Tough Launch Comparison Impacts Hibbett Sports (HIBB) 4Q Start; Canaccord Genuity Reiterates Hold

Canaccord Genuity maintained a Hold rating on Hibbett Sports (NASDAQ: HIBB), and cut the price target to $39.00 (from $45.00), following the company's 3Q earnings report. HIBB reported adjusted EPS of 74c vs. consensus of 67c. Q4 got off to a weak start with -LDD QTD comps, which were partly impacted by a tough launch comparison last year.

Analyst Camilo Lyon commented, "HIBB reported Q3 adjusted EPS of 74c vs. our 70c estimate (consensus was 67c). Relative to our model, the beat was a low quality one, driven by lower tax rate (+7c), lower depreciation expense (+2c), lower share count (+2c) and higher gross margin (+1c), partly offset by lower revenue (-3c) and higher expense deleverage (-6c). Comp growth of 0.6% was well below our 5% estimate as the benefit from a shift in tax free holidays into Q3 (+150bps impact) was offset by weakness in cold weather categories (-130bps impact). The strength in footwear (+HSD) was offset by the weakness in apparel (-MSD) and team sports (-LSD). Gross margin of 36.1% (-18bps) came in ahead of our 35.9% (-35bps) estimate, with flat product margin. SG&A deleveraged by ~100bps, due to weak comps. Despite the beat, Q3 was largely a poor quality quarter."

For an analyst ratings summary and ratings history on Hibbett Sports click here. For more ratings news on Hibbett Sports click here.

Shares of Hibbett Sports closed at $33.30 yesterday.

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