Yahoo Finance Hibbett Sports, Inc. (NASDAQ:HIBB): Does The Earnings Decline Make It An Underperformer?
When Hibbett Sports, Inc. (NasdaqGS:HIBB) released its most recent earnings update (01 February 2020), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Hibbett Sports's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not HIBB actually performed well. Below is a quick commentary on how I see HIBB has performed.
See our latest analysis for Hibbett Sports
How Did HIBB's Recent Performance Stack Up Against Its Past?
HIBB's trailing twelve-month earnings (from 01 February 2020) of US$27m has declined by -3.9% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of -23%, indicating the rate at which HIBB is growing has slowed down. Why could this be happening? Let's examine what's going on with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Hibbett Sports has fallen short of achieving a 20% return on equity (ROE), recording 8.3% instead. Furthermore, its return on assets (ROA) of 3.5% is below the US Specialty Retail industry of 5.1%, indicating Hibbett Sports's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Hibbett Sports’s debt level, has declined over the past 3 years from 27% to 10%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Typically companies that face a drawn out period of diminishing earnings are going through some sort of reinvestment phase in order to keep up with the recent industry growth and disruption. I recommend you continue to research Hibbett Sports to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for HIBB’s future growth? Take a look at our free research report of analyst consensus for HIBB’s outlook.
Financial Health: Are HIBB’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 01 February 2020. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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