Core Viewpoint - JPMorgan analyst Christopher Horvers maintains a Neutral rating on Academy Sports and Outdoors, Inc. (ASO), raising the price target to $54 from $52, despite mixed quarterly results [1][4]. Financial Performance - Academy Sports reported fourth-quarter adjusted earnings per share of $1.96, exceeding the street estimate of $1.83 [1]. - Quarterly sales reached $1.676 billion, reflecting a 6.6% year-over-year decline, slightly missing the analyst consensus estimate of $1.677 billion [1]. Strategic Initiatives - The company is improving new store site selection for the second half of 2024, addressing previous underperformance in unit growth that began in 2022 [2]. - IT enhancements and plans are expected to boost the performance of existing stores [3]. - Academy Sports is expanding its Nike product assortment to 145 of its 300+ locations and its website, starting in April, to better compete with Dick's Sporting Goods [3]. Market Challenges - The macroeconomic environment poses challenges for Academy Sports, particularly due to its higher exposure to lower-income consumers compared to competitors like Dick's Sporting Goods [4]. - Despite an attractive valuation, there is uncertainty regarding the company's growth potential under current market conditions, with projected 1Q/FY25 comparable sales of -3.5% and flat, respectively [4]. Stock Performance - ASO shares are trading higher by 1.14% to $47.96 as of the last check on Friday [5].

Market Overview - Major U.S. indexes have experienced significant volatility in 2024, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite declining by 6.12%, 4.07%, and 10.40% year-to-date, respectively [1] - Investor concerns are heightened due to potential trade wars, government shutdowns, and recession fears, influenced by President Trump's fiscal, trade, and immigration policies [1] Economic Indicators - The Consumer Price Index (CPI) rose by 0.2% in February, following a 0.5% increase in January, with an annual CPI drop of 2.8% from 3% in January [2] - Trump's tariffs have raised inflation fears and concerns about economic growth, impacting expectations for Federal Reserve interest rate cuts, which are currently between 4.25% and 4.50% [2] - The labor market remains stable, but immigration policies and layoffs threaten its stability [2] Investment Opportunities - In a volatile market, dividend-paying stocks are recommended for portfolio diversification, with notable companies including Toll Brothers, DICK'S Sporting Goods, KornFerry International, Banco Santander, and Applied Materials [3] Company Profiles Toll Brothers - Toll Brothers specializes in building various residential communities and has a Zacks Rank of 3 (Hold) [4] - The company declared a dividend of 25 cents per share, with a dividend yield of 0.9%, and has increased its dividend five times over the past five years, with a payout ratio of 7% [5] DICK'S Sporting Goods - DICK'S Sporting Goods is a major omni-channel retailer for sporting goods, holding a Zacks Rank of 3 [6] - The company announced a dividend of $1.21 per share, yielding 2.3%, and has raised its dividend seven times in the last five years, with a payout ratio of 31% [7] KornFerry International - KornFerry is a leading executive recruitment firm with a Zacks Rank of 2 (Buy) [8] - The company declared a dividend of 48 cents per share, yielding 2.2%, and has increased its dividend six times over the past five years, with a payout ratio of 31% [9] Banco Santander - Banco Santander is the largest bank in Spain, currently holding a Zacks Rank of 3 [11] - The bank declared a dividend of 8 cents per share, yielding 2.4%, and has increased its dividend seven times in the last five years, with a payout ratio of 19% [12] Applied Materials - Applied Materials is a major supplier of semiconductor fabrication equipment, with a Zacks Rank of 3 [13] - The company announced a dividend of 46 cents per share, yielding 1.1%, and has increased its dividend six times over the past five years, with a payout ratio of 18% [14]

Financial Data and Key Metrics Changes - The company achieved record sales of $13.4 billion for the full year 2024, with comparable sales increasing by 5.2% driven by growth in average ticket and transactions [7][22] - For Q4, comparable sales increased by 6.4%, with consolidated net sales reaching $3.89 billion, marking the largest sales quarter in the company's history [8][24] - Earnings per diluted share for the full year were $14.05, a 10.5% increase on a 52-week comparable basis from the previous year's $12.91 [23][26] Business Line Data and Key Metrics Changes - The footwear business is highlighted as a key growth area, with a focus on enhancing the athlete experience and increasing market share [16][74] - The company reported growth across all business segments, including soft lines, footwear, and hard lines, indicating a well-rounded performance [46] Market Data and Key Metrics Changes - The company commands just under 9% of the $140 billion U.S. sports retail industry, reflecting a 50 basis point increase in market share from the previous year [9][10] - The company gained approximately 7 million new athletes in 2024, with 2.2 million added in Q4 alone [48] Company Strategy and Development Direction - The company is focusing on three key growth areas: repositioning its real estate and store portfolio, driving growth in footwear, and accelerating e-commerce [12][41] - Significant investments are planned in digital and in-store opportunities to enhance market position and athlete experience [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategies and the strength of the consumer base, despite external uncertainties in the macroeconomic environment [48][100] - For 2025, the company anticipates comp sales growth in the range of 1% to 3%, with expected gross margin expansion of approximately 75 basis points [20][29] Other Important Information - The company plans to open approximately 16 new House of Sport locations and 18 Fieldhouse locations in 2025, continuing its innovative store formats [33][40] - A new five-year share repurchase program of up to $3 billion was announced, alongside a 10% increase in quarterly dividends [36] Q&A Session Summary Question: Can you discuss the impact of tariffs on your business? - Management indicated that existing tariffs have been accounted for in guidance, but new discussions are evolving and not included [51][91] Question: Can you provide more detail on pre-opening expenses? - Management stated that pre-opening expenses vary based on new store openings and will provide clarity in future calls [52] Question: How is the footwear strategy evolving? - The company is focusing on high-impact marketing and enhancing in-store experiences to drive footwear sales, with a penetration rate now at 28% [74][76] Question: Are you seeing any signs of a weaker consumer? - Management clarified that they are not seeing a weaker consumer and that guidance reflects caution due to external uncertainties [100]

Core Insights - Kroger Co. is expected to report declines in both revenue and earnings for the fourth quarter of fiscal 2024, with revenue estimated at $34,594 million, reflecting a 6.7% decrease year-over-year [1] - The earnings per share (EPS) consensus estimate is $1.10, indicating a 17.9% decline from the same quarter last year [2] Financial Performance - The Zacks Consensus Estimate for total retail sales, excluding fuel, is $30,895 million, which represents a 7.3% year-over-year decline [5] - Identical sales without fuel are projected to grow by 1.8%, a slowdown from the previous quarter's 2.3% increase [5] - Supermarket fuel sales are expected to decrease by 4.2% year-over-year to $3,323 million [5] Operational Challenges - Kroger is facing a challenging operating environment due to tightening consumer spending and increased competition, with budget-conscious households affected by inflation and higher interest rates [3] - The company has been dealing with rising operating, general, and administrative (OG&A) expenses, which increased by 22 basis points in the third quarter, potentially impacting profitability [4] Strategic Positioning - Despite the challenges, Kroger's customer segmentation strategy and focus on value-driven offerings are likely to help maintain its competitive position [6] - The company emphasizes a diverse fresh product selection, personalized shopping experiences, and a seamless digital ecosystem as core strengths [6] Earnings Prediction - Current predictions do not indicate a strong likelihood of an earnings beat for Kroger, with a Zacks Rank of 3 and an Earnings ESP of -0.20% [7]

Financial Data and Key Metrics Changes - Net sales for Q4 2024 were $181.6 million, down from $196.3 million in the prior year, with same-store sales decreasing by 6.1% [6][18] - Gross profit for Q4 2024 was $51.2 million, compared to $59.2 million in Q4 2023, resulting in a gross profit margin of 28.2%, down from 30.2% [15][17] - The net loss for Q4 2024 was $20.9 million or $0.95 per basic share, compared to a net loss of $8.9 million or $0.41 per basic share in Q4 2023 [17][19] - Adjusted EBITDA was negative $16.4 million in Q4 2024, compared to negative $8.7 million in the same quarter last year [18] Business Line Data and Key Metrics Changes - On a same-store basis, apparel sales declined by 1.3%, footwear by 5.4%, and hard goods by 8.7% [8] - Average sale decreased by 2.3%, while transactions were down by 3.8% [8] Market Data and Key Metrics Changes - The company faced macroeconomic headwinds affecting consumer discretionary spending, with winter-related product sales being particularly soft due to unfavorable weather conditions [7][12] - Southern markets experienced below-normal snowfall, impacting winter product sales [13] Company Strategy and Development Direction - The company plans to close 15 stores in fiscal 2025, having already closed eight locations in the first quarter, to focus resources on more productive stores [11] - Capital expenditures for fiscal 2024 were $10.9 million, with expectations for $4 million to $8 million in fiscal 2025, primarily for store-related remodeling [20] Management's Comments on Operating Environment and Future Outlook - Management indicated that sales trends remain challenged, with no improvement in macroeconomic conditions expected in the near term [12][23] - For Q1 2025, same-store sales are expected to decline in the mid to high single-digit range compared to Q1 2024 [23] Other Important Information - Merchandise inventory at the end of Q4 2024 decreased by 5.6% year-over-year, reflecting efforts to align inventory levels with sales [20] - The company amended and extended its $150 million credit agreement with Bank of America, providing financial flexibility [22] Q&A Session Summary Question: What are the expectations for same-store sales in the upcoming quarter? - Management expects same-store sales to decline in the mid to high single-digit range due to ongoing macroeconomic headwinds [23] Question: How is the company managing its inventory levels? - The company has successfully reduced inventory by 5.6% year-over-year to better align with sales [20] Question: What is the outlook for the winter business? - The winter business remains soft, particularly in southern markets, but spring-related activities are anticipated to drive business as the season transitions [12][13]