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Will Dismal Comps Hurt Hibbett (HIBB) this Earnings Season?


Hibbett Sports, Inc. HIBB is slated to release second-quarter fiscal 2018 results on Aug 18. The question lingering in investors’ minds is whether this sporting goods retailer will be able to deliver a positive earnings surprise in the quarter to be reported. While the company delivered a positive earnings surprise in the last reported quarter, it has underperformed the Zacks Consensus Estimate by an average of 1.6% in the trailing four quarters. Let’s see how things are shaping up prior to this announcement.

Hibbett Sports, Inc. Price and EPS Surprise

Hibbett Sports, Inc. Price and EPS Surprise | Hibbett Sports, Inc. Quote

What to Expect?

The current Zacks Consensus Estimate for the quarter under review is pegged at a loss of 20 cents, which compares unfavorably with the prior-year period earnings of 29 cents. . Moreover, analysts polled by Zacks expect revenues of $190.9 million, down about 7.8% from the year-ago quarter.

Hibbettforms part of the Retail- Wholesale sector. Per the latest Earnings Trends, the sector’s earnings are expected to dip 0.9% year over year, while revenues are projected to grow 4.1%.

Factors at Play

Hibbett recently revealed soft preliminary comparable store sales (comps) data for second-quarter fiscal 2018. The company stated that comps for the quarter could tumble as much as 10%, owing to extremely challenging sales trends. Further, the company indicated that the decline in sales and pressured margins, would lead to a loss of 19–22 cents per share in the quarter to be reported. While management concurrently announced the launch of its e-Commerce site, it was not enough to revive investors’ sentiment. Evidently, shares of Hibbett have plunged 27.9% since its dismal preliminary results that were released on Jul 24. In fact, Hibbett has an unimpressive sales surprise history, as the company has lagged the sales estimates in eight out of the past nine quarters.

Together, the murky surprise history and preliminary outcome have caused Hibbett to crash a steep 60.2% so far this year, much wider than the industry’s drop of 9.9%. Well, these factors make us quite apprehensive about the company’s upcoming results.

What the Zacks Model Unveils?

Our proven model does not conclusively show that Hibbettis likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hibbett has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at a loss of 20 cents. Further, the company currently carries a Zacks Rank #5 (Strong Sell). Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions. The combination of Hibbett’s unfavorable Zacks Rank and Earnings ESP of 0.00% lowers surprise prediction.

Here Are 3 Stocks with Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Big Lots, Inc. BIG has an Earnings ESP of +6.56% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Gap Inc. GPS has an Earnings ESP of +3.85% and a Zacks Rank #2.

Burlington Stores, Inc. BURL has an Earnings ESP of +6.00% and a Zacks Rank #2.

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