Dicks Sporting Goods Inc (DKS), Hibbett Sports, Inc. (HIBB), Cabelas Inc (CAB): Is It Finally Time to Buy Sports Retail?

Page 1 of 2

Billionaire David Einhorn didn’t explicitly say “yes, now is the time to buy sports retailers.” Nonetheless, an industry leader got a big positive last week when Einhorn’s Greenlight Capital hedge fund announced it was closing out its short position on this stock.

(NYSE:DKS) is the sports and fitness specialty retailer that offers a range of sporting-goods equipment, apparel and footwear. Dick’s also owns Golf Galaxy, a golf specialty retailer.

Einhorn notes that the fear of Internet retail taking market share from Dicks Sporting Goods Inc (NYSE:DKS) has not come to fruition per his 2Q investor letter…

Dicks Sporting Goods Inc (NYSE:DKS) saw revenue up 12% in fiscal 2012 (ended January), and analysts expect a 7% rise for fiscal 2014 — namely driven by the opening of 40 new Dick’s stores and remodeling of another 80. As Einhorn mentioned, Dick’s reported EPS in the April-ended quarter of $0.48 compared to $0.45 for the same period last year.

But the news wasn’t all bad. Gross profit for 1Q was up 4% year-over-year and the gross margin expanded eight basis points to 30.8%. Operating income also increased 2% year-over-year. For full year 2013, the company reaffirmed its EPS guidance of $2.84 to $2.86.

Analysts still expect the sporting goods company to grow EPS at an annualized 15% over the next five years. Dicks Sporting Goods Inc (NYSE:DKS) also has a solid balance sheet and cash flow that should still be appealing to investors. The company carries over $100 million in cash and has no debt.

Top comp

Hibbett Sports, Inc. (NASDAQ:HIBB) is one of Dicks Sporting Goods Inc (NYSE:DKS) chief peers, with stores in small- and mid-sized markets primarily in the Southeast, Southwest, Mid-Atlantic and Midwest. Hibbett has 873 stores across 29 states. Hibbett’s ultimate goal is to have 1,300 stores across the U.S. in the long term.

Hibbett Sports, Inc. (NASDAQ:HIBB) is looking to open some 75 new stores in fiscal 2014, which should help drive the expected 6% rise in revenue. Hibbett focuses on towns with populations between 25,000 to 75,000, operating more as a “local” sports store. This also gives it a competitive advantage, where many rivals, such as Dick’s, tend to avoid these markets.

Much like Dick’s, Hibbett Sports, Inc. (NASDAQ:HIBB) a debt-free balance sheet. It had over $100 million in cash as of the end of 1Q. Recent news for Hibbett Sports, Inc. (NASDAQ:HIBB) includes its 2Q EPS of $1.00, below $1.07 consensus estimates. It appears the miss was largely due to a cooler-than-expected spring season. The company is maintaining its fiscal 2014 expectations of EPS between $2.85 and $3.05.

Niche operator

Cabelas Inc (NYSE:CAB) is a specialty retailer focusing on fishing, camping and related outdoor activities. The company has 37 retail stores in 24 states and three in Canada. Its stores account for two-thirds of sales, with its direct business (catalogs) and the Internet generating the remainder.

Analysts expect the company to grow revenue by an impressive 18% in 2013, after being up 11% in 2012. Second-quarter EPS was also robust, coming in at $0.62 versus $0.47 for the same period last year. The big driver of this was 10.5% growth in same-store sales, as sales of firearms/ammo were up noticeably.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Biggest Airports in the World

The 5 Most Gang Infested Cities In America

The 34 Smartest Countries in the World

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!