HIBB Tops Q1 Estimates, Raises FY22 Guidance

Hibbett Sports, Inc. (HIBB) reported stronger-than-expected Q1 results, topping both earnings and revenue estimates, driven by robust comparable sales growth of 87.3%. Shares of the athletic-inspired fashion retailer gained 345.6% over the past year.

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The company reported earnings of $5.00 per share in Q1, beating analysts’ expectations of $2.77 per share. This compared to adjusted earnings of $0.31 per share reported in the same quarter last year.

Net sales of $506.9 million exceeded the consensus estimate of $412.9 billion. Net sales growth of 87.8% on a year-over-year basis was mainly driven by new customer acquisition and retention, government stimulus, and better demand leading to improved traffic and higher revenue per transaction during the quarter. (See Hibbett Sports stock analysis on TipRanks)

The company reported a gross margin of 41.4% compared to 27.5% a year ago. The increase was driven by higher sales through a mix-shift away from lower-margin e-commerce sales, lesser promotions, and reduced reserve charges.

Based on robust Q1 results, management raised the financial guidance for FY2022. Same-store sales are forecast to increase by high-single digits to low-double digits versus the prior guidance range of a decline by low-single digits to an increase in low-single digits.

EPS is expected to range between $8.50 and $9.00, versus the consensus estimate of $5.65.

Recently, the company announced the expansion of its ongoing share repurchase program from $300 million to $800 million to be exercised until February 1, 2025. To date, the company has bought back 7.5 million shares worth $201 million. During the quarter, the company bought back 582,403 shares worth $40.2 million.

HIBB CEO Mike Longo, stated, “The impressive results we have experienced since the beginning of the COVID-19 pandemic reflect our team members’ diligence and dedication toward providing an exceptional customer experience by executing our toe-to-head merchandising strategy successfully. We will continue to make investments in our store base and in technology across our omni-channel platform to further enhance our customer experience as well as improve internal business processes.”

The stock has picked up a rating from one analyst in the past three months. Robert W. Baird analyst Peter Benedict increased the price target to $90 (6.2% upside potential) from $80 and reiterated a Hold rating on the stock.

Benedict was impressed with the robust Q1 results but lower inventory pulled down growth. The analyst believes that the company is capable of strong fundamental EPS growth in the long run though it is hard to estimate margin sustainability as demand normalizes.