Hibbett Sports Upgraded by Susquehanna, PT Hiked to $25
Photo Credit: company website
Hibbett Sports is immune to the downfall of malls, according to Susquehanna. Analyst Sam Poser notes Hibbett Sports is largely protected from the declining health of malls, giving the retailer a distinct advantage over competitors. The firm upgraded Hibbett Sports to POSITIVE from NEUTRAL and raised its price target to $25 from $14 on Wednesday morning.
Investments in digital paying off: Same store sales of -19.5% for the latest quarter compare to the consensus estimate of -34.0%. Brick-&-Mortar fell about 34%, but e-commerce increased 110.5%.
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.
HIBB stores operated during only ~60% of available days in 1Q21.
Small Box advantage: On the company’ earning call, management highlighted several reasons it thinks it is better positioned to adapt to post-COVID-19 conditions than larger rivals are.
“at the top of the list is we have limited exposure to malls.”
“we are a small box retailer, which means we just have fewer people in our store at any given time.”
“we have limited exposure to the largest metropolitan areas in the country, which as you know, have been the hardest hit in the last few months.”
Reason for caution: Despite its several advantages, Hibbett Sports is still vulnerable to negative trends impacting retail and apparel. In a recent report, Moody’s said apparel and footwear retailers are being hit with a “sector-wide shock that will reverberate into 2021.” Moody’s estimates 2021 revenue levels for apparel retailers will remain 5% to 10% below their 2019 levels.
