Academy Sports Stock Soars on Earnings Beat and Improved Outlook

Shares of Academy Sports and Outdoors Inc. are soaring in Tuesday premarket trading following the release of stellar first-quarter earnings and a raised outlook for the fiscal year.

For the three months ended May 1, the retailer posted an adjusted income of $182.5 million, or adjusted earnings of $1.89, versus the prior year’s adjusted income of $400,000, or adjusted earnings of 1 cent per share. Wall Street had predicted earnings of 84 cents. Revenues advanced 39.1% to $1.58 billion, compared with consensus bets of $1.51 billion.

Just before 9 a.m. ET, ASO stock was up 8.5% to $40.99.

In a statement, chairman, president and CEO Ken Hicks said that both sales and profits were “record-breaking” for the quarter. Comps increased 38.9%, and the company noted double-digit demand across all of its product categories, particularly in apparel, footwear and team sports merchandise.

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“The strategic initiatives implemented over the last few years, a shift in consumer spending into sports and outdoor categories, government-issued stimulus checks, the addition of new customers and more frequent shopping by existing customers are driving consistent growth,” Hicks added. “We believe our broad, value-based assortment — available through a true omnichannel experience — positions us to continue to capitalize on these market trends.”

While e-commerce declined 21%, Academy contrasted the performance to that of the first quarter in 2020, when it recorded triple-digit growth as consumers shifted to digital channels at the onset of the COVID-19 health crisis. Over the past two years, online sales at the chain have improved 300% during the first quarter.

Although uncertainties remain as the pandemic drags on, the Texas-based sporting goods store raised its forecast for 2021: It anticipated comps to spike in the range of 6% to 9%, versus the previous outlook of comps between a 2% drop and a 2% gain. Net income is now projected in the range of $400 million to $435 million, with diluted earnings per share of $4.15 to $4.50, compared with the prior guidance of $265 million to $290 million in income and $2.70 to $2.95 in diluted EPS.

At the end of the period, Academy had cash and equivalents totaling $593.3 million, with no amounts drawn on its credit facility. Its stock has climbed more than 78% in the year to date.