Investment Rating - The industry view is rated as Attractive, with a preference for gold, cement, building materials, and steel for 2Q25 [7]. Core Insights - Demand in the materials sector showed signs of recovery in 1Q25, but the outlook for 2Q25 is uncertain due to tariff concerns [2]. - The report anticipates that metals-related stocks may outperform in 2H25 as further stimulus is expected [1][6]. - The impact of tariffs is projected to lower China's 2025 real GDP forecast by 30 basis points to 4.2% [2][18]. Summary by Sections Gold - Gold is identified as the top pick within commodities, supported by ongoing central bank buying and rising ETF inflows [3]. - Lower Treasury yields are expected to enhance gold's macro backdrop [3]. Cement and Steel - Cement supply-side controls were announced in November 2024, leading to a focus on profitability rather than price wars [4]. - A production cut of 30 million tons and an export cut of 15-20 million tons for steel is anticipated in 2025 [4]. Metals - In 2H25, copper and aluminum are expected to outperform due to continued demand from grid and EV-related infrastructure [5]. - The report notes that aluminum will benefit from margin expansion amid limited supply increases [5]. Tariff Impact - The cumulative US tariffs are expected to have a more significant growth drag compared to the 2018-19 period, with a projected weighted average tariff hike on China reaching 34% by year-end [17]. - The tariff shocks are anticipated to affect both trade channels and domestic demand, contributing to a GDP growth reduction of 90 basis points [18].

CITI'S TAKE Materials demand in 1Q25 was mostly in line with our expectation, with stronger prints on steel and cement, and weaker on coal. As the trade war between the US and China escalates, we assess the impact from trade disruptions and potential RMB depreciation on materials. We believe the impact of tariffs has already kicked in for the battery supply chain (see note) and expect more to be felt through commodities in the coming months. This should call for more decisive policies from Chinese side to b ...

We lower ests across the board, detail macro/tariff impacts to ecom/digital ads and showcase a "visibility to FCF vs valuation to bear case" framework analyzing valuation support and where we expect durable out-performance first. META/GOOG/UBER screen best followed by CHWY/DASH/U/AMZN/BKNG/RDDT. First, 3 Macro Factors We Are Most Focused On: The MS macro team continues to expect muted GDP growth (0.6%/0.5% '25/'26 real GDP growth), firming inflation and a steady Fed in '25. As tariff headlines and realities ...

Key Takeaways Guidance will be key from both companies, a theme we'll see in the Q1 reporting cycle. Both stocks have showed great relative strength in 2025. Earnings season is always exciting for investors, with companies finally pulling the curtain back and unveiling what’s happened behind the scenes. Guidance is notably more critical this reporting cycle, given the recent tariff-induced spooks that we’ve become accustomed to.Importantly, several notable large-cap stocks are reporting this week, a list t ...

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government ...

Financial Data and Key Metrics Changes - Net sales for Q4 2024 were $1,680 million, representing a 6.6% decline compared to the previous year, primarily due to a comparison against a 53-week fiscal year [7][36] - Comparable sales decreased by 3%, with a sequential improvement from Q3 and the first half of the year [8][36] - Gross margin for Q4 was 32.2%, down 110 basis points year-over-year, influenced by higher freight and distribution costs [13][37] - Net income for Q4 was $133.6 million, with diluted earnings per share of $1.89, while adjusted net income was $139 million or $1.96 per share [36][48] Business Line Data and Key Metrics Changes - The outdoor category was the best performer, with net sales growth of 2%, driven by hunting, fishing, and camping products [11] - The footwear business saw a 2% decline in net sales, with strong performances from brands like ASICS and New Balance [13] - Private brands accounted for approximately 23% of total net sales, up from 22% in the previous fiscal year [18] Market Data and Key Metrics Changes - The company gained approximately 40 basis points of store traffic share among households earning over $100,000 annually in December, indicating a shift in consumer behavior towards value [40][93] - Traffic growth accelerated by 700 basis points in December compared to October, reflecting a positive response to the company's value proposition [40] Company Strategy and Development Direction - The company plans to open 20 to 25 new stores in 2025, having already opened three in Pennsylvania and Maryland [20] - A significant focus will be on enhancing the e-commerce experience, including improvements in site navigation and fulfillment options [23][24] - The introduction of the Jordan brand in 145 stores is expected to be a major growth driver, with plans to expand Nike assortments as well [26][80] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2025, anticipating challenges in Q1 but expecting Q2 to be the strongest quarter due to new initiatives [49][60] - The company is adapting to macroeconomic pressures and consumer behavior changes, focusing on value offerings to attract a broader customer base [28][60] Other Important Information - The company generated $528 million in cash from operations in 2024 and returned over $396 million to shareholders through dividends and share repurchases [42][43] - An 18% increase in dividends was approved, resulting in a payout of $0.13 per share [44] Q&A Session Summary Question: What are the expected drivers of gross margin expansion in 2025? - Management indicated that recapturing supply chain headwinds and a higher penetration of soft lines, supported by Jordan and Nike, are expected to drive margin expansion [54][55] Question: How does the company view the impact of weather versus consumer uncertainty? - Management noted that while weather has impacted sales, they are optimistic about trends improving as the year progresses, particularly with new initiatives [60][62] Question: What is the expected contribution of new stores to comps in 2025? - Management expects new stores to contribute positively to comps, with a significant number of stores from previous vintages entering the comp base [66] Question: Can you provide more details on the Jordan brand launch? - The Jordan brand will be launched in 145 stores and online, marking the first time Academy will sell this brand, with a focus on sport products [78][80] Question: What is the company's strategy regarding tariffs and sourcing? - The company has diversified its sourcing base to mitigate tariff impacts and is focused on maintaining value for customers despite potential cost increases [86][87]