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Hibbett (HIBB) Up 17.1% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Hibbett (HIBB - Free Report) . Shares have added about 17.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hibbett due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Hibbett posted third-quarter fiscal 2024 results, wherein earnings and sales surpassed the Zacks Consensus Estimate. The bottom line increased year over year, while the top line declined. The company attributes its solid results to the consistent execution of its business strategy, indicating the effectiveness of its approach in a challenging retail environment.
Quarterly Highlights
Hibbett's adjusted earnings of $2.05 per share increased 5.7% from the $1.94 reported in the prior-year quarter. Also, the figure surpassed the Zacks Consensus Estimate of $1.13 per share.
Net sales fell 0.3% year over year to $431.9 million for the quarter under review. However, the figure beat the Zacks Consensus Estimate of $416 million.
Comparable sales declined 2.7% year over year and lagged our estimate of a 7% decline. Brick-and-mortar comparable sales specifically experienced a 5.4% decrease on a year-over-year basis, whereas e-commerce sales demonstrated a noteworthy increase of 12.6%.
The gross profit decreased 1.6% year over year to $146.3 million for the reported quarter, which beat our estimate of $137.6 million. Meanwhile, the gross margin contracted 40 basis points (bps) to 33.9%, driven by a decrease in the average product margin, which was roughly 130 basis points lower than the previous year. Also, the decrease was largely influenced by increased promotional activity in footwear and apparel.
Furthermore, the slight year-over-year sales decrease led to the deleverage of store occupancy costs, accounting for the gross margin decline. Despite these unfavorable factors, there was partial mitigation through lower freight, shipping, shrink and logistics expenses in comparison to the year-ago period.
Operating income was $34.5 million, up 0.9% year over year. The metric surpassed our estimate of $20.9 million. Meanwhile, the operating margin expanded 10 bps to 8% for the reported quarter.
Store operating, selling and administrative expenses, as a percentage of sales, contracted 90 bps to 23% due to its sustained efforts in expense management. This includes enhancing the efficiency of store labor and making strategic reductions in discretionary expense categories like professional fees and advertising.
Other Financials
As of Oct 28, Hibbett had $29.6 million in cash and cash equivalents, and $96.9 million of debt outstanding on its $160.0-million unsecured line of credit. In the fiscal third quarter, Hibbett repurchased 707,621 shares for $32 million. Management paid out a quarterly dividend of 25 cents per share.
FY2024 Guidance
Management retained its fiscal 2024 net sales view. Hibbett expects net sales between flat and a 2% rise. The company anticipates comparable sales and in-store comps to decline in the low-single digits each, and e-commerce sales to be flat to up in the low-single digits. It was slightly higher than the previous guidance of a low-single-digit decline.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, Hibbett has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.
Outlook
Hibbett has a Zacks Rank #1 (Strong Buy). We expect an above average 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, Capri Holdings (CPRI - Free Report) , a stock from the same industry, has gained 1.5%. The company reported its results for the quarter ended September 2023 more than a month ago.
Capri Holdings reported revenues of $1.29 billion in the last reported quarter, representing a year-over-year change of -8.6%. EPS of $1.13 for the same period compares with $1.79 a year ago.
Capri Holdings is expected to post earnings of $1.85 per share for the current quarter, representing a year-over-year change of +0.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
Capri Holdings 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 F.
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Hibbett (HIBB) Up 17.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Hibbett (HIBB - Free Report) . Shares have added about 17.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hibbett due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Hibbett Beats Q3 Earnings Estimates, Raises EPS View
Hibbett posted third-quarter fiscal 2024 results, wherein earnings and sales surpassed the Zacks Consensus Estimate. The bottom line increased year over year, while the top line declined. The company attributes its solid results to the consistent execution of its business strategy, indicating the effectiveness of its approach in a challenging retail environment.
Quarterly Highlights
Hibbett's adjusted earnings of $2.05 per share increased 5.7% from the $1.94 reported in the prior-year quarter. Also, the figure surpassed the Zacks Consensus Estimate of $1.13 per share.
Net sales fell 0.3% year over year to $431.9 million for the quarter under review. However, the figure beat the Zacks Consensus Estimate of $416 million.
Comparable sales declined 2.7% year over year and lagged our estimate of a 7% decline. Brick-and-mortar comparable sales specifically experienced a 5.4% decrease on a year-over-year basis, whereas e-commerce sales demonstrated a noteworthy increase of 12.6%.
The gross profit decreased 1.6% year over year to $146.3 million for the reported quarter, which beat our estimate of $137.6 million. Meanwhile, the gross margin contracted 40 basis points (bps) to 33.9%, driven by a decrease in the average product margin, which was roughly 130 basis points lower than the previous year. Also, the decrease was largely influenced by increased promotional activity in footwear and apparel.
Furthermore, the slight year-over-year sales decrease led to the deleverage of store occupancy costs, accounting for the gross margin decline. Despite these unfavorable factors, there was partial mitigation through lower freight, shipping, shrink and logistics expenses in comparison to the year-ago period.
Operating income was $34.5 million, up 0.9% year over year. The metric surpassed our estimate of $20.9 million. Meanwhile, the operating margin expanded 10 bps to 8% for the reported quarter.
Store operating, selling and administrative expenses, as a percentage of sales, contracted 90 bps to 23% due to its sustained efforts in expense management. This includes enhancing the efficiency of store labor and making strategic reductions in discretionary expense categories like professional fees and advertising.
Other Financials
As of Oct 28, Hibbett had $29.6 million in cash and cash equivalents, and $96.9 million of debt outstanding on its $160.0-million unsecured line of credit. In the fiscal third quarter, Hibbett repurchased 707,621 shares for $32 million. Management paid out a quarterly dividend of 25 cents per share.
FY2024 Guidance
Management retained its fiscal 2024 net sales view. Hibbett expects net sales between flat and a 2% rise. The company anticipates comparable sales and in-store comps to decline in the low-single digits each, and e-commerce sales to be flat to up in the low-single digits. It was slightly higher than the previous guidance of a low-single-digit decline.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, Hibbett has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.
Outlook
Hibbett has a Zacks Rank #1 (Strong Buy). We expect an above average 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, Capri Holdings (CPRI - Free Report) , a stock from the same industry, has gained 1.5%. The company reported its results for the quarter ended September 2023 more than a month ago.
Capri Holdings reported revenues of $1.29 billion in the last reported quarter, representing a year-over-year change of -8.6%. EPS of $1.13 for the same period compares with $1.79 a year ago.
Capri Holdings is expected to post earnings of $1.85 per share for the current quarter, representing a year-over-year change of +0.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
Capri Holdings 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 F.