Investors can look forward to a great year with much good news from Academy Sports & Outdoors.
- Sales rose by 44.5% in the past two years, and sales increased by 11.5%.
- Full-year diluted earnings per share increased from $5.45 to 5.80, from $4.15-$4.50. This is quite an increase!
- The company has authorized share repurchases of up to $500 million. Investors should feel confident that cash is available to them.
- The company will open eight new Academy units in fiscal 2022 and could open additional stores. In 16 states, 259 units are currently in operation.
- The company had $ 553.8 million in cash and cash equivalent at the end of the quarter. It was upgraded by S & P from B and Moody’sMCO -3.3% (Baa3 form B1).
These five facts are optimistic about the company’s prospects. Net sales rose 11.5% to $1.79 billion, an all-time high quarterly record. Sales increased 44.8% compared to the second quarter of 2019, the last year before the pandemic. Comparable sales increased by 11.4% over 27% in 2018. The sustained strength of the outdoor recreation and sporting goods market drove sales. Strong demand was seen for apparel, footwear, fitness, and team sports. After growing by 210.3% during the previous quarter, e-commerce sales fell 0.9%. Compared to the second quarter of 2019, internet sales rose 207.2%
As mentioned above, earnings guidance was significantly raised. Management expects fiscal 2021 net sales to range from $6.5 billion to $6.9 billion, compared to $5.689 Billion for 2020 and $4.830 for 2019. Expected diluted earnings per share will range from $5.45 to $5.80. This compares to $3.79 in fiscal 2020 and $1.60 for fiscal 2019.
So far, so good. Management’s constant comments at the analyst meeting about work to do gave me confidence in expecting solid earnings growth due to the earnings opportunities. Management realized that different sports could be found in other regions and decided to localize their merchandise. Fishing requires unique lures. Different sports require additional equipment. It was pointed out that Northern stores must have snow boots, skis, and sleds. Hockey is another Northern sport. Management wants to improve its supply chain, which must be fixed for most retailers. Management sees the need for improved service, including more training and marketing. Although it is hard work, I see great results under Ken Hicks as CEO and President.
Ken Hicks stated that Academy Sports + Outdoors delivered the most significant quarterly financial results in company history. We surpassed last year’s strong store comparisons. We will continue to build on our success by focusing more on the business basics and investing in strategic areas to increase sales, market share, and profit growth. It is also exciting to announce that our share repurchase program has been approved. This program reflects Academy’s current strength and our confidence in its future.
POST SCRIPT Academy was only available in 16 states. I see the potential to expand into other states and fill existing conditions with more stores. A 40,000-square-foot unit is available for filling in. The company’s regular stores range in size from 60,000 to 62,000 feet. According to management, it can accommodate 100 more stores without additional facilities. As the company grows and sophisticatedizes, I expect continued growth over the next few years.
