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Why Hibbett Sports (HIBB) is a Suitable Investment Pick Now

By Zacks Investment ResearchStock MarketsApr 07, 2021 01:31AM ET
Why Hibbett Sports (HIBB) is a Suitable Investment Pick Now
By Zacks Investment Research   |  Apr 07, 2021 01:31AM ET
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Hibbett Sports (NASDAQ:HIBB), Inc. HIBB is worth giving a shot right now as its sound fundamentals and growth efforts look impressive. The Zacks Rank #1 (Strong Buy) stock boasts of a VGM Score of B. Notably, shares of this company have rallied 33.7% in the past three months compared with the industry’s growth of 1.6% and against the Retail Wholesale sector’s decline of 2.6%.

That said, let’s delve into the factors that make Hibbett a promising bet.

Strength in Omnichannel Capabilities

Hibbett has been benefiting from robust performance on the e-commerce front and expansion of its loyalty program. It is leveraging its omnichannel capabilities such as buy online and pick-up in store, reserve online and pick-up in store, buy online ship to store facility, same day delivery and mobile app services to fulfill online orders and serve customers. This led to a strong online show, which accounted for 17.1% of total sales in fourth-quarter fiscal 2021. Moreover, comparable store sales (comps) for the online business soared 44.8% year over year. Strength in footwear, apparel and accessories acted as upsides.

Impressive Q4 Results

Gains from enhanced omnichannel capabilities and robust demand, particularly for athletic apparel, were reflected in Hibbett’s fourth-quarter fiscal 2021 results. Markedly, the company’s top and bottom lines improved year over year. Net sales increased 20.4% year over year with comps growth of 21.9% in the quarter. Expanded omnichannel facilities, new customer acquisitions, solid demand for footwear, apparel and accessories, and additional stimulus payments contributed to the quarterly performance. Going ahead, management expects positive momentum to continue on the back of Hibbett and City Gear brands.

Positive FY22 Outlook

Encouraged by solid results, pent-up customer demand, gains from new customers, rising online sales and robust vendor relationships, management issued guidance for fiscal 2022. The company guided earnings in the range of $5-$5.50 per share. Moreover, gross margin is anticipated to expand nearly 130-170 basis points.

Bottom Line

All said, we believe that solid demand, driven by strength in core categories, along with a robust e-commerce business, will help the company keep its stellar show on. Topping it, the Zacks Consensus Estimate for fiscal 2022 earnings is pegged at $5.05 per share, which has increased 41.1% in the past 60 days.

Other Stocks to Consider From the Retail Space

Abercrombie & Fitch ANF has a long-term earnings growth rate of 18% and currently, a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

L Brands (NYSE:LB) LB currently has a long-term expected earnings growth rate of 13% and a Zacks Rank #1.

Tapestry (NYSE:TPR) TPR, with a Zacks Rank #2 (Buy), has an expected long-term earnings growth rate of 10%.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

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L Brands, Inc. (LB): Free Stock Analysis Report

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Zacks Investment Research
Why Hibbett Sports (HIBB) is a Suitable Investment Pick Now

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Why Hibbett Sports (HIBB) is a Suitable Investment Pick Now

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