This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. Dive Brief: Academy Sports and Outdoors has “no regrets” associated with its move to frontload inventory in the first two quarters of the year, EVP and CFO Earl Ford told analysts during a Dec. 9 earnings call. Because inventory was pulled into the retailer’s warehouses and distribution centers prior to President Donald Trump’s new tariffs, Academy Spo ...

Core Insights - Academy Sports and Outdoors, Inc. (ASO) reported revenue of $1.38 billion for the quarter ended October 2025, reflecting a 3% increase year-over-year, while EPS rose to $1.14 from $0.98 in the previous year [1] - The revenue fell short of the Zacks Consensus Estimate of $1.4 billion, resulting in a surprise of -1.2%, but the EPS exceeded expectations with a surprise of +6.54% against a consensus estimate of $1.07 [1] Financial Performance Metrics - Comparable Sales Growth was reported at -0.9%, slightly below the estimated -0.8% by analysts [4] - The number of stores at the end of the period was 317, surpassing the estimated 316 [4] - The company opened 11 new stores, exceeding the average estimate of 10 [4] - Net Sales in the Merchandise Division for Outdoors reached $445.14 million, exceeding the average estimate of $422.53 million, marking a year-over-year increase of +3.1% [4] - Net Sales for Sports and Recreation amounted to $288.74 million, above the estimated $286.63 million, with a year-over-year growth of +4.2% [4] - Other Sales were reported at $7.56 million, significantly lower than the average estimate of $35.74 million, but still showing a +2.2% year-over-year increase [4] - Footwear sales reached $292.44 million, slightly above the estimated $291.23 million, reflecting a +2.4% change year-over-year [4] - Total Merchandise Sales were $1.38 billion, slightly above the estimated $1.37 billion, with a year-over-year increase of +3% [4] - Apparel sales were reported at $349.81 million, below the estimated $365.51 million, but still showing a +2.4% year-over-year increase [4] Stock Performance - Academy Sports and Outdoors shares have returned +8.9% over the past month, outperforming the Zacks S&P 500 composite, which saw a +1.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Academy Sports and Outdoors, Inc. is set to release its third-quarter earnings results on December 9, with expectations of improved earnings and revenue compared to the previous year [1] Earnings Expectations - Analysts predict quarterly earnings of $1.06 per share, an increase from $0.98 per share in the same period last year [1] - The consensus estimate for quarterly revenue is $1.41 billion, up from $1.34 billion a year earlier [1] Recent Performance - In the second quarter, the company reported adjusted earnings per share of $1.94, which fell short of the analyst consensus estimate of $2.16 [2] - Quarterly sales were $1.599 billion, reflecting a 3.3% year-over-year increase, but also missed the expected $1.614 billion [2] - Following the second-quarter report, shares rose by 1.9% to close at $50.23 [2] Analyst Ratings - Evercore ISI Group analyst Greg Melich maintained an In-Line rating and raised the price target from $50 to $55 [5] - Barclays analyst Adrienne Yih initiated coverage with an Equal-Weight rating and a price target of $51 [5] - Guggenheim analyst John Heinbockel maintained a Buy rating with a price target of $60 [5] - Citigroup analyst Paul Lejuez downgraded the stock from Buy to Neutral, lowering the price target from $55 to $50 [5] - JP Morgan analyst Christopher Horvers maintained a Neutral rating and raised the price target from $54 to $56 [5]

Core Insights - Analysts expect Academy Sports and Outdoors, Inc. (ASO) to report quarterly earnings of $1.07 per share, reflecting a year-over-year increase of 9.2% [1] - Projected revenues are anticipated to be $1.4 billion, which represents a 4.3% increase from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, indicating a stable outlook from analysts [1] Revenue Projections - 'Net Sales- Merchandise Division Sales- Outdoors' is projected to reach $422.53 million, indicating a year-over-year decline of 2.1% [4] - 'Net Sales- Merchandise Division Sales- Sports and recreation' is estimated at $286.63 million, reflecting a 3.5% increase from the prior year [4] - 'Net Sales- Other Sales' is expected to be $35.74 million, showing a significant increase of 383% year-over-year [4] Additional Sales Estimates - 'Net Sales- Merchandise Division Sales- Footwear' is forecasted to be $291.23 million, indicating a 2% increase from the previous year [5] - 'Net Sales- Total Merchandise Sales' is projected at $1.37 billion, representing a 2.2% increase year-over-year [5] - 'Net Sales- Merchandise Division Sales- Apparel' is expected to reach $365.51 million, reflecting a 7% increase from the prior year [6] Store Metrics - Analysts predict 'Stores - EOP' to total 316, up from 298 in the same quarter last year [6] - The forecast for 'New stores open' is set at 10, compared to 8 reported in the previous year [6] Market Performance - Academy Sports and Outdoors shares have increased by 5.8% over the past month, outperforming the Zacks S&P 500 composite, which saw a 0.1% increase [7] - The company holds a Zacks Rank of 3 (Hold), suggesting it is expected to closely follow overall market performance in the near term [7]

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks, utilizing fundamental analysis and traditional valuation metrics to find undervalued stocks in the market [2]. Company Summary: Academy Sports and Outdoors (ASO) - ASO currently holds a Zacks Rank 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4]. - The stock is trading at a P/E ratio of 7.84, significantly lower than the industry average of 23.03, with a historical Forward P/E range between 5.45 and 9.30 over the past 12 months [4]. - ASO's P/B ratio stands at 1.54, compared to the industry's average P/B of 3.96, with a historical range of 1.18 to 2.32 [5]. - The P/S ratio for ASO is 0.53, which is lower than the industry average of 1.14, making it a more reliable performance indicator due to the difficulty of manipulating revenue figures [6]. - Overall, ASO appears to be undervalued based on these metrics, and its strong earnings outlook positions it as one of the market's strongest value stocks [7].

Group 1 - The article discusses the author's previous hold rating on Academy Sports and Outdoors, Inc. (ASO), indicating a desire for more clarity on tariff situations and macroeconomic conditions [1] - The author emphasizes a diverse investment background, incorporating fundamental, technical, and momentum investing strategies to enhance their investment process [1] - The purpose of writing on Seeking Alpha is to track investment ideas' performance and connect with like-minded investors [1] Group 2 - There are no disclosed stock, option, or derivative positions in any mentioned companies, nor plans to initiate such positions within the next 72 hours [2] - The article expresses the author's personal opinions and is not compensated for it, aside from Seeking Alpha [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the platform's overall stance [3]

Core Insights - The year 2025 has been characterized as interesting for the retail sector, with ongoing challenges and changes impacting operations [2] - The changing trade war has influenced the company's navigation strategies, but positive initiatives are yielding results [2] - New store growth has led to positive comparable store sales in the mid-single digits for recently opened locations [2] - The company's dot-com business is experiencing acceleration due to a back-to-basics approach that enhances site navigation [3]

Core Insights - Academy Sports and Outdoors, Inc. reported revenue of $1.6 billion for the quarter ended July 2025, reflecting a year-over-year increase of 3.3% but a slight miss of 0.67% against the Zacks Consensus Estimate of $1.61 billion [1] - The company's EPS for the quarter was $1.94, down from $2.03 in the same quarter last year, resulting in an EPS surprise of -8.49% compared to the consensus estimate of $2.12 [1] Financial Performance Metrics - Comparable Sales Growth was 0.2%, outperforming the six-analyst average estimate of -0.4% [4] - Total Merchandise Sales reached $1.59 billion, exceeding the two-analyst average estimate of $1.57 billion, with a year-over-year change of +3.3% [4] - Net Sales in the Merchandise Division for Outdoors was $448.94 million, surpassing the average estimate of $431.73 million, marking a year-over-year increase of +14.6% [4] - Net Sales for Sports and Recreation was $369.79 million, falling short of the average estimate of $382.84 million, representing a year-over-year decline of -8% [4] - Net Sales for Footwear was $323.24 million, slightly above the average estimate of $321.82 million, with a year-over-year increase of +3.6% [4] - Net Sales for Apparel was $451.12 million, exceeding the average estimate of $429.69 million, reflecting a year-over-year change of +3.3% [4] - Other Sales amounted to $6.75 million, significantly below the average estimate of $26.31 million, with a year-over-year change of +2.7% [4] Stock Performance - Shares of Academy Sports and Outdoors have returned +3.9% over the past month, slightly outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - Net sales for Q2 2025 were approximately $1.6 billion, up 3.3% year-over-year, with a comparable sales increase of 0.2% [5][18] - Gross margin was 36%, down two basis points from the previous year, while merchandise margin improved by 40 basis points [19][20] - Operating income was $172 million, and diluted earnings per share was $1.85, with adjusted earnings per share at $1.94 [19][20] Business Line Data and Key Metrics Changes - The dot-com business grew approximately 18% during Q2, contributing positively to overall sales [5][18] - Performance across major categories was consistent, with low single-digit increases in footwear, apparel, sports and recreation, and outdoor categories [6][10] - Seasonal categories like swim and summer footwear experienced a slow start but rebounded in late June and July [6][10] Market Data and Key Metrics Changes - Strong double-digit growth in foot traffic was observed among consumers in the top two income quintiles (households making over $100,000) [8][9] - Traffic share remained flat in the middle-income segment ($50,000 to $100,000), while there was erosion in the lower-income cohort (under $50,000), though at a slower pace than in Q1 [9][10] Company Strategy and Development Direction - The company’s primary growth strategy includes opening new stores, with three new locations opened in Q2, bringing the total to 306 stores [10][11] - Focus on enhancing the dot-com business through improved site navigation, order fulfillment, and expanded product assortment [12][15] - Initiatives to improve existing store productivity include adding popular brands and implementing new technology like RFID handheld scanners [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business momentum, particularly in light of positive comp sales and market share gains [10][23] - The company is closely monitoring consumer behavior in response to inflation and pricing adjustments, with a focus on maintaining a strong value proposition [8][32] - Future guidance indicates a tightening of the low end of comp sales expectations, now ranging from negative 3% to positive 1% for the year [22][23] Other Important Information - The company has taken measures to mitigate tariff impacts, including adjusting unit buys and optimizing pricing strategies [17][39] - Inventory levels are expected to normalize as the year progresses, with a current elevated inventory per store [20][22] Q&A Session Summary Question: Insights on consumer behavior post back-to-school period - Management noted continued episodic shopping patterns, with positive comps during back-to-school but a slight pullback afterward attributed to less clearance activity [26][27] Question: Impact of tariff pricing on average ticket - Average unit retails (AURs) were up low to mid-single digits, with expectations for further price adjustments in the back half of the year [29][30] Question: Guidance on SG&A and operating leverage - SG&A is expected to deleverage by approximately 100 basis points for the full year, with continued investments in growth initiatives [35][36] Question: Promotional environment and merchandise margin - The promotional environment remains competitive, with higher take rates on promotions, but merchandise margin has not significantly benefited from product mix changes [73][74] Question: Performance of higher-income consumers - The top two income quintiles showed double-digit traffic growth, which is expected to continue driving comp growth [75][76] Question: Expansion of Nike and Jordan assortments - The company has significantly expanded its Jordan assortment since launch, with plans for further expansion in the coming year [80][86]

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]