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Here's Why Hibbett (HIBB) Deserves a Place in Your Portfolio

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Hibbett Sports Inc. (HIBB - Free Report) has been on the growth trajectory lately, benefiting primarily from progress on the e-commerce front and expansion of the loyalty program. It is also on track with store-expansion and inventory-management initiatives, which are likely to spur growth in the years ahead. Additionally, the athletic goods retailer’s growth endeavors and sound fundamentals have been favoring its performance.

These factors have collectively contributed to solid share price trend in the past three months. The Zacks Rank #1 (Strong Buy) company has rallied 18.2% in the past three months, outperforming the industry’s growth of 2.9%. Further, the stock has comfortably surpassed the Retail-Wholesale sector’s rally of 7.4% and the S&P 500’s growth of 10% in the same period.

Factors Favoring the Stock

Hibbett’s positive earnings and comparable store sales (comps) trend are indicative of its solid position in the industry. The company has been gaining from contributions from the City Gear business acquired last year as well as strong in-store and online sales.  Further, lower occupancy expenses have been aiding its margins.

Strong brick-and-mortar and e-commerce businesses have been the key contributors to comps growth over the past few quarters. Innovative launches in categories like footwear, activewear and accessories have also been driving growth.

Moreover, the company stands to gain from growth endeavors, which include store rationalization, e-commerce expansion and improved loyalty program. Its focus on increasing customer base through e-commerce and selective store expansion has been supporting its strong position in the industry.

Notably, the company enhanced omni-channel experience for customers, with six ways to shop. These include shopping at physical stores, traditional e-commerce with home delivery, buy online and pick up in store, reserve online and pick up in store, same-day delivery, and using app to win the right to purchase coveted launch shoes. Currently, the company is on track to launch the buy online ship to store capability by the first half of the next year to further enhance customer experience.

It is also enhancing e-commerce business through the complete integration of City Gear into its digital portals. Additionally, Hibbett revamped its website and apps, added flexible payment options for customers, and launched same-day delivery in many markets. The company has also improved its ability to communicate with customers across all marketing channels.

Concurrently, Hibbett is progressing well with its loyalty program to enhance omni-channel initiatives. Impressively, loyalty enrollments have increased 68% in a year.

The company is also gaining from the small market strategy as it continues to strengthen presence across the country. It targets expansion in markets with increased growth potential. It targets to grow to more than 1,500 stores in underserved markets.

We expect the company to gain from the focus on improving store productivity, omni-channel growth and enhanced e-commerce business in the years ahead. Additionally, its long-term earnings growth rate of 12.2% and VGM Score of A reflect its inherent strength.

Other Favorable Retails Picks

DICK'S Sporting Goods, Inc. (DKS - Free Report) has a long-term earnings growth rate of 5.7%. It currently flaunts a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Zumiez Inc. (ZUMZ - Free Report) has a long-term earnings growth rate of 12%. It sports a Zacks Rank #1 at present.

Boot Barn Holdings, Inc. (BOOT - Free Report) has an impressive long-term earnings growth rate of 17%. It presently carries a Zacks Rank #2 (Buy).

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