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Hibbett's Endeavors Look Prim, What's in Store for Next year?

Zacks Equity Research

Hibbett Sports Inc. HIBB looks prim on its sound fundamentals and growth endeavors. The Birmingham, AL-based company has been benefiting primarily from progress on the e-commerce front and expansion of the loyalty program. Further, it is on track with store expansion and inventory-management initiatives. Smooth execution of these initiatives is likely to keep the company’s dynamism going in 2020.

Moreover, the Zacks Consensus Estimate for Hibbett’s bottom line for the next fiscal year indicates an improvement of 10.2% from the year-ago reported figure. Additionally, the company’s long-term earnings growth rate of 12.2% and VGM Score of A reflect its inherent strength.

Shares of the athletic goods retailer have advanced as much as 93.1% year to date, outperforming the industry’s growth of 1.1%. Further, this Zacks Rank #1 (Strong Buy) stock has comfortably outperformed the Retail-Wholesale sector’s rally of 24.6% and the S&P 500’s growth of 27.2%.

 


Endeavors to Drive Stock Momentum

Hibbett’s focus on increasing customer base through e-commerce and selective store expansion has been supporting its strong position in the industry. Notably, the company has enhanced omni-channel experience for customers with six ways to shop. These include shopping at physical stores, traditional e-commerce with home delivery, buy online and pick up in store, reserve online and pick up in store, same-day delivery, and using app to win the right to purchase coveted launch shoes.

Currently, Hibbett is on track to launch the buy online ship to store capability by the first half of the next fiscal year to further enhance customer experience.

Meanwhile, it is progressing well with its loyalty program to enhance omni-channel initiatives. Impressively, loyalty enrollments have increased 68% in a year.

Concurrently, the company is also is gaining from the small market strategy as it continues to strengthen presence across the country. It targets expansion in markets with increased growth potential. The company targets to grow to more than 1,500 stores in underserved markets.

Hibbett’s comparable store sales (comps) stand to gain from the aforementioned efforts. Strong brick-and-mortar and e-commerce businesses have been the key contributors to comps growth over the past few quarters. Innovative launches in categories like footwear, activewear and accessories have also been growth drivers.

The above-mentioned factors suggest that there are plenty of reasons to be optimistic about the stock going into 2020.

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