Piper Jaffray Remains Neutral, Lowers PT On Hibbett Sports

Yesterday after the market close, Hibbett Sports (NASDAQ: HIBB) reported sales and comp and lowered Q4 EPS guidance. In the release, HIBB reported sales of $173.5M on a +1.3% comp. The company also lowered Q4 guidance to $0.42 to $0.44 down from the prior guidance of $0.47 to $0.50. Piper Jaffray is remaining Neutral, but lowers its PT from $33 to $30 on the release. Piper Jaffray is lowering its F12E EPS from $1.82 to $1.68 based on slowing business trends in January and difficult comparisons for much of F12. Piper's F12E net sales of $683.9M is based on a -0.3% comp vs. current consensus of $718.3M and a comp of +2.9%. It is further assuming a gross margin decline of 8bps to 34.5% based on higher product costs and SG&A +9bps to 21.6% due to lower sales than previously estimated. As a result Piper believes operating margins will be -18bps to 10.9% resulting in EPS of $1.68 vs. current consensus of $1.87. Risks to the target price include dependence on product trends within sporting goods, competition, weather, implementation of a new merchandising system, and general macro economic concerns. Piper Jaffray has a Neutral rating and $30 PT on HIBBHIBB is trading lower at $31.10