ASO Stock Falls But Academy Sports Earnings Crush Views

Academy Sports & Outdoors (ASO) crushed earnings estimates for its fiscal second quarter and hiked guidance for the full year. But ASO stock fell below a buy point in early Thursday trade.

The sporting goods retailer also announced a $500 million share repurchase program over the next three years.




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Academy Sports Earnings

Estimates: Wall Street expected Academy Sports earnings of $1.46 per share, according to FactSet. There is no year-ago EPS number. Year over year, revenue was seen growing 3% to $1.658 billion.

Same-store sales were expected to rise 6.2%, down from Q1’s 38.9%.

Results: Academy Sports earnings rose 83% to $1.99 a share as revenue grew 11% to $1.792 billion, on the back of strong consumer demand across all its product categories. Comparable sales grew 11.4%, marking the eighth consecutive quarter of positive comparable sales. E-commerce sales fell 0.9%, after a 21% decline in Q1, with both quarters facing tough comps.

Outlook: For all of 2021, ASO now forecasts revenue of $6.465 billion-$6.620 billion. Analysts were expecting $6.153 billion, FactSet says. It see EPS of $5.45-$5.80. Analysts had targeted $4.69. The company sees comparable sales growing 14%-17%. Analysts were expecting 10.1%.

“Importantly, we continue to improve profitability at a higher rate than our sales growth. As a result, we are increasing our fiscal 2021 guidance,” CFO Michael Mullican said in a statement.

“Looking ahead, we expect to utilize our capabilities to accelerate our omnichannel, new store and other growth initiatives,” he added.

ASO Stock

Shares of Academy Sports & Outdoors lost 3.3% to 41.95 early on the stock market today. If the losses hold in the regular session, ASO stock would undercut a 42.85 buy point from a cup base that it cleared in late August, according to MarketSmith chart analysis. The base formed largely under the 10-week line, which is a negative. The buy range goes to 44.99.

Among other sporting goods retailers, Dicks Sporting Goods (DKS) and Big 5 Sporting (BGFV) were little changed before the open. Hibbett Sports (HIBB) rose 3% in light trade.

Last October, Academy Sports & Outdoors came public in a $1.1 billion initial public offering. The IPO priced at $13 per share, below range, although demand for sporting goods surged during the coronavirus pandemic. Americans stuck in homes sought out the outdoors and at-home leisure activities.

Meanwhile, ASO’s e-commerce sales boomed, as people shopped online from homes. And its stores stayed largely open under lockdowns, qualifying as essential retailers.

In Q1, ASO earnings surged to $1.89 a share from 1 cent a year ago, boosted by shoppers wielding stimulus checks. That helps ASO stock earn an unbeatable EPS Rating of 99 and a near-perfect Composite Rating of 98 from Investor’s Business Daily.

The private equity firm KKR bought Academy Sports in 2011. ASO sells footwear, apparel and gym supplies, as well as hunting, fishing, bicycling and camping gear.

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