Academy-ASO Gears Up for Q4 Earnings: What's in Store for the Stock?

Core Viewpoint - Academy Sports and Outdoors, Inc. (ASO) is expected to report a decline in earnings and revenues for the fourth quarter of fiscal 2024, facing challenges from a tough macroeconomic environment and reduced consumer spending [1][2][3]. Group 1: Earnings and Revenue Estimates - The Zacks Consensus Estimate for ASO's earnings is $1.82 per share, reflecting a decline of 17.7% from$ 2.21 a year ago [2] - The consensus estimate for revenues is $1.67 billion, indicating a decrease of 7.1% from the previous year [2]. Group 2: Factors Affecting Performance - The company is likely to have faced headwinds from a challenging macroeconomic environment, particularly affecting middle- and lower-income consumers, leading to reduced discretionary spending [3] - An increase in credit card and Buy Now, Pay Later transactions among lower-income shoppers suggests financial strain, raising concerns about the sustainability of demand [3]. - The Zacks Consensus Estimate for comparable store sales indicates a decline of 4.5% [4]. Group 3: Revenue Breakdown - The consensus estimates for specific revenue categories are as follows: Apparel at$ 526 million (down 3.5%), Outdoors at $443.9 million (down 4.6%), Footwear at$ 301.1 million (down 6.7%), and Sports and Recreational at $411.5 million (down 9%) [4]. Group 4: Positive Factors - Product innovation and expansion efforts are expected to have positively impacted performance, with a focus on omnichannel improvements and digital enhancements [5]. - Strengthening inventory positions with seasonally appropriate products and initiatives like My Academy Rewards are likely to have boosted engagement and incremental sales [5]. Group 5: Earnings Prediction Model - The current model does not predict an earnings beat for ASO, with an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell) [6].