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Academy Sports (ASO) Q2 Earnings Beat Estimates, Stock Up
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Academy Sports and Outdoors, Inc. (ASO - Free Report) reported second-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. However, the top and the bottom line declined on a year-over-year basis.
Following the results, shares of the company rose 9.3% during trading hours on Aug 31. Positive investor sentiments were witnessed as ASO provided a better-than-expected earnings outlook for fiscal 2023.
Management is optimistic about new store openings, omni-channel enhancements and IT and digital marketing projects. The company plans to open 13-14 total new stores in fiscal 2023 and 120-140 new stores over the five fiscal year period ending 2027.
Earnings & Revenues Details
During the fiscal second quarter, the company reported adjusted earnings per share (EPS) of $2.09, beating the Zacks Consensus Estimate of $2.00. In the prior-year quarter, ASO reported an adjusted EPS of $2.30.
Academy Sports and Outdoors, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $1,583.1 million beat the Zacks Consensus Estimate of $1,576 million by 0.5%. However, the top line fell 6.2% on a year-over-year basis. The downside was mainly caused by a fall in comparable sales.
Comparable sales during the quarter declined 7.5% year over year compared with a 6% fall reported in the prior-year quarter. The downside was due to lower sales across all merchandise divisions owing to a fall in transactions (8.3% year over year). However, this was partially offset by an increase in average tickets (0.8%).
Operating Highlights
During the fiscal second quarter, Selling, general and administrative expenses came in at $352.5 million compared with $339.3 million reported in the prior-year quarter. The downside was primarily attributable to deleverage from decreased sales.
Gross margins during the quarter increased 30 basis points year over year to 35.6%. Lower freight costs backed the upside. However, this was partially offset by the unfavorable impact of increased shrink and promotional activity on a year-over-year basis.
Adjusted net income during the quarter came in at $163.6 million compared with $193.5 million reported in the prior year quarter.
Adjusted EBITDA in the fiscal second quarter came in at $248.8 million compared with $290.6 million reported in the prior-year quarter.
Balance Sheet
As of Jul 29, 2023, cash and cash equivalents totaled $311.3 million compared with $399.9 million on Jul 30, 2022.
Merchandise inventories during the quarter came in at $1,309 million compared with $1,304.6 million reported in the prior-year period.
As of Jul 29, 2023, Long-term debt net stood at $583.7 million compared with $683.1 million reported in the prior year quarter.
The company declared a cash dividend of 9 cents per share. The dividend will be paid out on Oct 11, 2023, to shareholders on record as of Sep 13, 2023.
Fiscal 2023 Outlook
For fiscal 2023, the company expects net sales to be between $6.2-$6.4 billion. The company expects comparable sales to decline between 7.5% and 4.5% on a year-over-year basis.
The gross margin rate in fiscal 2023 is expected to be between 34% and 34.4%. Capital expenditures during the year are anticipated in the range of $200-$250 million. The company expects 2023 adjusted net income to lie between $545 and $600 million in fiscal 2023.
Adjusted free cash flow during the year is expected to be between $400 and $450 million. The company anticipates 2023 Adjusted EPS to be in the range $6.95-$7.65, up from the prior projection of $6.80-$7.50.
Zacks Rank & Key Picks
Academy Sports currently has a Zacks Rank #4 (Sell).
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates a rise of 54.5% and 180.3%, respectively, from the year-ago period’s levels.
Trip.com Group Limited (TCOM - Free Report) flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 147.9% on average. Shares of TCOM have increased 53.1% in the past year.
The Zacks Consensus Estimate for TCOM’s 2023 sales and EPS indicates a rise of 104.9% and 537.9%, respectively, from the year-ago period’s levels.
Skechers U.S.A., Inc. (SKX - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 39.1% on average. Shares of SKX have increased 34.1% in the past year.
The Zacks Consensus Estimate for SKX’s 2023 sales and EPS indicates a rise of 8.7% and 42%, respectively, from the year-ago period’s levels.
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Academy Sports (ASO) Q2 Earnings Beat Estimates, Stock Up
Academy Sports and Outdoors, Inc. (ASO - Free Report) reported second-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. However, the top and the bottom line declined on a year-over-year basis.
Following the results, shares of the company rose 9.3% during trading hours on Aug 31. Positive investor sentiments were witnessed as ASO provided a better-than-expected earnings outlook for fiscal 2023.
Management is optimistic about new store openings, omni-channel enhancements and IT and digital marketing projects. The company plans to open 13-14 total new stores in fiscal 2023 and 120-140 new stores over the five fiscal year period ending 2027.
Earnings & Revenues Details
During the fiscal second quarter, the company reported adjusted earnings per share (EPS) of $2.09, beating the Zacks Consensus Estimate of $2.00. In the prior-year quarter, ASO reported an adjusted EPS of $2.30.
Academy Sports and Outdoors, Inc. Price, Consensus and EPS Surprise
Academy Sports and Outdoors, Inc. price-consensus-eps-surprise-chart | Academy Sports and Outdoors, Inc. Quote
Quarterly revenues of $1,583.1 million beat the Zacks Consensus Estimate of $1,576 million by 0.5%. However, the top line fell 6.2% on a year-over-year basis. The downside was mainly caused by a fall in comparable sales.
Comparable sales during the quarter declined 7.5% year over year compared with a 6% fall reported in the prior-year quarter. The downside was due to lower sales across all merchandise divisions owing to a fall in transactions (8.3% year over year). However, this was partially offset by an increase in average tickets (0.8%).
Operating Highlights
During the fiscal second quarter, Selling, general and administrative expenses came in at $352.5 million compared with $339.3 million reported in the prior-year quarter. The downside was primarily attributable to deleverage from decreased sales.
Gross margins during the quarter increased 30 basis points year over year to 35.6%. Lower freight costs backed the upside. However, this was partially offset by the unfavorable impact of increased shrink and promotional activity on a year-over-year basis.
Adjusted net income during the quarter came in at $163.6 million compared with $193.5 million reported in the prior year quarter.
Adjusted EBITDA in the fiscal second quarter came in at $248.8 million compared with $290.6 million reported in the prior-year quarter.
Balance Sheet
As of Jul 29, 2023, cash and cash equivalents totaled $311.3 million compared with $399.9 million on Jul 30, 2022.
Merchandise inventories during the quarter came in at $1,309 million compared with $1,304.6 million reported in the prior-year period.
As of Jul 29, 2023, Long-term debt net stood at $583.7 million compared with $683.1 million reported in the prior year quarter.
The company declared a cash dividend of 9 cents per share. The dividend will be paid out on Oct 11, 2023, to shareholders on record as of Sep 13, 2023.
Fiscal 2023 Outlook
For fiscal 2023, the company expects net sales to be between $6.2-$6.4 billion. The company expects comparable sales to decline between 7.5% and 4.5% on a year-over-year basis.
The gross margin rate in fiscal 2023 is expected to be between 34% and 34.4%. Capital expenditures during the year are anticipated in the range of $200-$250 million. The company expects 2023 adjusted net income to lie between $545 and $600 million in fiscal 2023.
Adjusted free cash flow during the year is expected to be between $400 and $450 million. The company anticipates 2023 Adjusted EPS to be in the range $6.95-$7.65, up from the prior projection of $6.80-$7.50.
Zacks Rank & Key Picks
Academy Sports currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are:
Royal Caribbean Cruises Ltd. (RCL - Free Report) sports a Zacks Rank #1 (Strong Buy). RCL has a trailing four-quarter earnings surprise of 28.5% on average. Shares of RCL have gained 141.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates a rise of 54.5% and 180.3%, respectively, from the year-ago period’s levels.
Trip.com Group Limited (TCOM - Free Report) flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 147.9% on average. Shares of TCOM have increased 53.1% in the past year.
The Zacks Consensus Estimate for TCOM’s 2023 sales and EPS indicates a rise of 104.9% and 537.9%, respectively, from the year-ago period’s levels.
Skechers U.S.A., Inc. (SKX - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 39.1% on average. Shares of SKX have increased 34.1% in the past year.
The Zacks Consensus Estimate for SKX’s 2023 sales and EPS indicates a rise of 8.7% and 42%, respectively, from the year-ago period’s levels.