Hibbett

HIBB · NASDAQ

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HIBB analyst rating

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The case for and against

Updated Jul 24, 2024

Bull case

Hibbett is experiencing strong financial performance, illustrated by a significant top and bottom-line beat for F3Q; this performance is partly driven by an impressive sales growth in women's footwear and the successful operations of popular brands such as Nike. Revised upward projections for 2023 EPS to $8.00-$8.30 from the previous $7.00-$7.75 range point towards an optimistic financial outlook, potentially stemming from better end-market demand, market share gains, and cost discipline. Additionally, the company demonstrated sound financial strategies through repurchasing roughly 6% of its own shares and maintaining a profitable operating margin, which anticipated an 11% increase in the 2023 EPS outlook.

Bear case

Hibbett is facing several challenges, with its gross margin declining by 40 basis points year over year due to increased promotionality across footwear and apparel sectors. Its revenue projections remain flat with only a 2% increase, including the benefit of an additional trading week, despite a decline in comparable store sales of 2.7%. Inventory reduction suggests possible attempts to stabilize or reduce promotions; however, the downswing of 1.7% year on year and 4.3% on a per store basis could lead to lower availability of attractive goods for customers and limit sales potential.

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