Canada Markets closed

Factors Setting the Tone for Hibbett (HIBB) in Q3 Earnings

Zacks Equity Research

Hibbett Sports, Inc. HIBB is slated to release third-quarter fiscal 2020 results on Nov 22, before the market opens.

Notably, the company's earnings were in line with the Zacks Consensus Estimate in the preceding quarter. However, the bottom line outpaced estimates by 12.1%, on average, over the trailing four quarters.

The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at 12 cents, which suggests a decline of 14.3% from the year-ago period. The consensus estimate has been unchanged in the past 30 days. Moreover, the consensus mark for sales is pegged at $256.4 million, indicating growth of 18.2% from the year-ago reported figure.

Hibbett Sports, Inc. Price and EPS Surprise


Hibbett Sports, Inc. Price and EPS Surprise

Hibbett Sports, Inc. price-eps-surprise | Hibbett Sports, Inc. Quote

Key Factors to Note

Hibbett’s fiscal third-quarter sales are expected to reflect gains from solid omni-channel initiatives, including store rationalization, e-commerce and loyalty program. Notably, the company’s e-commerce business has been benefiting from enhancements in mobile app, and the “Buy Online, Pick Up in Store” and “Reserve online, pickup in store” capabilities. New sign-ups and loyalty enrollments as well as its efforts to improve the email program have also been driving growth.

In addition, Hibbett’s impressive product offerings coupled with the robust City Gear business on strong assortment of the latest and fashion-forward inventory are expected to have contributed to its fiscal third-quarter performance. Also, its continued focus on sneakers, active apparel, accessories and footwear categories has been driving growth. These factors are likely to get reflected in Hibbett’s comparable-store sales (comps) performance for the quarter to be reported. The consensus estimate for fiscal third-quarter comps suggests growth of 3.5% from the year-ago reported figure.
However, Hibbett has been witnessing higher SG&A expenses for a while now. Additionally, higher investments for the expansion of e-commerce capabilities have been affecting margin growth. Inventory liquidation at stores and limited markdown activity has also been affecting the company. In addition, management’s accelerated store closure plan to increase productivity has been adding to margin pressure, thanks to lack of sales from the closed stores. All these factors might have hurt the company’s margins and overall profits in third-quarter fiscal 2020.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Hibbett this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Hibbett carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

Ross Stores, Inc ROST has an Earnings ESP of +4.03% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Walmart Inc WMT currently has an Earnings ESP of +2.45% and a Zacks Rank #2.

Lowe's Companies, Inc LOW presently has an Earnings ESP of +1.62% and a Zacks Rank #2.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
Ross Stores, Inc. (ROST) : Free Stock Analysis Report
Hibbett Sports, Inc. (HIBB) : Free Stock Analysis Report
To read this article on click here.