Specialty Retailers Win Q3: HIBB & BKE

Friday, November 22, 2019

Pre-market futures have buoyed up this morning, following some positive sentiment coming from China on a potential “phase one” trade deal. When it looked as if phase one — a trade “truce,” some had been calling it — was less likely to happen, we saw a pull-back on the major U.S. indexes. The Dow and S&P 500 are trying to bounce back off three straight down trading days — their lowest performance levels in months.

China’s President Xi Jinpeng has been quoted as saying he “wants to work on a phase one agreement on the basis of mutual respect.” This comes after warmer language from China’s chief trade negotiator Liu He yesterday. Xi did also say, “When necessary, we will fight back,” so it’s not looking like a full trade agreement will be in the offing near-term. But six weeks after President Trump first brought up the idea of “phase one,” this notion may be back on track after all.

Update: Just moments ago, Trump called a phase one deal “potentially very close,” but also remarked that it “can’t be an even deal.” We will obviously keep close account to any developments on this matter.

After today’s opening bell, we expect new data from November’s PMI Manufacturing and Services report. A month ago, both posted headline numbers above 50, indicating growth: Manufacturing was 51.3, Services 50.9. Manufacturing has not posted a sub-50 headline in the past five years; Services hasn’t done so since a temporary dip in early 2016.

Hibbett Sports (NASDAQ:HIBB) impressed investors with its Q3 earnings report this morning, putting up 32 cents per share on $275.5 million in quarterly sales — easily outpacing the 13 cents and $256.4 million in the Zacks consensus, respectively. Comps rose 10.7% in the quarter.

Perhaps most impressive of all, full-year guidance — which we had pegged at $2.23 per share for the Zacks Rank #2 (Buy)-rated company ahead of the earnings release — was raised to a range of $2.30-2.50 per share. This has helped Hibbett shares rocket upward to the tune of 23% in today’s pre-market.

Zacks Rank #1 (Strong Buy)-rated Buckle (NYSE:BKE) is also up big this morning following its Q3 earnings report: 53 cents per share beat the 47 cents expected (and 42 cents in the year-ago quarter), while its $224.12 million in quarterly revenues barely notched above the Zacks consensus. But with better online sales and higher expectations for its full-year, shares are up nearly 10% in today’s pre-market. For more on BKE’s earnings, click here.

Mark Vickery

Senior Editor

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