BofA Upgrades Hibbett Sports On Retailer's Pandemic Positioning

Athleisure and footwear retailer Hibbett Sports, Inc. HIBB boasts a strong omnichannel business that should translate to an accelerating market share gains amid the COVID-19 pandemic, according to BofA Securities.

The Hibbett Sports Analyst: Alexander Perry upgraded Hibbett Sports from Underperform to Buy with a price target lifted from $10 to $30.

The Hibbett Sports Thesis: Hibb's management deserves credit for recent omnichannel initiatives, Perry said in a Thursday upgrade note. (See his track record here.)

These include:

Curbside pickup.
A buy now, pay later option that accounts for 10% to 15% of digital sales.
New digital advertising campaigns that translated to customer traffic.

Recent signs of success include digital sales growth of 111% in the fiscal first quarter and data from SimilarWeb that points to ongoing momentum, the analyst said.

Specifically, web traffic looks to have grown from 43% in the fiscal first quarter to 133% quarter-to-date, he said.

Also, Hibbett Sports' app downloads are tracking higher by 400% quarter-to-date after growing 37% in the fiscal first quarter, Perry said.

Hibbett Sports stores are better positioned than mall-based rivals in offering customers a safer environment, the analyst said.

Around 77% of stores are located in a strip center or freestanding building, and this offers a superior social distancing shopping experience, he said.

The stores are also mostly located in less dense rural markets that have been less impacted by the pandemic.

Finally, Hibbett's product offers are just as compelling, as the company counts Nike Inc NKE as a key partner, Perry said, adding that Nike sales at Hibbett were up around 20% in 2019.

HIBB Price Action: Shares of Hibbett gained 10.59% to end Thursday's session at $22.98.

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