Academy Sports Sees ‘Challenged’ Q2, Lowers Yearly Guidance
Academy Sports and Outdoors lowered its fiscal 2024 guidance after reporting that sales were “more challenged than expected” in the second quarter.
The Katy, Texas-based retailer reported that net sales decreased 2.2 percent in the second quarter to $1.55 billion, down from $1.58 billion the same time last year. Net income in the period was $142.6 million, a 9.2 percent decline from $157.1 million in Q2 2023.
Academy said that it opened three stores through the first two fiscal quarters and plans to open a total of 15 to 17 stores in 2024.
Steve Lawrence, chief executive officer of Academy Sports, said in a statement on Tuesday that the company continues to make progress against its strategic initiatives demonstrated by the opening of nine new stores this upcoming quarter, new omni-channel enhancements, such as Door Dash, and leveraging customer excitement around the launch of its new loyalty program.
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“For the remainder of the year, we will focus on increasing traffic and conversion for our stores and website, by leveraging our improved targeted marketing capabilities, and expanding our new loyalty program,” Lawrence said. “We will also continue to use our strong cash generation to fund the investments that will drive our long-term growth and increase shareholder value.”
As far as the company’s footwear business, Lawrence told analysts on Tuesday’s earnings call, that footwear was the “best performing division” in the period, with sales increasing 1 percent over last year.
“Kids and athletic were outperformed for the quarter, driven by increases in leading active brands such as Nike, Brooks, Asics and New Balance,” the CEO noted. “Work footwear was also a key contributor with strong sales in Ariat and Wolverine. We’re also pleased with the momentum we’re seeing in our casual business driven Birkenstock, Crocs and Skechers.”
Looking ahead, the company is lowering its guidance for fiscal 2024. As such, Academy now expects net sales for the year between $5.89 billion and $6.07 billion, which ranges from a 4.3 percent loss to a 1.4 percent loss for the year. This is down from the company’s previous guidance, which called for net sales between $6.07 billion and $6.35 billion, which ranges from a 1.5 percent loss to a 3 percent gain for the year.
“Sales for the second quarter were more challenging than expected, impacted by a tough economy, a temporary distribution center backlog related to going live with a new warehouse management system and by a very active storm season across key portions of our footprint,” Carl Ford, chief financial officer at Academy Sports, added in a statement. “We will continue to manage expenses and inventory levels as we focus on driving topline growth. We have a very healthy balance sheet and top quartile cash flow generation, which we will deploy towards our capital allocation strategy.”
