Why the Pandemic Didn’t Hurt Hibbett Sports

Hibbett Sports Inc. (NASDAQ: HIBB) reported second-quarter fiscal 2021 results before markets opened Friday. The sporting goods retailer reported adjusted diluted earnings per share (EPS) of $2.95 on revenues of $441.6 million. In the same period a year ago, the company reported a net loss per share of $0.13 on revenue of $252.4 million. Second-quarter results also compare to consensus estimates for EPS of $1.15 and $349.6 million in revenue.

Comparable store sales rose by 72.9% year over year, with brick-and-mortar store comps rising 65.2% and e-commerce sales soaring by 212.2%. E-commerce sales accounted for nearly 16% of second-quarter sales, up from 8.6% in the same period last year.

Hibbett attributed the sales boost to pent-up consumer demand, temporary and permanent store closures by competitors, and federal stimulus money. CEO Mike Longo commented, “We believe that these circumstances yielded increased traffic to our stores and website and provided new customers the opportunity to experience our trademark service.”

Adjusted gross margin rose from 30.3% a year ago to 36.7% in the second quarter, which Hibbett attributed to higher sell-through, a reduction in inventory valuation reserves, and “leverage of store occupancy expenses.” Adjusted SG&A expenses fell from 28.5% of sales last year to 19.3%, again due to higher sales totals.

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The company said it had $217.8 million in available cash at the end of the quarter, no debt and $75 million available in its secured credit facility.

For the second half of the 2021 fiscal year, Hibbett guided comparable store sales up in the mid-single-digit range and gross margins up 50 to 70 basis points year over year. Diluted EPS is forecast in a range of $0.85 to $1.00. The company does not expect adjustments to EPS to be material.

Analysts are expecting third-quarter EPS of $0.30 a share on sales of $273.5 million and full-year EPS of $2.36 on sales of $1.22 billion. In the first six months of its fiscal year, Hibbett has reported EPS of $3.30 and sales of $711.4 million.

Hibbett stock traded up more than 8% in Friday’s premarket session at $32.55, above the 52-week range of $7.33 to $30.98. The consensus price target on the stock is $29.50. Second-quarter results parallel those from Dick’s Sporting Goods Inc. (NYSE: DKS | DKS Price Prediction), which reported results earlier this week.

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