Sports + Outdoors Academy reported 1st quarterly financial results. Sales fell 7.1% to $1.47 billion from $1.58 billion a year ago. The decline in sales is mainly attributable to the strong increase of 38.9% in comparable store sales in the first quarter of last year. This year, comparable store sales were down 7.5%.
Net income for the quarter decreased 15.7% to $149.8 million from $177.8 million. Diluted earnings per share were $1.69, compared to $1.84 per share. Management now expects to earn between $6.30 and $7.00 per share based on 68.0 million diluted weighted average shares outstanding.
The big news was the grand opening of the first new store which opened April 23, 2022 in Conyers, GA (Greater Atlanta area). The store is 58,000 square feet in size and is the prototype for new stores that will open within the next five years. There are now 260 stores in operation. Management expects at least 8 new stores in 2022 and 80 to 100 stores in the next five years. Until now, Academy stores have been in 16 contiguous states, but this year the company will open stores in Virginia and West Virginia. This is one of the main growth factors for the company, and the first opening was very successful. There are now 10 stores in the greater Atlanta area and 11e store will be added by the end of the fiscal year.
Although the new store is a major growth driver, there are several other drivers. The company is now seeing good traction with e-commerce sales accounting for 18% of total revenue. Internet sales are likely to grow as the company intensifies Internet sales promotions. Customers in existing trade areas are good customers and the company has even seen some demand for specialty items such as cleats from spendthrift states.
Academy also expects to explore new ventures. Additionally, management has indicated that it is focused on improving its supply chain and is writing more contracts with shippers to avoid surprises. Additionally, the IT team needs to do more work to improve productivity.
Ken Hicks, the company’s president and chief executive, noted that “the company continues to be positioned for long-term growth and expansion as we have executed effectively in a very dynamic environment and against a very good quarter of the previous year”. Michael Mullican, Executive Vice President and Chief Financial Officer
POST SCRIPTUM : Academy Outdoors + Sports has a very strong team under the leadership of Ken Hick. Growth plans for rapid expansion will soon make it a national company. They focus on the key outdoor, apparel, footwear and sports & leisure categories with national and private labels. I am optimistic that the company will beat its estimates.