Hibbett, Inc. HIBB has been capitalizing on its e-commerce front and the expansion of the loyalty program. The company has also benefited from the seamless execution of its business strategies, demonstrating adeptness in navigating a challenging retail landscape. This strategic implementation has been instrumental in driving positive results.
Hibbett has achieved notable success by focusing on increasing its customer base through enhanced e-commerce efforts and selective store expansions. The company is effectively leveraging its omnichannel capabilities, which include home delivery, buy online and pick-up in-store, reserve online and pick-up in-store, buy online and shipping to store same-day delivery, and mobile app services. These initiatives have enabled Hibbett to fulfill online orders efficiently and better serve its customers.
Hibbett has experienced significant growth in its e-commerce sales, which increased by 13.4% in the first quarter of fiscal 2025. During this quarter, the company also saw a notable expansion of 210 basis points (bps) in its gross margin, reaching 35.8%. This improvement was driven by an increased average product margin of approximately 195 bps. Other favorable gross margin drivers included reductions in freight and shipping costs by about 50 bps, logistics expenses by 15 bps, and a 10-bp improvement in shrinkage.
Other Factors Contributing to Growth
Hibbett appears to be well-positioned with its loyalty program, supported by higher member engagement and increased average ticket growth due to rising average unit retail. The company has been enhancing its loyalty program through its partnership with Nike’s loyalty program. This collaboration will further distinguish Hibbett's retail experience, allowing customers to sign up as connected members in-store or online.
The company stands to benefit from its smooth execution of strategies, helping it win market share. It is known for its exceptional customer service, leading omnichannel shopping experience, solid vendor partnerships, and strategic placement in underserved markets. The footwear category, particularly basketball, lifestyle and running styles, has been a major growth contributor.
Hibbett continues to gain from consistent product launches, which is positively received by its loyal customer base. Furthermore, the partnership with Nike, integrating their loyalty programs, provides exclusive experiences and enhances Hibbett’s competitive edge.
Moreover, HIBB’s dedication to comprehensive inventory management was evident in its first-quarter fiscal 2025 results. Management considers the store expansion strategy a key growth catalyst. The company continues to invest in new store openings, remodels, technology improvements and infrastructure.
Unlocking its Value
On Apr 23, 2024, Hibbett entered into a definitive agreement to be acquired by a subsidiary of JD Sports Fashion plc. This transaction is anticipated to deliver immediate, certain, and substantial value for Hibbett's stockholders. Notably, the acquisition aims to maintain Hibbett's brand integrity and ensure continuity in serving its customers and communities, which have always been central to Hibbett's business focus.
The acquisition by JD Sports Fashion plc's subsidiary has had a notable impact on this Zacks Rank #3 (Hold) stock’s performance, with shares rising 23.4% in the past three months. This growth outpaced the industry's increase of 18.3%, reflecting positive investor sentiment and anticipation surrounding the acquisition.
Image Source: Zacks Investment Research
Final Thoughts
Hibbett continues to navigate persistent challenges, including inflation and market volatility. Potential investors should exercise caution given the intense competition from larger sporting goods retailers.
3 Picks You Can’t Miss
We have highlighted three better-ranked stocks, namely, Abercrombie & Fitch Co. ANF, The Gap Inc. GPS and DICK'S Sporting Goods DKS.
Abercrombie & Fitch, a specialty retailer of premium, high-quality casual apparel, currently sports a Zacks Rank #1 (Strong Buy). ANF has a trailing four-quarter average earnings surprise of 210.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales and earnings indicates growth of 10.4% and 47.3%, respectively, from the year-ago figures.
Gap, a fashion retailer of apparel and accessories, currently flaunts a Zacks Rank #1. GPS has a trailing four-quarter earnings surprise of 202.7%, on average.
The Zacks Consensus Estimate for Gap’s current financial-year sales and earnings per share suggests a rise of 0.2% and 21.7%, respectively, from the year-earlier levels.
DICK'S Sporting operates as an omni-channel sporting goods retailer. It currently carries a Zacks Rank #2 (Buy). DKS has a trailing four-quarter earnings surprise of 4.7%, on average.
The Zacks Consensus Estimate for DICK’S Sporting’s current fiscal-year sales and earnings implies an improvement of 1.8% and 6.6%, respectively, from the prior-year numbers.
Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
The Gap, Inc. (GPS) : Free Stock Analysis Report
DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
Hibbett, Inc. (HIBB) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
