We are changing our recommendation on Hibbett Sports (HIBB) from Neutral to Outperform as we anticipate it to perform well above the market. Hibbett’s sharp focus towards midsized and smaller markets and strategic mix of branded as well as localized merchandise provide an edge over rivals in a highly competitive specialty retail industry.
Hibbett’s management is also committed towards expanding the store network and keeping a strict control over expenses, which drove performance during the third quarter of fiscal 2010. Moreover, the company’s debt-free balance sheet and full availability under credit facilities bode well for future operating performance.
However, macroeconomic headwinds may continue to affect the U.S. discretionary spending environment and limit the above-market performance of the company.Zacks Investment Research
