Piper Jaffray Remains Neutral, Lowers PT On Hibbett Sports

Yesterday after the market close, Hibbett Sports

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 HIBB HIBB is trading lower at $31.10