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Hibbett (HIBB) Faces Soft Demand: Can It Beat on Q1 Earnings?
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Hibbett, Inc. (HIBB - Free Report) is likely to witness year-over-year declines in its top and bottom lines when it reports first-quarter fiscal 2025 results on Jun 5. The Zacks Consensus Estimate for revenues is pegged at $449.5 million, indicating a decline of 1.3% from the prior-year quarter’s reported figure.
For the fiscal first quarter, the consensus estimate for earnings has been unchanged in the past 30 days at $2.68. However, the consensus mark indicates a decline of 2.2% from that reported in the prior-year period.
Hibbett, which engages in the retail of athletic-inspired fashion products, has delivered a trailing four-quarter earnings surprise of 24.5%, on average. HIBB’s earnings missed the Zacks Consensus Estimate by 0.4% in the last reported quarter.
Hibbett’s first-quarter fiscal 2025 results are expected to reflect continued headwinds from muted discretionary spending due to inflation, which has been affecting consumer sentiments. In addition, the company's apparel business has been witnessing soft demand as the category has continued to be affected by higher promotions due to the elevated inventories.
On the last reported quarter’s earnings call, management anticipated various business and economic challenges witnessed in fiscal 2024 to persist in fiscal 2025, which is expected to hurt top and bottom-line performances in first-quarter fiscal 2025. These challenges include the potential for inflation and elevated interest rates, continued use of promotional activity to drive traffic, wage pressures, a more cautious and selective consumer and ongoing geopolitical conflicts.
Hibbett’s higher promotional activity across footwear and apparel categories have been resulting in a lower average product margin, weighing on the gross margin rate.
For the first quarter of fiscal 2025, we expect the adverse average product margin and store occupancy costs to hurt the gross margin. This is likely to be partly offset by improved freight, shipping, logistics costs and shrink. Our model predicts a gross margin of 34.1% for first-quarter fiscal 2025, suggesting 40-bps growth from the year-ago quarter’s actual.
HIBB has been witnessing elevated inventory due to product cost inflation and an unfavorable mix. Hibbett has been reeling under higher costs for essential items like food, utilities and gas, resulting in reduced discretionary spending. Persistent inflation has continued to affect consumer sentiment and spending patterns, which, in turn, led to increases in operating costs, including higher wages, and prices for various goods and services.
We expect store operating, selling and administrative expenses, as a percentage of sales, to increase 100 bps year over year in the fiscal first quarter. This is likely to have been driven by inflationary impacts on store wages and related benefit costs, a growing store base, and higher data processing costs related to the ongoing investment in cloud-based back-office systems and technology.
Our model predicts an adjusted operating margin of 9.3% for the fiscal first quarter, down 80 bps from the year-ago quarter’s actual.
However, Hibbett has been making significant progress on the e-commerce front and expansion of the loyalty program. It remains focused on increasing its customer base by connecting with more customers through e-commerce and selective store expansion. This is expected to have boosted its top and bottom-line performances for the fiscal first quarter. The company has been focused on its store growth plan and improved product assortment to attract consumers.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Hibbett this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Hibbett has an Earnings ESP of 0.00% and currently has a Zacks Rank #4 (Sell).
Stocks With the Favorable Combination
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Bath & Body Works, Inc. (BBWI - Free Report) currently has an Earnings ESP of +4.15% and a Zacks Rank of 2. The company is likely to register a decline in the top line when it reports first-quarter fiscal 2024 results. The consensus mark for BBWI’s quarterly revenues is pegged at $1.4 billion, which suggests a decline of 2.1% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BBWI’s earnings has moved up by a penny to 33 cents per share in the past 30 days. The consensus estimate indicates flat year-over-year earnings.
The Kroger Co. (KR - Free Report) currently has an Earnings ESP of +0.83% and a Zacks Rank of 3. The company is likely to register top- and bottom-line declines when it reports first-quarter fiscal 2024 results. The consensus mark for KR’s quarterly revenues is pegged at $45 billion, which suggests a decline of 0.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Kroger’s earnings has been unchanged at $1.33 per share in the past 30 days. The consensus estimate indicates a decline of 11.9% from the year-ago quarter’s actual.
lululemon athletica (LULU - Free Report) presently has an Earnings ESP of +0.16% and a Zacks Rank #3. The company is likely to register growth in the top and bottom lines when it reports first-quarter fiscal 2024 results. The consensus mark for LULU’s quarterly revenues is pegged at $2.2 billion, which suggests 9.9% growth from the figure reported in the prior-year quarter.
The consensus mark for LULU’s quarterly earnings has been unchanged in the past 30 days at $2.39 per share. The consensus estimate suggests growth of 4.8% from the year-ago quarter’s actual.
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Hibbett (HIBB) Faces Soft Demand: Can It Beat on Q1 Earnings?
Hibbett, Inc. (HIBB - Free Report) is likely to witness year-over-year declines in its top and bottom lines when it reports first-quarter fiscal 2025 results on Jun 5. The Zacks Consensus Estimate for revenues is pegged at $449.5 million, indicating a decline of 1.3% from the prior-year quarter’s reported figure.
For the fiscal first quarter, the consensus estimate for earnings has been unchanged in the past 30 days at $2.68. However, the consensus mark indicates a decline of 2.2% from that reported in the prior-year period.
Hibbett, which engages in the retail of athletic-inspired fashion products, has delivered a trailing four-quarter earnings surprise of 24.5%, on average. HIBB’s earnings missed the Zacks Consensus Estimate by 0.4% in the last reported quarter.
Hibbett, Inc. Price and EPS Surprise
Hibbett, Inc. price-eps-surprise | Hibbett, Inc. Quote
Key Factors to Consider
Hibbett’s first-quarter fiscal 2025 results are expected to reflect continued headwinds from muted discretionary spending due to inflation, which has been affecting consumer sentiments. In addition, the company's apparel business has been witnessing soft demand as the category has continued to be affected by higher promotions due to the elevated inventories.
On the last reported quarter’s earnings call, management anticipated various business and economic challenges witnessed in fiscal 2024 to persist in fiscal 2025, which is expected to hurt top and bottom-line performances in first-quarter fiscal 2025. These challenges include the potential for inflation and elevated interest rates, continued use of promotional activity to drive traffic, wage pressures, a more cautious and selective consumer and ongoing geopolitical conflicts.
Hibbett’s higher promotional activity across footwear and apparel categories have been resulting in a lower average product margin, weighing on the gross margin rate.
For the first quarter of fiscal 2025, we expect the adverse average product margin and store occupancy costs to hurt the gross margin. This is likely to be partly offset by improved freight, shipping, logistics costs and shrink. Our model predicts a gross margin of 34.1% for first-quarter fiscal 2025, suggesting 40-bps growth from the year-ago quarter’s actual.
HIBB has been witnessing elevated inventory due to product cost inflation and an unfavorable mix. Hibbett has been reeling under higher costs for essential items like food, utilities and gas, resulting in reduced discretionary spending. Persistent inflation has continued to affect consumer sentiment and spending patterns, which, in turn, led to increases in operating costs, including higher wages, and prices for various goods and services.
We expect store operating, selling and administrative expenses, as a percentage of sales, to increase 100 bps year over year in the fiscal first quarter. This is likely to have been driven by inflationary impacts on store wages and related benefit costs, a growing store base, and higher data processing costs related to the ongoing investment in cloud-based back-office systems and technology.
Our model predicts an adjusted operating margin of 9.3% for the fiscal first quarter, down 80 bps from the year-ago quarter’s actual.
However, Hibbett has been making significant progress on the e-commerce front and expansion of the loyalty program. It remains focused on increasing its customer base by connecting with more customers through e-commerce and selective store expansion. This is expected to have boosted its top and bottom-line performances for the fiscal first quarter. The company has been focused on its store growth plan and improved product assortment to attract consumers.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Hibbett this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Hibbett has an Earnings ESP of 0.00% and currently has a Zacks Rank #4 (Sell).
Stocks With the Favorable Combination
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Bath & Body Works, Inc. (BBWI - Free Report) currently has an Earnings ESP of +4.15% and a Zacks Rank of 2. The company is likely to register a decline in the top line when it reports first-quarter fiscal 2024 results. The consensus mark for BBWI’s quarterly revenues is pegged at $1.4 billion, which suggests a decline of 2.1% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BBWI’s earnings has moved up by a penny to 33 cents per share in the past 30 days. The consensus estimate indicates flat year-over-year earnings.
The Kroger Co. (KR - Free Report) currently has an Earnings ESP of +0.83% and a Zacks Rank of 3. The company is likely to register top- and bottom-line declines when it reports first-quarter fiscal 2024 results. The consensus mark for KR’s quarterly revenues is pegged at $45 billion, which suggests a decline of 0.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Kroger’s earnings has been unchanged at $1.33 per share in the past 30 days. The consensus estimate indicates a decline of 11.9% from the year-ago quarter’s actual.
lululemon athletica (LULU - Free Report) presently has an Earnings ESP of +0.16% and a Zacks Rank #3. The company is likely to register growth in the top and bottom lines when it reports first-quarter fiscal 2024 results. The consensus mark for LULU’s quarterly revenues is pegged at $2.2 billion, which suggests 9.9% growth from the figure reported in the prior-year quarter.
The consensus mark for LULU’s quarterly earnings has been unchanged in the past 30 days at $2.39 per share. The consensus estimate suggests growth of 4.8% from the year-ago quarter’s actual.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.