Hibbett’s 3Q Profit Soars 353%; Analyst Raises PT

Hibbett Sports reported stronger-than-expected 3Q results. The sporting goods chain’s adjusted earnings of $1.45 per share surpassed analysts’ estimates of $0.45 and jumped 353.1% year-over-year, reflecting robust e-commerce sales and higher gross margins.

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The company’s e-commerce sales surged 50.7% and now represent 13.2% of total revenues, up from 10.5% in the year-ago quarter. Meanwhile, its adjusted gross margin expanded 570 basis points to 38.1% in 3Q.

Hibbett Sports’ (HIBB) 3Q revenues rose 20.3% to $331.4 million and beat the the Street’s estimates of $286 million. Its comparable sales grew 21.2%, reflecting 17.5% growth in brick and mortar comparable sales.

The company’s CEO Mike Longo said, “Our third quarter comparable sales growth of 21.2% was driven by several factors, including new customer retention, the timing of back-to-school spending, and availability of in-demand footwear, apparel and accessories. We believe that these factors helped drive additional transactions and a higher average ticket across our store footprint as well as online.” (See HIBB stock analysis on TipRanks)

For 4Q, Hibbett expects comparable sales to increase in the high-single digits to low-double digits. The retailer anticipates adjusted EPS to generate between $1 and $1.10.

Following the 3Q results, Robert W. Baird analyst Peter Benedict raised the stock’s price target to $48 (12.6% upside potential) from $35 and maintained a Hold rating. Benedict is impressed with Hibbett’s “blowout” 3Q performance as the company registered comparable sales growth across all sales channels and witnessed over 700 basis points improvement in EBIT (Earnings Before Interests and Taxes) margin.

Currently, the Street is sidelined on the stock with a Hold analyst consensus. The average price target stands at $45 and implies upside potential of about 5.5% from current levels. Shares are up by 52.1% year-to-date.