Academy Sports & Outdoors topped earnings estimates and narrowly missed on revenue with its second-quarter results Wednesday. The company also revised its full-year guidance, increasing its earnings predictions. ASO stock jumped Wednesday.
Academy Sports & Outdoors Earnings
Estimates: Wall Street forecast Academy Sports earnings would fall 12% to $2.06 per share. Revenue was expected to drop 5% to $1.7 billion. Analysts predict same-store sales will decrease 5.5% in the second quarter.
Results: Academy Sports earnings fell 1.7% to $2.30 per share in the second quarter while revenue declined 5.8% to $1.69 billion. Same-store sales decreased 6%.
"Our performance this quarter was in line with our expectations as Academy continues to substantially outperform our pre-pandemic levels of sales and profits." CEO Ken Hicks said in a statement.
"We remain confident that the durability of our strong assortments and everyday value model positions us well to deliver consistent sales and profitability growth going forward," he added.
Outlook: ASO increased its full-year EPS forecast while reiterating its net and same-store sales guidance. Academy Sports now expects adjusted EPS of $6.75-$7.50 vs. $6.55-$7.25 previously. This comes after it cut full-year guidance in June.
ASO Stock: Shares leapt 14% to 47.81 during Wednesday's market trading. ASO stock closed Tuesday down 1.8% to 41.93, just below its 50-day line.
In a better market, this could be flashing an early entry, rebounding off the 50-day line and breaking the downtrend in a handle. The official buy point is 50.10.
Academy Sports stock rose to 50 intraday on Aug. 16, just below the late November peak of 51.08, but has been trending lower since.
Katy, Texas-based Academy Sports is a regional sporting goods retailer that operates 263 stores in 17 states, with distribution centers in Texas, Georgia and Tennessee.
Profits and revenue declined in Q1 for the first time in several quarters. However, ASO still beat earnings and sales estimates. The company's earnings dropped 8% to $1.73 per share while revenue fell 7% to $1.47 billion. Same-store sales declined 7.5%.
Like Dick's Sporting Goods, ASO lowered its full-year earnings outlook, citing "macroeconomic challenges." The company narrowed its adjusted diluted EPS to $6.55-$7.25 per share from $6.70-$7.25 per share. Academy Sports also revised its total net sales, expecting $6.43 billion-$6.63 billion and a 3%-6% decline in same-store sales.
ASO stock has an 86 Composite Rating out of 99. It has a 91 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The rating shows how a stock's performance over the last 52 weeks holds up against all the other stocks in IBD's database. The EPS rating is 91.
Hibbett edged up 3.7% Wednesday while DKS stock popped 5%. Both are rebounding from their 21-day moving averages, above their 200-day lines.
Retail Environment
ASO comes on the heels of fellow sporting goods retailers Dick's Sporting Goods and Hibbett raising full-year outlooks in late August.
It has generally been a tough environment for retailers as concerns remain about a slowdown in consumer spending and a recession for the U.S. economy. Interest rates have also spiked as expectations grow that inflation will stay high.
Retailers have posted mixed recent quarterly results. Retail giant Walmart topped earnings estimates while Target missing on earnings but met revenue predictions.
Off-price specialist TJX also recently missed on revenue, while both Ross Stores and Kohl's cut guidance.
BJ's Wholesale Club also beat earnings views, as the discount giant shrugged off concerns that inflation would keep consumers away.
The industry broadly reflected a consumer pivot to essentials, as prices generally pressed higher. However, sporting goods retailers seem to be managing the difficult consumer environment.
Hibbett reported on Aug. 25 that its total net sales are expected to increase in the low-single digit range and reaffirmed its earnings guidance in the range of $9.75 — $10.50 per share.
Meanwhile Dick's, after slashing its guidance in May, narrowed its full-year same-store sales guidance and raised its full-year EPS guidance slightly to $10-$12 per share.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
