Hibbett (HIBB) Unveils Bullish Picture On Solid Q3 Earnings

Hibbett Sports, Inc.’s (NASDAQ:HIBB) robust third-quarter fiscal 2018 results and upbeat earnings outlook have raised analysts’ optimism on the stock. This is evident from the upward revisions in the Zacks Consensus Estimate. Moreover, the company’s solid growth strategies with a VGM Score of B and a Zacks Rank #1 (Strong Buy) makes it a suitable pick for investors now.

In fact, a look at Hibbett’s share price performance reveals that the stock has gained 4.7% since it reported its third-quarter earnings on Nov 17. In the past three months, the company’s shares rallied 51.1%, as against the industry’s fall of 0.6%. The upside was driven by Hibbett’s solid earnings surprise history.

Positive Estimate Revisions

The Zacks Consensus Estimate for fiscal 2018 and fiscal 2019 has witnessed solid upward revisions in the past 30 days. While the consensus mark for fiscal 2018 moved north by 12 cents to $1.42, for fiscal 2019 the same climbed by 22 cents to $1.40. The estimates for the fiscal fourth quarter also increased by a penny to 25 cents over the same time frame.

Hibbett has to its credit a robust earnings surprise history. Also, the company retained its positive earnings trend in the fiscal third quarter, which marked its third straight bottom-line beat. Further, its top line outpaced estimates after two consecutive quarters of miss.

Results were driven by improvement in the company’s footwear and apparel businesses, alongside strong e-commerce sales. Though its margins declined year over year on higher promotions, markdowns and freight costs, management substantially raised guidance for fiscal 2018. Earnings are now envisioned in the range of $1.42-$1.50 per share, up from the previous forecast of $1.25-$1.35. (Read more: Hibbett Rallies on Q3 Earnings & Sales Beat, Ups View)

Growth Catalysts

Hibbett remains well positioned to gain from growth of omni-channel capabilities, improved Rewards members, small market strategy and inventory management initiatives. While the external environment remains challenging, the company is encouraged by the progress of its internal initiatives including the launch of its new e-commerce site and the re-launch of its loyalty program.

Meanwhile, Hibbett seems to be on track with its store expansion and inventory management endeavors. Also, the company targets expansion in markets where it is needed and offer increased potential for future growth. Additionally, it boasts solid financials with a debt-free balance sheet.

Given the company’s solid efforts and impressive outlook, we believe that Hibbett is most likely to sustain this positive momentum ahead.

Looking for More? Check These Trending Picks

Some other top-ranked stocks in the broader Retail space include KAR Auction Services, Inc. (NYSE:KAR) , Ross Stores, Inc. (NASDAQ:ROST) and Zumiez Inc. (NASDAQ:ZUMZ) holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KAR Auction, with a long-term earnings growth rate of 13.4% has pulled off an average positive earnings surprise of 7.3% in the last four quarters. Also, the Zacks Consensus Estimate for 2017 has moved up by 11 cents to $2.36 in the past 30 days.

The fiscal 2017 consensus mark for Ross Stores has moved north by 6 cents to $3.28 in the past 30 days. Also, it has a long-term earnings growth rate of 10% and delivered an average positive earnings surprise of 5.5% in the trailing four quarters.

Zumiez has a long-term earnings growth rate of 18%. Also, the company’s earnings have outpaced the consensus estimate in each of the trailing four quarters by an average of 27.1%. Its fiscal 2017 consensus mark has increased by a penny to $1.05 in the past 30 days.

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