Core Insights - The article emphasizes the importance of thorough research and understanding of businesses before making investment decisions [1][2][3] Group 1: Company Insights - The author has a beneficial long position in ASO shares, indicating confidence in the company's future performance [2] - The focus is on identifying and developing deep knowledge of great businesses, which suggests a strategic approach to investment [1] Group 2: Industry Insights - The article highlights the role of individual investors in the stock market and the need for education in investing [1] - It mentions that past performance is not indicative of future results, which is a common consideration in investment analysis [3]

Core Viewpoint - Academy Sports and Outdoors, Inc. (NASDAQ: ASO) is given a hold rating due to concerns about the near-term outlook despite positive execution in store expansion, premium brand partnerships, and traction with higher-income customers [1] Group 1: Company Performance - The company shows encouraging execution on store expansion and premium brand partnerships [1] - There is a noted increase in traction with higher-income customers [1] Group 2: Market Challenges - Weakness is observed among core lower-income consumers, which poses a risk to the company's performance [1] - Inventory risks and macroeconomic uncertainties are highlighted as significant concerns for the company [1]

Group 1 - The article emphasizes the importance of making contrarian bets based on macro views and stock-specific turnaround stories to achieve outsized returns with a favorable risk/reward profile [1] - The author has over fifteen years of experience in the investment field, focusing on identifying potential investment opportunities [1] Group 2 - There is a disclosure stating that the author has no current stock or derivative positions in any mentioned companies and has no plans to initiate any such positions in the near future [2] - The article does not provide specific investment recommendations or advice, highlighting that past performance is not indicative of future results [2]

Group 1 - The core viewpoint is that Truist Securities analyst Joseph Civello maintains a Hold rating on Academy Sports and Outdoors, Inc. while raising the price forecast from $45 to $47, indicating a conflict between the company's successful transformation and ongoing macroeconomic pressures on its middle-income demographic [1][7]. - The analyst acknowledges operational improvements since 2019 but expresses caution regarding the prolonged suppression of consumer demand due to the challenging economic climate [2][8]. - Academy Sports reported quarterly adjusted earnings per share of 76 cents, missing the analyst consensus estimate of 90 cents, and net sales of $1.35 billion, which also fell short of the expected $1.37 billion [3][8]. Group 2 - The first-quarter sales for Academy Sports experienced a slight decline of 0.9%, with comparable sales falling by 3.7% [3]. - Despite the success of expanded Nike and new Jordan collections, overall traffic fell mid-single digits in the first quarter, and May comparable sales declined low-single digits due to a volatile macro environment [4][8]. - The analyst projects FY25 earnings per share to be $6.00 and has lowered the FY26 earnings estimate from $6.80 to $6.60 [8].

Sales Performance - For the first quarter of 2025, the company reported a comparable sales decrease of 3.7%, an improvement from a 5.7% decline in the same quarter of 2024[83] - Net sales decreased by $12.8 million, or 0.9%, in Q1 2025 compared to Q1 2024, primarily due to decreased comparable sales[98] - Comparable sales decreased by 3.7%, driven by a 5.2% decrease in comparable transactions, partially offset by a 1.5% increase in average ticket[100] Store Operations - The company operated 303 stores as of May 3, 2025, an increase from 284 stores at the end of the prior year quarter, with 5 new stores opened during the current quarter[78] - The company opened 5 new stores in Q1 2025, contributing $45.3 million to net sales, with a total of 19 new stores opened since Q1 2024[99] - The average store size is approximately 70,000 gross square feet, with locations primarily in the southern United States[77] Financial Performance - Adjusted EBITDA for the thirteen weeks ended May 3, 2025, was $109,764, compared to $142,578 for the same period in 2024, reflecting a decrease of approximately 23%[112] - Adjusted Net Income for the thirteen weeks ended May 3, 2025, was $51,597, down from $81,620 in the prior year, representing a decline of about 37%[114] - Adjusted Earnings per Share (EPS) for the first quarter of 2025 was $0.76 (diluted), compared to $1.08 in the same quarter of 2024, a decrease of approximately 30%[114] Cost and Expenses - Selling, general and administrative (SG&A) expenses rose by $36.2 million, or 10.2%, to $389.6 million in Q1 2025, primarily due to strategic investments in new stores and technology[103] - SG&A expenses as a percentage of sales increased from 25.9% in Q1 2024 to 28.8% in Q1 2025[95] - Interest expense decreased by $0.4 million, or 4.7%, in Q1 2025 compared to Q1 2024, primarily due to lower interest rates[105] Cash Flow and Capital Expenditures - Net cash provided by operating activities for the thirteen weeks ended May 3, 2025, was $157,472, down from $199,677 in the prior year, indicating a decline of about 21%[116] - Capital expenditures for the thirteen weeks ended May 3, 2025, totaled $50,830,000, an increase of 57.5% compared to $32,227,000 for the same period in 2024[129] - Cash used in investing activities rose by $18.6 million, from $32,355,000 in Q1 2024 to $50,988,000 in Q1 2025, primarily due to increased spending on corporate and IT programs[132] Supply Chain and Product Strategy - The product assortment for the first quarter of 2025 included outdoor (28%), sports (26%), recreation (24%), and apparel (22%) categories, reflecting a diverse range of offerings[75] - The company reduced its cost exposure to products imported from China to approximately 9% of total cost of goods sold for its private label business, aiming to diversify its global supply chain[79] - The company emphasizes a localized merchandising strategy to connect with a broad range of consumers, tailoring offerings to regional preferences[75] Shareholder Returns and Debt - The company approved a new share repurchase program allowing for the purchase of up to $700 million of its outstanding shares, with $536.5 million remaining for repurchases as of May 3, 2025[125] - The company declared a quarterly cash dividend of $0.13 per share for the fiscal quarter ended May 3, 2025, totaling $8,716 paid on March 25, 2025[128] - The company has a total long-term debt obligation of $103,994 for 2025, with significant payments due in 2027 amounting to $424,000[118] Economic and Market Conditions - The company monitors macroeconomic trends, including inflation and tariffs, which could impact consumer spending and sales growth[79] - The company is focused on enhancing its omnichannel capabilities, integrating e-commerce with physical stores to drive operational efficiencies[77] - E-commerce net sales represented 10.0% of merchandise sales in Q1 2025, up from 9.0% in Q1 2024[101]

Financial Performance - Net sales for Q1 2025 were $135 billion, a decrease of 09% year-over-year[29] - Comparable sales decreased by 37%[29] - Gross margin was 340%[29] - GAAP EPS was $068, while adjusted EPS was $076[29] Growth and Expansion - Academy Sports + Outdoors operates 303 stores across 21 states[9] - The company opened 5 new stores in Q1 2025[12, 29] - The company plans to open 20-25 new stores in 2025[12] - Year One Sales target for new stores is $12 million - $16 million, with a spend of $4 million - $5 million per store[14] Revised Fiscal 2025 Guidance - Net sales are projected to be between $597 billion and $6265 billion[38] - Comparable sales are expected to range from -40% to 10%[38] - Adjusted earnings per common share, diluted, are projected to be between $545 and $625[38]

分组1 - Academy Sports and Outdoors, Inc. reported quarterly earnings of $0.76 per share, missing the Zacks Consensus Estimate of $0.91 per share, and down from $1.08 per share a year ago, representing an earnings surprise of -16.48% [1] - The company posted revenues of $1.35 billion for the quarter ended April 2025, missing the Zacks Consensus Estimate by 1.37%, and compared to year-ago revenues of $1.36 billion [2] - The stock has underperformed the market, losing about 22.9% since the beginning of the year, while the S&P 500 gained 2.1% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $2.14 on revenues of $1.63 billion, and for the current fiscal year, it is $6 on revenues of $6.15 billion [7] - The Leisure and Recreation Products industry, to which Academy Sports and Outdoors belongs, is currently in the bottom 22% of the Zacks Industry Rank, indicating potential underperformance compared to higher-ranked industries [8] - The estimate revisions trend for Academy Sports and Outdoors is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6]

Financial Data and Key Metrics Changes - Net sales for Q1 fiscal 2025 were $1,350 million, down 0.9% year-over-year, resulting in a negative 3.7% comparable sales (comp) [13][26] - Operating income was $69.3 million, with diluted EPS at $0.68 and adjusted EPS at $0.76 [30] - Gross margin improved to 34%, a 60 basis point increase from the previous year, driven by merchandise margin expansion and favorable shrink [28][29] Business Line Data and Key Metrics Changes - Footwear and apparel were the strongest categories, remaining roughly flat year-over-year, while sports and recreation also showed improvement [14][26] - Athletic footwear posted a positive 4.5% comp, led by brands like Nike and Brooks, while the Jordan brand exceeded internal expectations [27][19] - Outdoor category faced challenges, particularly in ammunition sales, but fishing and firearms showed solid increases [14][28] Market Data and Key Metrics Changes - The company observed increased foot traffic from customers with household incomes over $100,000, indicating a shift towards value-seeking behavior among higher-income consumers [12][37] - E-commerce sales increased by 10% for the quarter, with penetration growing to over 10% [17][26] Company Strategy and Development Direction - The company is focused on new store expansion, planning to open 20 to 25 new stores in fiscal 2025, with five locations opened in Q1 [15][16] - E-commerce growth is a key pillar, with efforts to enhance the online shopping experience and expand product offerings [17][18] - The company is leveraging technology, including RFID and handheld devices, to improve inventory accuracy and customer experience [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about navigating tariff impacts and consumer behavior, emphasizing the importance of value in a challenging economic environment [7][25] - The company is adjusting its guidance to account for various tariff scenarios, with sales expectations ranging from $5.97 billion to $6.26 billion [35][36] - Management noted the fragility of the U.S. consumer environment but remains confident in long-term growth strategies [24][25] Other Important Information - The company returned over $100 million of free cash flow to investors in Q1, including share repurchases and dividends [34] - Strategic actions taken to mitigate tariff impacts included pulling forward $85 million in domestic inventory receipts at pre-tariff prices [31][32] Q&A Session Summary Question: Retention of higher-income consumers - Management noted that retention among higher-income consumers has been strong, with these customers shopping more frequently across various product categories [41][42] Question: Performance in May and impact of Jordan brand - Management indicated that while May showed a slight decline, the Jordan brand continues to perform well, and they remain optimistic about Q2 due to upcoming shopping events [45][46] Question: Health of the consumer and impact of weather - Management attributed softness in certain categories to weather conditions and noted that consumer behavior is cautious, with a focus on value [52][53] Question: Tariff outlook for fiscal 2026 - Management emphasized the importance of diversifying sourcing to mitigate future tariff impacts, but refrained from speculating on specific outcomes [80][81] Question: Gross margin guidance - Management explained that gross margin guidance remains unchanged due to effective inventory management and partnerships with suppliers to mitigate cost increases [56][63]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $1,350 million, down 0.9% year-over-year, resulting in a negative 3.7% comparable sales (comp) [11][25] - Operating income was $69.3 million, with diluted EPS at $0.68 and adjusted EPS at $0.76 [30] - Gross margin improved to 34%, a 60 basis point increase from the previous year, driven by merchandise margin expansion [28][29] Business Line Data and Key Metrics Changes - Footwear and apparel were the strongest categories, with athletic footwear posting a positive 4.5% comp, driven by brands like Nike and Brooks [26][27] - Outdoor category saw low single-digit declines primarily due to softer sales in ammunition, while fishing and firearms performed well [12][28] - E-commerce channel experienced a positive 10% comp for the quarter, with significant contributions from the Jordan brand [25][16] Market Data and Key Metrics Changes - Increased foot traffic from customers with household incomes over $100,000, indicating a shift towards value-seeking behavior [10][37] - The company noted a sequential improvement in sales throughout the quarter, with April finishing positively after a slow February [11][44] Company Strategy and Development Direction - The company is focused on reducing exposure to products made in China, aiming to decrease this from 9% to approximately 6% by year-end [8][10] - New store expansion remains a key growth engine, with plans to open 20 to 25 new stores in 2025 [14][15] - The company is leveraging technology, including RFID and handheld devices, to improve inventory accuracy and customer experience [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about navigating the current tariff environment while maintaining value for customers [5][24] - The company anticipates continued pressure on consumer spending due to inflation but believes its value proposition will attract more customers [24][108] - Guidance for 2025 was updated to reflect a range of sales outcomes based on potential tariff scenarios, with expected sales between $5.97 billion and $6.26 billion [35][36] Other Important Information - The company returned over $100 million of free cash flow to investors in Q1, including share repurchases and dividends [33] - Strategic investments in digital and supply chain technologies are expected to normalize SG&A expenses as the year progresses [30][32] Q&A Session Summary Question: Retention of higher-income consumers - Management noted that higher-income consumers are shopping more frequently and are retaining their loyalty, shopping across various product categories [40][41] Question: Performance in May and comp trends - May showed a slight decline in sales, but management remains optimistic about Q2 due to upcoming shopping events like Father's Day [44][45] Question: Impact of weather and consumer health - Management indicated that weather had a significant impact on sales, particularly in basketball and golf, and noted that consumers are cautious in their spending [94][50] Question: Tariff outlook for FY26 - Management emphasized the importance of diversifying sourcing to mitigate future tariff impacts, but specifics on the tariff situation remain uncertain [79][80] Question: Gross margin guidance - Management explained that gross margin guidance remains unchanged due to strategic inventory management and partnerships with suppliers to mitigate cost increases [54][56]

Financial Performance - First quarter net sales decreased by 0.9% to $1,351.4 million, while comparable sales declined by 3.7%[2] - First quarter diluted GAAP EPS was $0.68, down 32.7% from $1.01 in the same period last year[2] - Adjusted net income for the first quarter was $51.6 million, a decrease of 36.8% compared to $81.6 million last year[2] - Net sales for the thirteen weeks ended May 3, 2025, were $1,351,409, a slight decrease of 0.6% compared to $1,364,220 for the same period in 2024[26] - Net income for the thirteen weeks ended May 3, 2025, was $46,084, a decrease of 39.7% from $76,465 in the same period in 2024[26] - Adjusted Net Income for the thirteen weeks ended May 3, 2025, was $51,597,000, a decrease of 36.8% from $81,620,000 for the same period in 2024[35] - Adjusted Earnings Per Common Share, Diluted, for the thirteen weeks ended May 3, 2025, was $0.76, down from $1.08 in the prior year, representing a decline of 29.6%[35] Guidance and Projections - The company revised its fiscal 2025 guidance for net sales to a range of $5,970 million to $6,265 million, reflecting a potential decline in comparable sales of -4% to +1%[12] - The company expects adjusted earnings per share for fiscal 2025 to range from $5.45 to $6.25, compared to the previous guidance of $5.75 to $6.20[13] - The company provided guidance for the fiscal year ending January 31, 2026, projecting Adjusted Net Income between $375,000,000 and $435,000,000[37] - The projected Adjusted Earnings Per Common Share, Diluted, for the fiscal year ending January 31, 2026, is expected to range from $5.45 to $6.25[37] Store Operations - The company opened five new stores, increasing total locations to 303 across 21 states[6] - The company plans to open 20 to 25 new stores in fiscal 2025[6] Inventory and Assets - Merchandise inventories increased by 15.0% to $1,560.0 million compared to the previous year[3] - Total assets increased to $5,180,423 as of May 3, 2025, compared to $4,873,879 as of May 4, 2024[28] Cash Flow and Liabilities - Net cash provided by operating activities for the thirteen weeks ended May 3, 2025, was $157,472,000, a decrease of 21.1% compared to $199,677,000 for the same period in 2024[39] - Adjusted Free Cash Flow for the thirteen weeks ended May 3, 2025, was $106,484,000, down 36.3% from $167,322,000 in the prior year[39] - Current liabilities rose to $1,262,895 as of May 3, 2025, compared to $1,122,076 as of May 4, 2024[28] Shareholder Actions - Share repurchases in the first quarter totaled $99.9 million, a decrease of 19.1% from $123.5 million in the previous year[5] - The company repurchased $99,031 in common stock during the thirteen weeks ended May 3, 2025[30] Cost Management - The company has reduced its cost exposure to China to approximately 9% of total cost of goods sold, with a target of 6% by the end of fiscal 2025[8] - The company plans to reduce direct import cost exposure to China as part of its strategic initiatives[23] Other Financial Metrics - Gross margin increased to 34.0% for the thirteen weeks ended May 3, 2025, compared to 33.4% for the same period in 2024[26] - Operating income decreased to $69,265, representing 5.1% of net sales, down from $102,383 or 7.5% of net sales in the prior year[26] - Adjusted EBITDA for the thirteen weeks ended May 3, 2025, was $109,764, down from $142,578 in the same period in 2024[33] - Cash and cash equivalents decreased to $285,104 as of May 3, 2025, from $378,145 as of May 4, 2024[30] - Equity compensation for the thirteen weeks ended May 3, 2025, amounted to $7,542,000, compared to $6,138,000 in the same period of 2024, reflecting an increase of 23.0%[35] - The weighted average common shares outstanding for the thirteen weeks ended May 3, 2025, were 68,170,000 diluted shares, down from 75,798,000 in the prior year[35] - The tax effects of adjustments for the thirteen weeks ended May 3, 2025, were $(2,029,000), compared to $(1,432,000) for the same period in 2024[36]