Academy(US:ASO)2021-04-06 16:00Financial Performance - In 2020, Academy Sports + Outdoors served 30 million unique customers and completed approximately 80 million transactions, resulting in net sales of $5.7 billion[17]. - The company finished the fiscal year ended January 30, 2021, with approximately $5.7 billion in sales and $308.8 million in net income[26]. - In 2020, the company generated $5.7 billion in net sales, $308.8 million in net income, and $607.0 million in Adjusted EBITDA, reflecting an 88% growth compared to 2019[55]. - Total merchandise sales for the fiscal year ended January 30, 2021, reached $5.66 billion, a 17.7% increase from $4.81 billion in the previous year[79]. - The company reduced its net leverage ratio to 0.7x by the end of 2020, down from 4.1x and 5.2x at the end of 2019 and 2018, respectively[55]. Store Operations and Expansion - The company operates 259 stores across 16 contiguous states, with plans to open 8 to 10 new stores per year starting in 2022[19]. - The average store size is approximately 70,000 gross square feet, with a new smaller store format being tested that is about 40% smaller[72]. - The company has identified approximately 675 greenfield locations for potential expansion beyond its current footprint[71]. - Academy's retail locations range from 40,000 to 130,000 gross square feet, providing a spacious shopping experience[19]. Customer Engagement and Loyalty - Approximately 56% of customers purchased an owned brand item in 2020, indicating strong brand loyalty[22]. - The average customer visits the stores 2 to 3 times per year, with the best customers visiting 9 times per year, demonstrating strong customer loyalty[50]. - The Academy Credit Card program constituted approximately 4.5% of 2020 net sales, indicating a significant opportunity for customer loyalty[30]. - BOPIS (Buy Online, Pick Up In Store) orders accounted for 51% of all e-commerce sales during 2020, highlighting the importance of omnichannel offerings[57]. E-commerce and Omnichannel Strategy - The e-commerce platform achieved year-over-year sales growth of 138% in 2020, with e-commerce sales representing 10% of merchandise sales[24]. - E-commerce sales represented 10.4% of merchandise sales in 2020, with a significant increase of 406% in Q1 2020 compared to the same quarter in the previous year[56]. - E-commerce sales accounted for 10.4% of merchandise sales in 2020, up from 5.1% in 2019 and 4.9% in 2018, indicating a significant growth in online shopping[79]. - The omnichannel strategy includes a strong buy-online-pickup-in-store program, enhancing customer convenience and driving sales[17]. Merchandise and Inventory Management - The product assortment includes outdoor (35%), apparel (25%), sports & recreation (22%), and footwear (18%) categories, with nearly 20% of sales from owned brands[18][22]. - Inventory turns improved from 2.84x in 2019 to 3.89x in 2020 due to a new merchandise planning and allocation system[30]. - Average inventory turns improved from 2.84x in 2019 to 3.89x in 2020 due to enhanced inventory management practices[64]. - The company has a diverse merchandise offering, with no single vendor representing more than 12% of total purchases in 2020, ensuring a stable supply chain[76]. Market Trends and Industry Insights - The outdoor recreation industry is expected to see a long-term increase in customer base, with 49% of Americans planning to engage in more outdoor activities[32]. - The sporting goods and outdoor recreation industry was estimated at $70 billion in 2018, with expected sales growth of approximately 6% per annum from 2019 through 2027[41]. - Female customers constituted 48% of the customer base in 2020, highlighting the importance of targeted merchandise for this demographic[38]. Workforce and Corporate Culture - The company employs over 22,000 team members, with a balanced distribution of full-time and part-time employees[92]. - The company established a Diversity, Inclusion and Belonging Committee in 2020 to enhance team diversity and community representation[94]. - The company focuses on talent management through personal growth opportunities, cross-functional training, and annual performance reviews[95]. - The company engages in annual succession planning to identify internal candidates for key positions[95]. Safety and Regulatory Compliance - The company has implemented enhanced safety measures during the COVID-19 pandemic, including regular professional cleaning and social distancing protocols[97]. - The company has a commitment to a Safety-First culture, focusing on reducing the frequency and severity of safety incidents[96]. - The company is subject to various federal, state, and local regulations that could materially affect operations and financial results[99]. Seasonal Trends - The business is subject to seasonal fluctuations, with significant sales driven by summer holidays and the November/December holiday season[289]. - The business experiences seasonal fluctuations, with significant net sales driven by summer holidays and the November/December holiday season[91]. Financial Sensitivity - A hypothetical 100 basis point increase in interest rates would reduce income before income taxes by approximately $4.0 million for 2020[288]. Marketing Strategy - The company’s marketing strategy includes various media channels and community engagement events to drive customer traffic and enhance brand visibility[85][86]. COVID-19 Impact - Academy's stores have remained open during the COVID-19 pandemic, resulting in market share gains and increased community connections[19].