We maintain our Outperform recommendation on Hibbett Sports (HIBB) as we anticipate it to perform well above the market. Its sharp focus towards mid-sized and smaller markets and a strategic mix of branded as well as localized merchandise provide an edge over its rivals in a highly competitive specialty retail industry.

Hibbett’s management is also committed towards expanding its store network in fiscal 2011. Moreover, the company’s debt-free balance sheet and full availability under credit facilities bode well for future operating performance.

While macroeconomic headwinds may continue to affect the U.S. discretionary spending environment and limit the above-market performance of the company, our long-term Outperform recommendation on the stock indicates that it would perform well above the market. Our target price of $30.00, 23.3X 2011 EPS, reflects this view.Zacks Investment Research