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Can Hibbett (HIBB) Stay on Earnings Surprise Track in Q1?

Hibbett Sports Inc. HIBB is slated to report first-quarter fiscal 2017 results on May 20. In the last quarter, the company had delivered a positive earnings surprise of 1.3%.

Additionally, the company delivered an average positive earnings surprise of 1.4% in the trailing four quarters. Let’s see how things are shaping up for this announcement.



Factors Influencing This Quarter

Following the soft fourth-quarter fiscal 2016 sales results, the company remains encouraged by its merchandising initiatives and expects to gain from them in the spring season, which should benefit first quarter fiscal 2017 sales. Also, the company is confident of succeeding in its ongoing omni-channel initiative under the guidance of the recently appointed Vice President of Digital Commerce. Moreover, the company’s strong balance sheet bodes well as it provides the required financial flexibility to take up strategic endeavors such as expansion of store base.

However, the company provided a soft guidance for fiscal 2017 citing increased costs from its ongoing omni-channel initiatives, which will impact fiscal 2017 earnings by nearly 14–16 cents per share. The soft guidance makes us somewhat cautious about the upcoming results.

Earnings Whispers

Our proven model does not conclusively show that Hibbett is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:

Zacks ESP: Hibbett has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at $1.21.

Zacks Rank: Hibbett carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some companies you may want to consider as our model shows that these have the right combination of elements for an earnings beat:

Best Buy Co. Inc. BBY, scheduled to report earnings on May 24, has an Earnings ESP of +2.94% and a Zacks Rank #2 (Buy).

DSW Inc. DSW, scheduled to report earnings on May 24, has an Earnings ESP of +2.17% and a Zacks Rank #3 (Hold).

PVH Corp. PVH, scheduled to report earnings on May 25, has an Earnings ESP of +1.40% and a Zacks Rank #3.

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DSW INC CL-A (DSW): Free Stock Analysis Report
 
BEST BUY (BBY): Free Stock Analysis Report
 
HIBBET SPORTS (HIBB): Free Stock Analysis Report
 
PVH CORP (PVH): Free Stock Analysis Report
 
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