Academy Sports Dips as Revenue Miss Clouds Profit Beat
Shares fall after the sporting goods retailer reports a 0.9% decline in comparable sales, signaling cautious consumer spending ahead of the holiday season.
Academy Sports & Outdoors Inc. (ASO) shares slipped in early trading after the company reported third-quarter revenue that fell short of Wall Street estimates and a decline in same-store sales, overshadowing a better-than-expected profit.
The sporting goods retailer announced adjusted earnings of $1.14 per share, comfortably beating the analyst consensus of $1.07. However, the market focused on the top-line weakness, as revenue of $1.38 billion missed the $1.40 billion forecast. The results sent shares down as investors weighed the impact of cautious consumer spending on the retail sector.
Driving the investor concern was a 0.9% decline in comparable sales, a key metric for retail health that tracks sales at stores open for at least a year. While total net sales saw a 3.0% increase, the dip in comp sales pointed to underlying softness in consumer demand for discretionary goods.
In a statement, Academy Sports executives highlighted bright spots, including a robust 22.2% increase in e-commerce sales and strong performance from newly opened stores, which are seeing high single-digit comparable sales growth. The company has been executing a strategy of expanding its physical footprint, with plans to open 20 to 25 new stores in the next fiscal year.
Despite the challenging quarter, the company maintained its full-year adjusted earnings forecast of $5.65 to $6.15 per share. It did, however, narrow its net sales outlook to a range of $6.025 billion to $6.200 billion, according to its official press release.
The mixed results from Academy Sports reflect a broader trend across the retail landscape, where consumers, facing persistent inflation and economic uncertainty, are prioritizing essential purchases over discretionary items like sporting goods and outdoor gear. The upcoming holiday season will be a critical test for the company and its peers.
Analysts have a generally positive outlook on the stock, with a consensus price target of around $57.30, suggesting potential upside from its current levels. However, the latest results have introduced a note of caution. The revenue miss and negative comparable sales overshadowed the profit beat for many investors, as reported by Benzinga, leading to the initial bearish reaction in the market.
Academy's stock, trading on the Nasdaq, has a 52-week range of $33.15 to $60.75. The company, which operates primarily in the southern and midwestern United States, competes with other major sporting goods retailers like Dick's Sporting Goods. Its ability to navigate the shifting consumer landscape and successfully execute its store expansion strategy will be key to its performance in the coming quarters.