Editor's Note

Retailers of every shape and size are moving steadily higher. This one has a long way to go. Hibbett Sports suffered in late 2017 but that weakness is evaporating.



NEW BULLISH Plays

HIBB - Hibbett Sports - Company Profile

Hibbett Sports, Inc., together with its subsidiaries, operates athletic specialty stores in small and mid-sized markets primarily in the South, Southwest, Mid-Atlantic, and the Midwest regions of the United States. Its stores offer a range of merchandise, including athletic footwear, team sports equipment, athletic and fashion apparel, and related accessories. The company also sells merchandise directly to educational institutions and youth associations. As of January 28, 2017, it operated 1,059 Hibbett Sports stores and 19 Sports Additions athletic shoe stores. Hibbett Sports, Inc. was founded in 1945 and is based in Birmingham, Alabama. Company description from FinViz.com.

Earnings expected on Feb 16th.

Hibbett had a tough 2017 with shares crashing back to $10 on various problems including those created by Nike and Under Armour. The shoe and sports apparel business was very weak but that has turned around and even Nike is posting strong gains. Retailers in every sector are surging.

Last week Bank of America upgraded HIBB from underperform (sell) to a buy and hiked the price target from $14 to $30. The analyst said a successful launch of its ecommerce business and very easy comps for the next 12 months made Hibbett a buy.

The ecommerce launch at the beginning of last quarter added 5% to same store sales and helped eliminate a lot of aged inventory. They expect ecommerce to be accretive to 2018 earnings. The analyst also said it was providing sales from areas where Hibbett does not have stores and therefore was not cannibalizing sales at existing locations.

BAC said Hibbett had reallocated footwear space and styles for faster sales of Nike and Adidas products.

Hibbett has a healthy balance sheet, low PE, active buyback program and high short interest.

Buy HIBB shares, currently $26.10, initial stop loss $24.45.
Alternate position: Buy March $30 call, currently $1.40, initial stop loss $24.45.



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