Hibbett's Race Against Slowing Footwear Demand: Analyst Revises Price Target

Telsey Advisory Group analyst Cristina Fernández reiterated an Outperform rating on the shares of Hibbett, Inc. HIBB, lowering the price target to $70 from $80.
Hibbett is reporting 1Q earnings results before the markets open on Friday, May 26.
The analyst cautions that the company will likely be hurt by weakening demand for athletic footwear, given the consumer pullback and the need for greater promotions to clear inventory.
The company's recent promotional discount offers to drive traffic signal the sluggish demand cycle in the macroeconomy.
Based on the above, the analyst decreased forecasts of 1Q23 EPS to $2.85, down from $3.15.
The analyst forecasts an operating margin contraction of ~90 bps to 11.0% and a gross margin contraction of 145 bps to 35.5%.
On the positive side, the analyst says that Hibbett faces less competition in many of its markets and its product allocations have improved.
As a result, sales in the quarter to be reported is expected to jump 6.5% Y/Y to $451.6 million.
Also Read: Foot Locker's Issues Are 'Self-Inflicted': 3 Analysts Review Q1 Print
Price Action: HIBB shares are trading higher by 2.21% to $46.67 on the last check Tuesday.