Academy Sports + Outdoors Reveals Q2 Results and Future Plans

Academy Sports + Outdoors Reports Second Quarter Financial Results

Net Sales Decline of (2.2)%; Comparable Sales of (6.9)%

GAAP Diluted Earnings Per Share (EPS) of $1.95, Adjusted Diluted EPS of $2.03

Year-to-Date Adjusted Free Cash Flow up by 60%; $107 Million Returned to Shareholders in Q2

Guidance for Fiscal 2024 Revised; Gross Margin Rate Guidance Reaffirmed

KATY, Texas – Academy Sports and Outdoors, Inc. (NASDAQ: ASO) has shared its financial performance for the second quarter ending August 3, 2024. The company has showcased a mixed bag of results but emphasized growth in several strategic initiatives.

Performance Insights from the Leadership

Steve Lawrence, the Chief Executive Officer of Academy, noted progress against their strategic goals, which includes the opening of nine new stores in the coming quarter, enhancing omni-channel experiences like Door Dash, and launching an engaging loyalty program. "We remain focused on attracting more customers to our physical and online shopping areas by refining our marketing strategies, maximizing our cash generation, and continuing investments that support our long-term growth and shareholder value," he commented.

Operating Results Overview

During the second quarter, Academy reported a net sales figure of $1,549 million, marking a decrease of 2.2% compared to the previous year. The comparable sales during this period dropped by 6.9%, a scenario reflective of current economic challenges along with seasonal impacts.

Fiscal Year Projections

Looking ahead, Academy's management is revising its expectations for the fiscal year. The company reiterated its commitment to improving the gross margin rate. The response to ongoing economic challenges and an active storm season has led to this cautious adjustment, ensuring that Academy remains competitive and responsive to market changes.

Store Expansion Plans and Market Strategies

In commitment to expanding its footprint, Academy has already opened three stores in the current fiscal year and aims to launch between 15 to 17 new stores by the end of 2024. This impressive expansion speaks to the company’s robust growth trajectory and its aim to enhance accessibility to its customer base.

Cash Flow and Capital Allocation

Academy's year-to-date adjusted free cash flow rose significantly by 60%. This was further utilized to enhance shareholder returns, with $107 million executed in the second quarter alone, through share repurchases and dividends.

Financial Discipline amid Challenges

Despite confronting unexpected challenges, including a temporary backlog at its distribution center attributed to new systems rollout and adverse weather conditions, Academy has reported strong controls over its inventories which helped mitigate potential losses.

Outlook for the Future

The CFO, Carl Ford, underlined the need for stringent expense management while targeting growth. The financial health of Academy underscores its robust position in the industry, paving the way for successful strategic deployments and potential market expansions.

Frequently Asked Questions

1. What were the key financial results for the second quarter?

Academy reported a net sales figure of $1,549 million and a GAAP diluted EPS of $1.95.

2. How is Academy handling its future growth?

The company plans to open between 15 to 17 new stores by the end of 2024 while focusing on enhancing customer experiences.

3. What are their current challenges?

Academy faced challenges such as economic headwinds and operational disruptions from a new distribution center management system.

4. What is Academy's strategy for customer engagement?

Academy aims to improve customer traffic through targeted marketing and the launch of a new loyalty program.

5. How are they returning capital to shareholders?

$107 million was returned to shareholders in the second quarter through share repurchases and dividends.

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