Hibbett Inc shares tanked 20% on Friday: this might be why

Hibbett Inc (NASDAQ: HIBB) reported market-beating Q3 results and gave strong guidance for the future on Friday. Shares jumped in premarket but tanked nearly 20% on open, probably as shareholders focused on BofA that downgraded the stock to “neutral”.

BofA analyst slashed his price target for HIBB

Cutting his price target for HIBB to $88, BofA Securities’ Alexander Perry wrote in a note to clients:

It is noteworthy, however, that Perry’s bearish call came before the earnings report, and his price target still marked a 20% upside from where the stock closed on Thursday.

Q3 financial performance

Hibbett reported $25.2 million in net income ($1.68 per share) versus the year-ago figure of $25.3 million ($1.47 per share). At $381.7 million, sales were up 15.2%. According to FactSet, experts had forecast $1.62 of EPS on $360 million in sales.

Comparable sales also jumped 13% in the recent quarter versus 5.2% expected. In the earnings press release, CEO Mike Longo confirmed that the sporting goods retailer was well-positioned for the holiday season after a material improvement in inventory despite supply chain issues in Q3.  

Guidance for the future

Hibbett now forecasts up to $11.90 in per-share earnings this year, including $1.85 to $2.05 it expects in Q4. In comparison, analysts were calling for $1.76 of EPS this quarter and $11.41 for the full financial year.

The U.S. firm expects a little under 10% growth in fourth-quarter same-store sales and a little under 20% for the year.