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Hibbett Sports (HIBB) Q3 Earnings: Is a Beat in the Cards?

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We expect sporting goods retailer, Hibbett Sports Inc. (HIBB - Free Report) to beat expectations when it reports third-quarter fiscal 2017 results on Nov 18.

Last quarter, the company reported earnings beat of 3.6%. Moreover, the company’s bottom line has outperformed the Zacks Consensus Estimate by an average of 3.9% in the trailing four quarters. Let’s see how things are shaping up for this announcement.

HIBBET SPORTS Price and EPS Surprise

HIBBET SPORTS Price and EPS Surprise | HIBBET SPORTS Quote

Why a Likely Positive Surprise?

Our proven model shows that Hibbett may beat earnings because it has the right combination of the two key components.

Zacks ESP: Hibbett currently has an Earnings ESP of +4.00%. This is because the Most Accurate estimate stands at 78 cents, while the Zacks Consensus Estimate is pegged lower at 75 cents. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter

Zacks Rank: Hibbett carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings. Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.

The combination of Hibbett’s Zacks Rank #2 and positive ESP makes us reasonably confident of an earnings beat.

What's Driving the Better-than-Expected Earnings?

Hibbett’s solid earnings in the preceding quarter highlight that its merchandising initiatives are gaining momentum. Further, the company expects to benefit from its small market strategy as it continues to strengthen its presence across the country. Additionally, management remains optimistic about its digital strategy, which will integrate its stores and digital presence with its customers, in an attempt to boost the top line.

Going forward, the company remains optimistic about its robust quarterly performance and progress related to strategic endeavors. Further, robust product assortments make management confident about the back-to-school selling season. This, along with a solid first-half performance, influenced Hibbett to raise its fiscal 2017 earnings forecast.

These factors, along with Hibbett’s expansion endeavors and financial flexibility, bode well for the upcoming results.

However, the company had earlier stated that it anticipates incurring higher costs in fiscal 2017, attributable to its ongoing omni-channel initiatives. This is likely to impact fiscal 2017 earnings to some extent.

Other Stocks that Warrant a Look

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Best Buy Co. Inc. (BBY - Free Report) , scheduled to report earnings on Nov 17, currently has an Earnings ESP of +4.26% and Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar Tree Inc. (DLTR - Free Report) , expected to report earnings on Nov 22, currently has an Earnings ESP of +1.28% and a Zacks Rank #3 (Hold).

Burlington Stores Inc. (BURL - Free Report) , expected to report earnings on Nov 22, currently has an Earnings ESP of +6.06% and a Zacks Rank #3.

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