Sporting Goods Rates a Fielder's Choice

The trick, it's said, is to keep your head when others all around you are losing theirs. Sporting-goods retailer Hibbett Sports (Nasdaq: HIBB) seems to have managed to do just that. While profits fell 2% in the quarter, missing analyst expectations, the regional outlet found same-store sales inching up, and it raised guidance for the coming year.

Contrast that with Dick's Sporting Goods (NYSE: DKS), which saw comps fall and was forced to slash its earnings outlook, or with Big 5 Sporting Goods (Nasdaq: BGFV), which saw profits tumble by nearly half.

The results seem to underscore the value of Hibbett's more diversified, national footprint. With more than 700 stores primarily serving the Southeast, Southwest, and mid-Atlantic region, Hibbett is nearly as large as both Dick's and Big 5 combined. And those two companies’ more regional concentration in areas hard-hit by the imploding housing market and economy has hurt their results. Big 5 has half of its stores in California, with others strewn throughout the Midwest, while Dick's has about a fifth of its stores in Ohio and Pennsylvania.

Another key to Hibbett's success has been locating its stores in strip malls that are typically anchored by a Wal-Mart (NYSE: WMT). The deep-discount retailer has benefitted during the recession as people seek to stretch their dollars as far as they can, and undoubtedly the overflow crowds that helped boost Wal-Mart's profits by nearly 10% this quarter trickled into Hibbett.

While Hibbett raised its 2009 forecast and plans to open an additional 75 stores, Dick’s cut its expectations for the rest of the year. It now says it will earn somewhere between $1.13 and $1.20 per share, compared to prior forecasts of $1.27 to $1.36 per share, and is slowing its expansion plans as it tries to weather the economic slowdown.

That's similar to the strategy Motley Fool Hidden Gems recommendation Cabela's (NYSE: CAB) has initiated. The purveyor of outdoor gear started off as a catalog retailer, but had been opening theme park-sized stores in recent years, making bricks-and-mortar outlets a growing component of overall revenues. However, it plans on opening only two new stores as it continues to shift in response to the gloomy market.

Even though Hibbett Sports' shares have been cut in half from their highs, it trades at a significant premium on future profits to Dick's, Big 5, and even Foot Locker (NYSE: FL), as well as on other measures of value such as price-to-sales and on its growth prospects relative to earnings. Of course, as a chain that's posting good results, it probably deserves the premium, and it may be worth a nibble by investors seeking to carve out a sporting chance in this wild market.

Related Foolishness:

• Hibbett Holds Steady for Quarter
• Cabela's Mountain of Problems
• No High-Fives in Sporting Goods