Shares of athletic apparel and footwear retailer Hibbett (NASDAQ:HIBB) jumped 12% in the morning session after the company reported third quarter results with revenue exceeding Wall Street's expectations, partly due to a small same-store sales beat. Much better margins and expense control led to EPS blowing past analysts' expectations. Management added that sales benefitted from a strong back-to-school season in the initial month of the quarter. Moving ahead, while same-store sales and net sales guidance for the full year were maintained, the company raised EPS guidance well above expectations based on a combination of expectations for lower operating expenses, lower interest expense, and a smaller number of shares outstanding. Zooming out, we think this was a very good quarter that should have most shareholders cheering.
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What is the market telling us:
Hibbett's shares are somewhat volatile and over the last year have had 24 moves greater than 5%. But moves this big are very rare even for Hibbett and that is indicating to us that this news had a significant impact on the market's perception of the business.
Hibbett is down 10.2% since the beginning of the year, and at $60.50 per share it is trading 17.5% below its 52-week high of $73.36 from January 2023. Investors who bought $1,000 worth of Hibbett's shares 5 years ago would now be looking at an investment worth $3,524.
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