What: Shares of sporting goods retailer Hibbett Sports (NASDAQ:HIBB) soared as much as 25% on Friday after its quarterly results and outlook topped Wall Street expectations.
So what: Hibbett shares have fallen sharply over the past six months on concerns over steadily slipping market share, but today's Q3 earnings beat -- EPS of $0.74 vs. the average analyst estimate of $0.68 -- coupled with upbeat full-year guidance is quickly easing some of those worries. While gross margin during the quarter slipped 20 basis points over the year-ago period, total revenue increased 4.6% and comparable-store sales edged up 0.6%, suggesting that management's merchandising initiatives are starting to gain traction.
Now what: Management now sees full-year 2016 EPS of $2.87-$2.94, above its prior view of $2.80-$2.90 and also the Wall Street consensus of $2.84. "Looking forward, we believe that our ongoing improvements in merchandise strategies, execution and replenishment capabilities have us well-positioned for the holiday season," said President and CEO Jeff Rosenthal. When you couple Hibbett's clear turnaround progress with the stock's still-reasonable forward P/E in the low-teens, there might even be plenty of room for the stock run.
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