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Category: Stock Market and Hibbett Sports
Date: 27 May 2020 Stock Price: $18.72 We take a look at the 1st quarter earnings release of their 2021 fiscal year of Hibbett Sports the athletics inspired fashion retailer selling major brands such as Nike, Adidas and Under Armour. The group suffered a significant loss due to the Covid-19 related lockdowns and stay at home orders.
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About Hibbett Sports
Hibbett, headquartered in Birmingham, Alabama, is a leading athletic-inspired fashion retailer with more than 1,100 stores under the Hibbett Sports and City Gear banners, primarily located in small and mid-sized communities. Founded in 1945, Hibbett has a rich history of convenient locations, personalized customer service and access to coveted footwear, apparel and equipment from top brands like Nike, Jordan, Adidas, and Under Armour. Consumers can browse styles, find new releases, shop looks and make purchases online or in their nearest stor
Overview of Hibbett Sports' 1st quarter 2021 earnings report
Data below refers to the most recent quarter unless specified otherwise
- Sales: $269.837 million (down from $343.295million from the same quarter of the previous year)
- Sales decreased by -21.3% over the last 12 months
- Cost of goods sold: $195.690 million (down from $224.692 million for the same quarter of the previous year)
- Cost of goods sold decreased by -12.9% over the last 12 months
- Net loss: -$15.287 million (decreased from $27.857 million for the same quarter of the previous year)
- Diluted earnings per share: -$0.92 (down from $1.50 for the same quarter of the previous year)
- PE ratio of Hibbett Sports: Since Hibbett is currently loss making a PE ratio cannot be calculated
- Diluted weighted-average shares outstanding: 16.546 million (down from 18.535 million for the same quarter of the previous year)
- Cash and cash equivalents: $106.205 million
- Cash and cash equivalents per share: $6.41
- Cash and cash equivalents makes up 34.2% of Hibbett Sports' market capital
- Cash and cash equivalents makes up 14.37% of Hibbett Sports' total assets
- Inventories: $241.984 million
- Inventories makes up 32.8% of Hibbett Sports' total assets
- Stockholders equity in Hibbett Sports: $304.567 million
- Stockholders equity per share: $18.41
- Hibbett Sports is trading at 1.02 times its stockholders equity per share which is outside the expected range of between 2 and 4 that most firms tend to trade at
- To put this in perspective the average price to book value that firms in the S&P 500 trade at is 3.7. Read more about the S&P 500 here.
Hibbett Sports' management commentary on their 1st quarter 2021 earnings report
BIRMINGHAM, Ala.--(BUSINESS WIRE)--May 26, 2020-- Hibbett Sports, Inc. (Nasdaq/GS: HIBB), an athletic-inspired fashion retailer, today provided financial results for its first quarter ended May 2, 2020, and business updates.
Mike Longo, President and Chief Executive Officer, stated, “I am extremely proud of the Hibbett team. Through their hard work and dedication, we were able to produce strong results during this very challenging retail environment. When COVID-19 struck, we decided to have our customers and team members navigate us through these uncharted waters. In other words, if our customers had essential needs and wanted to shop, and our team was eager to service our loyal customers, then Hibbett would wholeheartedly support them. In conjunction with state and local authorities, we remained open, where prudent, and ran our stores in a way that was both safe for our team members and customers. At the same time, we reinforced our best-in-class digital platform with extra product, marketing, and an emphasis on fulfillment from the distribution centers and the stores, including curbside pick-up. As a result, we gained many first-time customers. Through the hard work of our Hibbett Sports and City Gear stores, the dedication of our distribution center employees and the seven day a week work from our people in the Store Support Center, we accomplished a result that we believe sets us apart from the majority of retail.”
Mike Longo, President and Chief Executive Officer, stated, “I am extremely proud of the Hibbett team. Through their hard work and dedication, we were able to produce strong results during this very challenging retail environment. When COVID-19 struck, we decided to have our customers and team members navigate us through these uncharted waters. In other words, if our customers had essential needs and wanted to shop, and our team was eager to service our loyal customers, then Hibbett would wholeheartedly support them. In conjunction with state and local authorities, we remained open, where prudent, and ran our stores in a way that was both safe for our team members and customers. At the same time, we reinforced our best-in-class digital platform with extra product, marketing, and an emphasis on fulfillment from the distribution centers and the stores, including curbside pick-up. As a result, we gained many first-time customers. Through the hard work of our Hibbett Sports and City Gear stores, the dedication of our distribution center employees and the seven day a week work from our people in the Store Support Center, we accomplished a result that we believe sets us apart from the majority of retail.”
Mr. Longo continued, “We have a strong business model, talented employees and a resilient customer base. Our ability to react, adapt and execute successfully in a constantly changing environment further reinforces the opportunities ahead of us. I believe the Company will emerge from this crisis stronger than ever.”
Adapting to the COVID-19 Business Environment
Throughout this challenging time, the Company was able to navigate a rapidly changing retail landscape by leveraging omni-channel and distribution capabilities, having access to and availability of in-demand products, taking decisive action to protect liquidity and demonstrating the ability to reopen stores quickly when circumstances allowed. A few highlights include:
In addition, the Company continues to be proactive in protecting the health and safety of our team members and customers and all locations are subject to the following safety guidelines:
Fiscal 2021 Outlook
Due to the continued uncertainty regarding the overall impact COVID-19 will have on its business, the Company is not providing a full-year outlook at this time.
Adapting to the COVID-19 Business Environment
Throughout this challenging time, the Company was able to navigate a rapidly changing retail landscape by leveraging omni-channel and distribution capabilities, having access to and availability of in-demand products, taking decisive action to protect liquidity and demonstrating the ability to reopen stores quickly when circumstances allowed. A few highlights include:
- Total comp sales were down less than 20% versus the prior year despite having our store fleet open for approximately 60% of the total available selling days in the quarter.
- Digital traffic was up over 80% and conversion increased 26% for the quarter compared to the prior year. Over 40% of online sales in the second half of the quarter were new customers.
- Inventory allocation systems and distribution infrastructure ramped up to support increased online demand.
- The Merchandise team proactively managed the flow of goods in collaboration with our vendor partners, resulting in a decrease in year-over-year inventory and an inventory balance that remained in line with demand.
- Worked with merchandise and non-merchandise vendors to extend terms.
- Converted two unsecured, demand lines of credit into a single secured line of credit with a one-year term.
- Nearly 700 stores were open to the public at the end of the quarter and over 1,000 are open today. Many reported significant comparable sales increases upon their reopening.
In addition, the Company continues to be proactive in protecting the health and safety of our team members and customers and all locations are subject to the following safety guidelines:
- Stores are being extensively cleaned on a daily basis.
- The number of customers allowed in stores open to the public is limited and social distancing is being practiced and maintained.
- Store employees or customers exhibiting any symptoms are not permitted to enter the store.
- Hand sanitizer is readily available to all team members and customers.
- Curbside pick-up is available for all Buy Online, Pick-up In-Store orders where allowed.
- Contactless payment is available in all stores.
Fiscal 2021 Outlook
Due to the continued uncertainty regarding the overall impact COVID-19 will have on its business, the Company is not providing a full-year outlook at this time.
Hibbett Sports (NASDAQ:HIBB) stock price history
The image below, obtained from Google, shows the stock price history of Hibbett Sports' (NASDAQ: HIBB) over the last 5 years. And it has not been a very good time for Hibbett stockholders. 5 years ago the stock of Hibbett was trading around $46.50 and its currently trading at $18.72. That's a significant decline of -59.7% over the last 5 years. The stock of Hibbett Sports is trading at close to the midpoint between its 52 week high and its 52 week low, which to us is an indication that the short term sentiment towards Hibbest Sports stock is neutral right now.
Hibbett Sports (NASDAQ: HIBB) vs Foot Locker (NYSE: FL)
The image below shows the stock price performance of Hibbett Sports (HIBB) and Foot Locker (FL) over the last 3 years. Hibbett Sports has comfortably outperformed the stock of Foot Locker. While Hibbett stock declined by -18.79% over the last 3 years, Hibbett stock declined by -48.56% over the same time period
Recent coverage of Hibbett Sports
The extract below covers the latest regarding Hibbett as obtained from TheStreet.com
Hibbett Sports (NASDAQ:HIBB) earnings for first quarter of fiscal 2021 have HIBB stock heading higher Tuesday. That’s despite its adjusted earnings per share (EPS) of 31 cents missing Wall Street’s estimate of 65 cents. However, its revenue of $269.84 million is better than analysts’ estimates of $243.67 million.
Let’s take a closer look at the most recent Hibbett Sports earnings report below.
Read the full article here
Hibbett Sports (NASDAQ:HIBB) earnings for first quarter of fiscal 2021 have HIBB stock heading higher Tuesday. That’s despite its adjusted earnings per share (EPS) of 31 cents missing Wall Street’s estimate of 65 cents. However, its revenue of $269.84 million is better than analysts’ estimates of $243.67 million.
Let’s take a closer look at the most recent Hibbett Sports earnings report below.
- Adjusted per-share earnings are down 80.8% from $1.61 in the first quarter of fiscal 2020.
- Revenue comes in 21.4% lower than the $343.3 million reported in the same period of the year prior.
- Operating loss of $22.06 million is a negative switch year-over-year from an operating income of $37.34 million.
- The Hibbett Sports earnings report also has net loss coming in at $15.29 million.
- That’s a major decline compared to the company’s net income of $27.86 million from the same time last year
Read the full article here
Hibbett Sports (NASDAQ: HIBB) latest stock valuation
So based on Hibbett Sports latest earnings report and their fiscal guidance what do we value the company's stock at? Based on Hibbett Sports earnings report, and the fact that they are currently loss making and withdrew their fiscal guidance we will use the stockholders equity per share as the base of of our valuation for Hibbett sports. We therefore value Hibbett Sports at $18.41 a stock. We therefore believe the stock of Hibbett Sports is fully valued
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price) which in this case is $18.41. A good entry point into the stock of Hibbett Sports would therefore be at $16.60 or below. We expect the stock of Hibbett Sports to trade in a narrow range around its current price until states in the US starts opening up more and the group can get feet in their stores again.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price) which in this case is $18.41. A good entry point into the stock of Hibbett Sports would therefore be at $16.60 or below. We expect the stock of Hibbett Sports to trade in a narrow range around its current price until states in the US starts opening up more and the group can get feet in their stores again.
Next earnings release of Hibbett Sports
It is expected that Hibbett Sports will release their 2nd quarter 2021 earnings report in late August 2021