Hibbett Sports (HIBB) EPS Guidance For 2010 Seems Conservative, Given Positive Sales Trends
Analyst Biegelsen of FBR Capital Markets maintains his "market perform" rating on Hibbett Sports Inc (NASDAQ: HIBB). The target price for HIBB has been raised from $22 to $26.
According to FBR Capital Markets, “Hibbett exceeded expectations this quarter with strong comp sales growth, even after excluding a sizeable contribution from Saints and University of Alabama merchandise, spurred by their championship wins.” “EPS guidance for the year is $1.12–$1.30 (which implies flat to 15% EPS growth), versus current consensus of $1.18, and is based on a comp increase of 1%–4%. Given positive sales trends YTD, we think management is being conservative. We are forecasting FY11 comps of +4.9% (with gains in 1H11 moderating in the back half), which, coupled with better leverage, translates to EPS of $1.32 (+18% YOY),” the analyst says.
FBR Capital Markets mentions that “the expansion of high-performing stores (19 in the quarter, 20 more planned for FY11) is proving to be a prudent use of capital—store expansions helped drive the comp, while management gave some credit for improvement to a strategy of bringing in spring merchandise earlier this year (January versus February), and it believes the uptick derived from this strategy will be incremental sales versus pull forward from 1Q.” “While the shift may steal a bit, given QTD momentum (QTD comps are up 14%, and are up 11% to +12% after excluding Alabama and the Saints merchandise) and easier comparisons as the quarter progresses, we think comp strength is sustainable, leading into a substantially easier comparison in 2Q (–10.5% last year),” the analysts add.
