Sports and Outdoor Academy, Vista Outdoor, Acushnet Holdings and YETI Holdings

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Chicago, IL – October 11, 2021 – Today Zacks Equity Research discusses leisure and leisure products including Academy Sports and Outdoors, Inc. ASO, Vista Outdoor Inc. VSTO, Acushnet Holdings Corp. GOLF and YETI Holdings, Inc. (YETI).

Link: https://www.zacks.com/commentary/1808184/4-top-picks-from-the-booming-leisure-recreation-products-industry

Zacks’ leisure and leisure products industry continues to benefit from strong demand for leisure products and golf activities. Industry participants, who design, market, retail and distribute products for the outdoor and recreation market, are experiencing strong demand. Golf manufacturers and boat suppliers are profiting from the coronavirus pandemic.

An increase in sales of fitness products due to the growing awareness of health and fitness among people is promoting the industry. With the restrictions relaxed, Americans are venturing out and engaging in outdoor recreation.

This, in turn, has constantly driven demand. Actions of which Sports and outdoor academy, Vista Exterior, Acushnet Holdings and YETI Holdings are likely to benefit from the aforementioned industry trends.

Industry Description

The Zacks Leisure and Leisure Products industry includes companies that provide entertainment and leisure products including swimming pools, marine products, golf courses, boat repair and maintenance services and other ancillary services, including indoor and outdoor storage, and marine, as well as boat and personal watercraft rentals.

Some of the industry participants manufacture outdoor gear and clothing for rock climbing, mountaineering, hiking and skiing. Some companies also offer connected fitness products and subscriptions for multiple home users. Industry players primarily thrive on overall economic growth, which fuels consumer demand for the products. In fact, demand, which is heavily dependent on business cycles, is driven by a healthy labor market, rising wages and growing disposable income.

4 trends shaping the future of the leisure and leisure products industry

Boat suppliers witnessing a strong demand: New boat sales have risen sharply amid the coronavirus pandemic. In fact, boat sales have been exploding since the end of April last year and some dealers are struggling to stock up.

According to reports from the National Marine Manufacturers Association (NMMA), retail unit sales of new powerboats increased 12% in 2020 from the previous year. More than 310,000 new motorboats were sold in 2020, compared to 178,000 and 286,000 boats sold in the United States in 2010 and 2012, respectively. In fact, boat sales in the United States are at a 13-year high.

Momentum continues into 2021. According to the Marine Retailers Association of America, 95% of the world’s boats are made in the United States. According to ResearchAndMarkets, the boat repair market is expected to grow from $ 6.33 billion in 2020 to $ 6.81 billion in 2021, with a CAGR of 7.6%. The market is expected to reach $ 8.75 billion in 2025, with a CAGR of 6.5%.

Booming golf activity: The golf industry is doing exceptionally well in the midst of the pandemic. Golf benefits from an increase in youth participation. According to Golf Datatech and its National Golf Performance Report 2020, 2020 rounds increased 13.9%, while equipment sales jumped 10.1% in 2020. The 10.1% increase in retail sales broke the previous record gain of 10% in 2005.

According to the National Golf Foundation, more than 24.8 million people played golf in the United States in 2020, up 2% year-over-year – the largest increase in 17 years. The strong demand for golf continues into 2021.

In recent times, the golf industry has benefited from a strong participation of millennials. Technology has also played a vital role in the overhaul of golf. Meanwhile, India and China have become two of golf’s biggest emerging markets.

Recovery of the economy: The industry should benefit from the drop in the unemployment rate. Recently, Automatic Data Processing released a report on private sector payroll. The ADP’s national employment report showed private payrolls gained 568,000 jobs last month, which was better than expectations of 425,000 and the downwardly revised 340,000 the previous month.

Liquidity, a major factor during a pandemic: Maintaining liquidity has become a Herculean task for a number of industry participants in the current scenario. Most companies cut wages and lay off their employees. Industry participants are also suspending share buyback programs and dividend payments in an attempt to improve liquidity.

Zacks industry rankings show bright prospects

Zacks’ leisure and leisure products industry is clustered within the larger consumer discretionary industry.

The group’s Zacks Industry Rank, which is essentially the average of the Zacks Rank of all member stocks, indicates good prospects for the near term.

The leisure and leisure products industry is currently ranked 44th in the Zacks industry, which places it in the top 17% of over 252 Zacks industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s position in the top 50% of industries ranked by Zacks is the result of positive earnings prospects for all of the constituent companies. Looking at revisions to overall earnings estimates, it appears that analysts are gradually gaining confidence in the earnings growth potential of this group. Since March 31, 2021, the industry’s profit estimate for the current year has increased by 33.2%.

Before we feature a few industry stocks that you might want to consider, let’s take a look at the recent market performance and industry valuation.

Industry underperforms the S&P 500

Zacks’ leisure and leisure products industry has underperformed Zacks S&P 500 composite and its industry over the past year. Industry stocks have collectively fallen 38.9% over the past year against the S&P 500’s 29% rally. Zacks’ consumer discretionary sector has risen 8.4% over the same period .

Evaluation

Based on the 12-month futures price / earnings ratio, which is a multiple commonly used to value leisure stocks stocks, the sector is trading at 15.28X versus 20.84X for the S&P 500 and 30.08X for the area. Over the past five years, the industry has traded up to 44.8X and up to 12.36X with the median being at 15.28X.

4 stocks of leisure and leisure products to watch out for

Sports and outdoor academy: Headquartered in Katy, Texas, the company, through its subsidiaries, operates as a retailer of sporting goods and outdoor recreation products in the United States. It enjoys strong consumer demand in all markets and commodity divisions, primarily Sports & Recreation. The increase in demand for indoor and outdoor games, bicycles, fitness equipment and outdoor cooking bodes well.

Over the past six months, shares of this company Zacks Rank # 1 (Strong Buy) have jumped 65.7%, compared to an industry decline of 38.9%. Zacks’ consensus estimate for 2021 has been revised upwards by 20% in the past 30 days. You can see The full list of today’s Zacks # 1 Rank stocks here.

Outside view : This Anoka, Minnesota-based company designs, manufactures and markets several consumer products to the outdoor sports and recreation markets in the United States and around the world. This Zacks Rank # 2 (Purchase) company enjoys a strong business model, product offering and expanding e-commerce capabilities.

Zacks’ consensus estimate for 2021 earnings has been revised up 72.5% in the past 90 days. The stock gained 95% last year.

Acushnet Holdings: This Fairhaven, MA-based company designs, develops, manufactures and distributes golf products in the United States, Europe, the Middle East, Africa, Japan, Korea and overseas. Zacks Rank # 2 is expected to benefit from an increase in demand for golf balls. It benefits from a healthy order book, strong immediate demand, reduced channel inventories and a gradual increase in production levels.

The company is also enjoying strong demand for its Pro V1 franchise. Zacks’ consensus estimate for 2021 has been revised up 3.7% in the past 30 days. The stock has appreciated 41% over the past year.

YETI Holdings: This Austin, Texas-based company designs, markets, retails and distributes products for the outdoor and leisure market under the YETI brand. Zacks Rank # 2 Company continuously invests in global product and channel expansion, innovative marketing and growing digital capabilities, including improved data analytics. Zacks’ consensus estimate for 2021 has been revised up 5.1% in the past 30 days. The stock has gained 72.2% in the past year.

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Academy Sports and Outdoors, Inc. (ASO): Free Stock Analysis Report

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