Academy Sports & Outdoors Misses Results In First Quarter 2024

Academy Sports & Outdoor (Academy) sales in first quarter failed to meet expectations. Net sales decreased (1.4) % to $1,364.2. Net income was $76.5 million, a drop of (18.6%). This compared with Dick’s Sporting Good report of sales increase of 3.02 million a 6.2 increase, and net earnings of $275 million, a $(3.0) % decrease. Promotions were more convincing at Dick’s.

The company has many stress points. There are 15 -17 stores opening this year. It is causing supply line stress. Two stores opened in the first quarter, one has already opened in the third quarter and the balance will arrive in the second, third and some in the fourth quarter. As a counter-point, management indicated that there were savings in transportation and that theft was down. In addition, new stores reported positive sales gains and that omni-channel business reported positive gains.

Nonetheless, the company is facing a competitive environment with plan for holiday promotions to stimulate sales. The company cited promotions for Father’s Day, 4^th of July, Labor Day, Back to School days, Election Day, Thanksgiving, Christmas as major focus points for sales promotions. New management and new growth prospective add up to a tense environment. Every time senior management looks up, they see a new, unfamiliar face they must trust.

The company stayed with its financial annual forecast. It is staying with its sales forecast of $6.07 Billion to $6.35 billion. Diluted share forecast shifted from $6.05 to $7.05 to $5.90 to $6.90 It is a slight downward shift. Maybe management will see the wisdom not to give annual guidance until the second quarter,

This is a young management team It is challenged by the economic turmoil. New store openings are challenging and frightening. To stand up boldly in front of seasoned analysts is difficult.

POSTSCRIPT: Ken Hicks took over when this company was in its infancy. He reshaped the management team and laid out a growth plan that included 100 stores in the next five years. Sounds easy – until you sign off on the balance sheet. The company now has 285 stores and is likely to hit 300 this year. It was founded in 1938. There is great growth ahead.