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Academy Sports (ASO) Q3 Earnings & Revenues Lag Estimates
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Academy Sports and Outdoors, Inc. (ASO - Free Report) reported dismal third-quarter fiscal 2023 results, with earnings and revenues missing the Zacks Consensus Estimate. Also, the top and the bottom line declined on a year-over-year basis. The downside was primarily caused by weakening consumer sentiment and a lack of a natural shopping calendar event. Also, softer sales in fall seasonal categories added to the downside.
Earnings & Revenues Details
During the fiscal third quarter, the company reported adjusted earnings per share (EPS) of $1.38, missing the Zacks Consensus Estimate of $1.64. In the prior-year quarter, ASO reported an adjusted EPS of $1.67.
Quarterly revenues of $1,397.8 million missed the Zacks Consensus Estimate of $1,455 million by 3.9%. The top line fell 6.4% on a year-over-year basis. The downside was mainly caused by a fall in comparable sales.
Academy Sports and Outdoors, Inc. Price, Consensus and EPS Surprise
Comparable sales during the quarter declined 8% year over year compared with a 7.2% fall reported in the prior-year quarter. The downside was caused by an 8.1% year-over-year decline in transactions. However, this was partially offset by a slight increase in ticket size.
Operating Highlights
During the fiscal third quarter, Selling, general and administrative expenses came in at $345.9 million compared with $342.9 million reported in the prior-year quarter. The upside can be attributed to a rise in investments in the areas of new stores, omnichannel, supply chain and customer data.
Gross margins during the quarter declined 50 basis points year over year to 34.5%. Softer sales with respect to the high-margin fall seasonal products added to the downside.
Adjusted net income during the quarter came in at $104.7 million compared with $136.3 million reported in the prior-year quarter.
Adjusted EBITDA in the fiscal third quarter came in at $174.5 million compared with $214.9 million reported in the prior-year quarter.
Balance Sheet
As of Oct 28, 2023, cash and cash equivalents totaled $274.8 million compared with $318.2 million on Oct 29, 2022.
Merchandise inventories during the quarter came in at $1,492.2 million compared with $1,495.5 million reported in the prior-year period.
As of Oct 28, 2023, the long-term debt net stood at $583.4 million compared with $682.8 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 Jan 10, 2024, to shareholders on record as of Dec 13, 2023.
Fiscal 2023 Outlook
For the fiscal 2023, the company expects net sales to be $6.1-$6.2 billion. The company expects comparable sales to decline between 7.5% and 6.5% on a year-over-year basis.
The gross margin rate in fiscal 2023 is expected to be between 34% and 34.2%. Capital expenditures during the year are anticipated in the range of $175-$225 million. The company expects 2023 adjusted net income to be between $545 million and $555 million in the fiscal 2023.
Adjusted free cash flow during the year is expected to be between $300 million and $350 million. The company anticipates 2023 Adjusted EPS to be in the range of $7.05-$7.20 compared with the prior projection of $6.95-$7.65.
Zacks Rank & Key Picks
Academy Sports currently has a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS indicates a rise of 57.7% and 187.9%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 37.5% on average. Shares of LYV have increased 13.9% in the past year.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates a rise of 28.6% and 132.8%, respectively, from the year-ago period’s levels.
Skechers U.S.A., Inc. (SKX - Free Report) carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 50.3% on average. Shares of SKX have increased 36.3% in the past year.
The Zacks Consensus Estimate for SKX’s 2023 sales and EPS indicates a rise of 8.2% and 44.5%, respectively, from the year-ago period’s levels.
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Academy Sports (ASO) Q3 Earnings & Revenues Lag Estimates
Academy Sports and Outdoors, Inc. (ASO - Free Report) reported dismal third-quarter fiscal 2023 results, with earnings and revenues missing the Zacks Consensus Estimate. Also, the top and the bottom line declined on a year-over-year basis. The downside was primarily caused by weakening consumer sentiment and a lack of a natural shopping calendar event. Also, softer sales in fall seasonal categories added to the downside.
Earnings & Revenues Details
During the fiscal third quarter, the company reported adjusted earnings per share (EPS) of $1.38, missing the Zacks Consensus Estimate of $1.64. In the prior-year quarter, ASO reported an adjusted EPS of $1.67.
Quarterly revenues of $1,397.8 million missed the Zacks Consensus Estimate of $1,455 million by 3.9%. The top line fell 6.4% on a year-over-year basis. The downside was mainly caused by a fall in comparable sales.
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
Comparable sales during the quarter declined 8% year over year compared with a 7.2% fall reported in the prior-year quarter. The downside was caused by an 8.1% year-over-year decline in transactions. However, this was partially offset by a slight increase in ticket size.
Operating Highlights
During the fiscal third quarter, Selling, general and administrative expenses came in at $345.9 million compared with $342.9 million reported in the prior-year quarter. The upside can be attributed to a rise in investments in the areas of new stores, omnichannel, supply chain and customer data.
Gross margins during the quarter declined 50 basis points year over year to 34.5%. Softer sales with respect to the high-margin fall seasonal products added to the downside.
Adjusted net income during the quarter came in at $104.7 million compared with $136.3 million reported in the prior-year quarter.
Adjusted EBITDA in the fiscal third quarter came in at $174.5 million compared with $214.9 million reported in the prior-year quarter.
Balance Sheet
As of Oct 28, 2023, cash and cash equivalents totaled $274.8 million compared with $318.2 million on Oct 29, 2022.
Merchandise inventories during the quarter came in at $1,492.2 million compared with $1,495.5 million reported in the prior-year period.
As of Oct 28, 2023, the long-term debt net stood at $583.4 million compared with $682.8 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 Jan 10, 2024, to shareholders on record as of Dec 13, 2023.
Fiscal 2023 Outlook
For the fiscal 2023, the company expects net sales to be $6.1-$6.2 billion. The company expects comparable sales to decline between 7.5% and 6.5% on a year-over-year basis.
The gross margin rate in fiscal 2023 is expected to be between 34% and 34.2%. Capital expenditures during the year are anticipated in the range of $175-$225 million. The company expects 2023 adjusted net income to be between $545 million and $555 million in the fiscal 2023.
Adjusted free cash flow during the year is expected to be between $300 million and $350 million. The company anticipates 2023 Adjusted EPS to be in the range of $7.05-$7.20 compared with the prior projection of $6.95-$7.65.
Zacks Rank & Key Picks
Academy Sports currently has a Zacks Rank #3 (Hold).
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 28.3% on average. Shares of RCL have surged 77.6% 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 57.7% and 187.9%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 37.5% on average. Shares of LYV have increased 13.9% in the past year.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates a rise of 28.6% and 132.8%, respectively, from the year-ago period’s levels.
Skechers U.S.A., Inc. (SKX - Free Report) carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 50.3% on average. Shares of SKX have increased 36.3% in the past year.
The Zacks Consensus Estimate for SKX’s 2023 sales and EPS indicates a rise of 8.2% and 44.5%, respectively, from the year-ago period’s levels.