Blog

Jul 31, 2023

Academy Sports’ Q2 Tops Wall Street Targets

Posted by SGB Media | Aug 31, 2023 | Apparel, Footwear, Outdoor, SGB Updates, Sports/Fitness, Update Academy Sports and Outdoors, Inc. reported second-quarter earnings came in just ahead of analyst

Posted by SGB Media | Aug 31, 2023 | Apparel, Footwear, Outdoor, SGB Updates, Sports/Fitness, Update

Academy Sports and Outdoors, Inc. reported second-quarter earnings came in just ahead of analyst expectations. Same-store sales declined 7.5 percent in the quarter but improved throughout the quarter. Academy reiterated its sales guidance while raising its EPS outlook due to share repurchases.

Adjusted EPS of $2.09 in the second quarter compared with Wall Street’s consensus estimate of $2.03. Sales were in line with Wall Street’s consensus estimate of $1.58 billion.

“As we continue to move through a challenging economic environment, our priority remains to deliver great value to our customers with our broad and complete assortment and our engaging shopping experience. While sales in the second quarter were down versus last year, they steadily improved each month during the quarter, while also delivering a solid earnings performance,” said Chief Executive Officer, Steve Lawrence. “The team is working hard on thoughtfully managing through our short-term challenges and remains focused on delivering against our long-range plan objectives. Moving forward, we believe that Academy is well-positioned to continue to capture market share as a leader in the sports and outdoor space. We are planting the seeds for future growth by opening 11-12 new stores this Fall, building out our omnichannel capabilities and expanding our portfolio of new and exciting brands that resonate with our core customer.”

Second-Quarter and Six Month’s PerformanceIn the quarter ended July 29, sales were $1.58 billion against $1,69 billion, representing a decline of 6.2 percent. Same-store sales were down 7.5 percent compared to a decline of 6.0 percent in the year-ago quarter.

Gross margins improved 30 basis points to 35.6 percent. SG&A expense increased 3.9 percent to $352.5 million, or to 22.3 percent of sales from 20.1 percent a year ago.

Net income declined 16.8 percent to $157.1 million, or $2.01 a share, from $188.8 million, or $2.22, a year ago. On an adjusted basis, profits were off 15.4 percent to $163.6 million, or $2.09 a share, from $193.5 million, or $2.28, a year ago.

In the six months, sales declined 6.0 percent to $2,966.7 million from $3,154.6 million. Same-store sales dropped 7.4 percent compared to a decline of 6.7 percent a year ago.

Net income fell 25.9 percent to $251.0 million, or $3.19 a share, from $338.6 million, or $3.90, a year ago. On an adjusted basis, earnings were down 22.9 percent to $266.6 million, or $3.39, from $346.0 million, or $3.99, a year ago.

Balance Sheet

Subsequent to the end of the second quarter, on August 30, 2023, Academy announced that its Board of Directors (“Board”) declared a quarterly cash dividend of $0.09 per share of common stock. The dividend is payable on October 11, 2023, to stockholders of record as of the close of business on September 13, 2023.

Michael Mullican, President, said, “In the second quarter we made significant progress in aligning our expenses with our current sales trends. Our operating margin improved 420 basis points from the first quarter, driven by higher gross margin, sequential improvement in shrink as a rate to sales and disciplined expense management. We also continued to execute our capital allocation plan in the quarter, while self-funding our long-term growth initiatives.”

New Store OpeningsDuring the second quarter, Academy opened one new store, bringing the total quarter-end number of stores to 270 stores. The retailer expects to open six stores in the third quarter and five to six in the fourth quarter and a total of 120-to-140 stores over the five fiscal year period ending with fiscal 2027.

2023 OutlookAcademy reiterated its previous sales and net income guidance for fiscal 2023 while updating its EPS forecast to reflect the share repurchase activity completed in the second quarter. The updated guidance calls for:

Photo courtesy Academy Sports + Outdoors

Share: