Interesting 4Q Comp Diversion

Interesting to see the varied trajectory of comp trends and guidance into 4Q for FL, DKS and HIBB. FL looking washed out, tho I’m starting to like HIBB a lot.

With Dick’s, Hibbett, and Foot Locker all reporting within 24 hours of one another, it was interesting to see the varied trajectory of com trends and guidance into 4Q. Let’s look through 4Q comp guidance on a 1-year basis for a minute. The implied 2-year trend for each company’s 4Q guidance shows that both DKS and HIBB are spot-on with their respective trajectories of -2%. My concern there is that both forecasts suggest a 100-200bp acceleration. FL, on the other hand, is looking for a 300bp deceleration. Yes, it will see a negative FX hit, but not enough to account for such a wide delta from its peers. One thing worth pointing out is that FL’s inventory position remains clean, as it is proactively managing inventories for the first time in at least 3 years from my vantage point.

If you asked me to put on my ‘gaming expectations’ hat, I’m probably going to look toward FL in the upcoming quarter – especially in the face of a 28% decline in the stock on Friday – a disproportionate move in the stock relative to the fundamentals.

Looking out over the next year, however, I’m starting to like HIBB – a lot. Stay tuned for more on that one…

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