Hibbett Sporting Goods - Aggressive Growth

Hibbett Sports, Inc. (HIBB) is a Zacks #1 Rank (Strong Buy) thanks to a recent earnings surprise and subsequent upward estimate revisions.

HIBB stacks up well against its peers and earnings a growing at a double-digit pace.

Company Description

Hibbett Sports operates sporting goods stores in smaller U.S. markets. The store count is at 799 across 26 states and the company aims to open over 50 new locations this year.

EPS Up 29%

On May 20 the company announced great first quarter results for fiscal 2012. Net sales jumped over 10% to $204 million, with same-store sales up almost 7%.

Net income hit $21.3 million, which was a 23% improvement. Earnings per shares came out to $0.76, up 29% and 8 cents better than expected. Hibbett Sports has topped Wall Street forecasts in each of the past 3 quarters.

Part of the surprise was the record-high operating margin. Hibbett Sports continues to realign its focus, opening 8 new stores, expanding 4 of its highly successful stores and closing 7 underperforming locations.

Company, Analysts Raise Estimates

After Hibbett Sports increased its full-year outlook, analysts quickly did the same. The Zacks Consensus Estimate for this year is up a dime, to $1.95 since the earnings news. Next year’s average projection is up 11 cents, to $2.21.

Last year Hibbett Sports made $1.60 per share, so the expected growth rates are now 22% and 13%, respectively.

Industry Comparisons

Hibbett is one of the top rated retailers and compared to the industry it is easy to see why. The ROE is 25.7%, more than twice the 10.7% its peers are averaging.

The company’s 7.4% net profit margin is well ahead of the 1.9% industry average.

The Chart

Below you can see the price and consensus chart, which plots the annual consensus estimates against the price for a 5 year period. While the earnings outlook had a hiccup a few months ago, you can see the solid annual growth trends.

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