Revisiting Hibbett Sports ($HIBB)

Short-Term Pain for Long-Term Gain

In January 2022 I wrote an article about Hibbett Sports (HIBB) detailing why, although I did not consider this company as a “high quality” company, I did regard it as a solid one. This, combined with what I thought it was a low stock price, made me consider the opportunity as a pure value play. Since then the stock price has had a volatile behavior and now is trading at 2-years low (orange line in the chart below):

Looking at this chart we can observe that there are two clear winners (ASO & DKS) and three losers (HIBB, BGFV and SPWH) within the sector. The goal of this article is to understand the reasons behind this underperformance and, more importantly, if those reasons are structural or temporary. In other words, if the conclusion is that those reasons are temporary, could we consider that HIBB represents an interesting opportunity at the current prices? Let’s see.

Management’s Mistakes

When the…