Hibbett Sports

Hibbett Sports - HIBB . NASDAQ

This is what I thought in September 2019 when I first bought the stock...

Hibbett Sports operates a chain of stores offering athletic footwear, apparel and sporting goods. They have 1,144 mid-sized stores spread across 35 states. Most of their stores are located in strip malls in smaller towns and cities. In November of 2018 they acquired City Gear, a smaller chain of footwear and apparel stores with a more urban focus. Without a lot of geographic overlap, they see strong potential in the new acquisition for synergies, savings and growth as they apply the best practices of their successful Hibbett brand to the new City Gear banner and expand it into new territories.

They have struggled over the last few years, like many US retailers. Earnings have been cut in half and the share price has fallen by 75%. But recent results are more encouraging and at the current share price of $15.49, the stock sports a low trailing p:e of 7 and a p:b ratio of just under 1. Trade war uncertainty has investors on the run as tariffs on footwear and apparel could hit this company hard. But if the company can weather this storm, the low valuation, coupled with a possible recovery in profit margins and/or an expansion of either of their two store banners, could combine to drive the stock price significantly higher.

What's changed since I made my first purchase of this stock? Follow the ongoing story in the posts below...

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