by higher sales.
Other Financials
Hibbett ended the quarter with $25.1 million in cash and cash equivalents and $73.3 million available under its unsecured credit facilities. Total stockholders' investment, as of Oct 29, was $337.8 million.
In the fiscal third quarter, Hibbett repurchased 160,637 shares worth $9 million. Management paid out a quarterly dividend of 25 cents.
Capital expenditure was $17 million in the reported quarter, stemming from store initiatives, including store openings, relocations, expansions, remodels and technology upgrades. For fiscal 2023, capital expenditure is expected to be $60-$70 million for investment in new stores, remodels, technology advancement and infrastructure.
Store Update
In third-quarter fiscal 2023, the company opened nine stores. As of Oct 29, 2022, it had 1,126 stores across 36 states. HIBB is likely to open 30-40 stores in fiscal 2023.
Looking Ahead
Management expects business and economic challenges, including ongoing supply-chain disruptions, higher freight and transportation costs, inflation, tight labor market, geopolitical conflicts, and reduced consumer spending, for the fourth quarter of fiscal 2023. However, it retained its fiscal 2023 view. Hibbett expects net sales to increase in the low-single-digit range for fiscal 2023. The company anticipates comparable sales growth to be flat to low-double digits versus the low-double-digit growth stated earlier. In-store comps are likely to be flat to low-double-digit growth, while e-commerce is anticipated to grow in the high-single-digit range.
The gross margin is envisioned to contract 290-310 bps year over year, with the metric likely to be 35.1-35.3% due to lower product margins, higher freight and transportation costs, as well as higher store occupancy costs and e-commerce sales. SG&A, as a percent of net sales, is estimated to rise 10-20 bps year over year due to wage inflation, higher costs related to growth in e-commerce, a larger store count and back-office infrastructure investments in fiscal 2022. SG&A, as a percentage of sales, is predicted to be 22.7-22.8%, which is likely to be below the pre-pandemic levels. The operating margin is predicted to be in the low-double-digit range and is likely to remain above the pre-pandemic level. Earnings are anticipated to be $9.75-$10.50 per share, whereas the company posted $11.19 last year. Also, the effective tax rate is expected to be 24.5%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 19.34% due to these changes.
VGM Scores
At this time, Hibbett has an average Growth Score of C, though it is lagging a lot on the Momentum Score 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hibbett has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Hibbett is part of the Zacks Retail - Apparel and Shoes industry. Over the past month, The Children's Place (PLCE - Free Report) , a stock from the same industry, has gained 0.1%. The company reported its results for the quarter ended October 2022 more than a month ago.
The Children's Place reported revenues of $509.12 million in the last reported quarter, representing a year-over-year change of -8.8%. EPS of $3.33 for the same period compares with $5.43 a year ago.
For the current quarter, The Children's Place is expected to post earnings of $0.68 per share, indicating a change of -77.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -6.3% over the last 30 days.
The Children's Place has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Hibbett (HIBB) Down 0.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Hibbett (HIBB - Free Report) . Shares have lost about 0.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hibbett due for a breakout? Before we dive into how investors and analysts have reacted as 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’s Q3 Earnings & Sales Lag Estimates, Rise Y/Y
Hibbett posted third-quarter fiscal 2023 results, wherein earnings and sales missed the Zacks Consensus Estimate. However, both metrics improved year over year.
Results gained from compelling products, a quality product mix, robust omnichannel capabilities and a strong back-to-school season. Strength in footwear and accessories acted as major growth drivers. However, high freight and fuel costs and wage inflation remained headwinds.
Driven by a strong inventory position and favorable vendor relationships, the company retained its fiscal 2023 view. Also, HIBB highlighted that its new stores have been performing well and it is on track to extend its market reach.
Quarterly Highlights
Hibbett's adjusted earnings of $1.94 per share rose 16% from $1.68 reported in the prior-year quarter. However, the figure lagged the Zacks Consensus Estimate of $2.56.
Net sales advanced 13.5% year over year to $433.2 million for the quarter under review and jumped 57% on a three-year basis. However, the figure missed the Zacks Consensus Estimate of $438 million.
Comparable store sales (comps) grew 9.9%, while in-store comps rose 7.9% for the quarter under review. Also, comps rose 51.7% and in-store comps grew 42.5% on a three-year basis.
E-commerce sales rose 22% year over year and 124.7% on a three-year basis. It accounted for 15% of the total sales, up from 14% in the prior-year quarter.
The gross profit increased 7.2% year over year to $148.7 million for the reported quarter. Meanwhile, the gross margin contracted 200 bps to 34.3% due to lower average product margins, somewhat offset by reduced logistics costs. Operating income was $34.2 million, up 2.4% year over year, while the operating margin contracted 90 bps to 7.9% for the reported quarter.
Store operating, selling and administrative (SG&A) expenses, as a percentage of sales, contracted nearly 130 bps to 23.9%, driven by higher sales.
Other Financials
Hibbett ended the quarter with $25.1 million in cash and cash equivalents and $73.3 million available under its unsecured credit facilities. Total stockholders' investment, as of Oct 29, was $337.8 million.
In the fiscal third quarter, Hibbett repurchased 160,637 shares worth $9 million. Management paid out a quarterly dividend of 25 cents.
Capital expenditure was $17 million in the reported quarter, stemming from store initiatives, including store openings, relocations, expansions, remodels and technology upgrades. For fiscal 2023, capital expenditure is expected to be $60-$70 million for investment in new stores, remodels, technology advancement and infrastructure.
Store Update
In third-quarter fiscal 2023, the company opened nine stores. As of Oct 29, 2022, it had 1,126 stores across 36 states. HIBB is likely to open 30-40 stores in fiscal 2023.
Looking Ahead
Management expects business and economic challenges, including ongoing supply-chain disruptions, higher freight and transportation costs, inflation, tight labor market, geopolitical conflicts, and reduced consumer spending, for the fourth quarter of fiscal 2023. However, it retained its fiscal 2023 view. Hibbett expects net sales to increase in the low-single-digit range for fiscal 2023. The company anticipates comparable sales growth to be flat to low-double digits versus the low-double-digit growth stated earlier. In-store comps are likely to be flat to low-double-digit growth, while e-commerce is anticipated to grow in the high-single-digit range.
The gross margin is envisioned to contract 290-310 bps year over year, with the metric likely to be 35.1-35.3% due to lower product margins, higher freight and transportation costs, as well as higher store occupancy costs and e-commerce sales. SG&A, as a percent of net sales, is estimated to rise 10-20 bps year over year due to wage inflation, higher costs related to growth in e-commerce, a larger store count and back-office infrastructure investments in fiscal 2022. SG&A, as a percentage of sales, is predicted to be 22.7-22.8%, which is likely to be below the pre-pandemic levels. The operating margin is predicted to be in the low-double-digit range and is likely to remain above the pre-pandemic level. Earnings are anticipated to be $9.75-$10.50 per share, whereas the company posted $11.19 last year. Also, the effective tax rate is expected to be 24.5%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 19.34% due to these changes.
VGM Scores
At this time, Hibbett has an average Growth Score of C, though it is lagging a lot on the Momentum Score 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hibbett has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Hibbett is part of the Zacks Retail - Apparel and Shoes industry. Over the past month, The Children's Place (PLCE - Free Report) , a stock from the same industry, has gained 0.1%. The company reported its results for the quarter ended October 2022 more than a month ago.
The Children's Place reported revenues of $509.12 million in the last reported quarter, representing a year-over-year change of -8.8%. EPS of $3.33 for the same period compares with $5.43 a year ago.
For the current quarter, The Children's Place is expected to post earnings of $0.68 per share, indicating a change of -77.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -6.3% over the last 30 days.
The Children's Place has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.