Academy Sports + Outdoors reported 1st quarter financial results. Sales decreased 7.1% to $1.47 billion compared to $1.58 billion last year. The decline of sales was primarily due to the strong 38.9% increase in comparable store sales last year’s first quarter. This year comparable store sales decreased 7.5%.
Net income for the quarter was a decrease of 15,7% to $149.8 million compared to $177.8 million. Fully diluted earnings per share was$1.69 compared to $1.84 per share. Management now projects to earn $6.30 to $7.00 per share based on 68.0 million diluted weighted average shares outstanding.
The big news was the strong opening of the first new store that opened April 23, 2022 in Conyers, Ga. (Greater Atlanta area). The store is 58,000 square feet in size and the prototype for new stores that will open in the next five years. There are now 260 stores in operation. Management projects at least 8 new stores in 2022 and 80 to 100 stores in the next five years. Until now Academy stores were in 16 contiguous states, but this year the company will open stores in Virginia and West Virginia. This is one of the major growth factors for the company, and first opening was very successful. There are now 10 stores in the greater Atlanta area, and an 11th store will be added by the end of the fiscal year.
While the new store is a major growth factor, there are several other drivers. The company is now seeing good traction with e-commerce sales which accounts for 18% of total revenues. Internet sales are likely to growth as the company intensifies internet sales promotions. Customers from the existing trading areas are good customers and the company has even seen some demand for special items such as cleats from outlaying states.
Academy also expects to explore some new businesses. In addition, management indicated that it was focusing on improving their supply chain and they are writing more contracts with shippers to avoid surprises. In addition, more work has to be done by the IT team to improve productivity.
Ken Hicks, Chairman and CEO of the company stressed that “the Company continuous to position itself for long-term growth and expansion, as we executed effectively in a highly dynamic environment and against a very strong prior year quarter.” Michael Mullican, EVP and CFO
POSTSCRIPT: Academy Outdoors + Sports has a very strong team under Ken Hick’s direction. Growth plans for rapid expansion will make this soon a national company. Their focus is on key categories of outdoor, apparel, footwear and sports & recreation with national and private brands. I am optimistic that the company will beat their estimates.