Academy Sports + Outdoors posts record results

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Academy Sports + Outdoors posted strong fourth quarter and year-end results, both up and down, seeing consumers enthusiastically participate in sports and enjoy the great outdoors again after months of pandemic living at home.

Executives at the Katy, Texas-based sporting and outdoor recreation chain said on Tuesday they expect another strong year for the company, marked by a return to store openings , although 2022 will not be as robust as 2021 .

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For the fourth quarter ended Jan. 29, net income rose 54.9% to $141.8 million from $91.5 million a year earlier. Diluted earnings per share were $1.57 compared to $0.97 per share.

Pretax profit rose 55% to $188.4 million from $121.6 million.

Wall Street rewarded the Academy, sending the stock up 8.8%, or $3.19 to $139:40 mid-afternoon, Nasdaq trading on Tuesday.

For the whole of last year, net income rose 117.4% to $671.4 million from $308.8 million the previous year, making 2021 the most profitable year ever. of the company’s history. Diluted EPS was $7.12 compared to $3.79 per share. Pretax profit rose 153.5% to $859.5 million, the highest in company history.

Ken Hicks, President and CEO, said in a statement that “2021 has been an extraordinary year for Academy Sports + Outdoors. The team achieved the highest sales and profits in company history while overcoming the many challenges facing business and the retail industry.

“We are proud of what our business has accomplished over the past three years, but even more excited about our prospects for future growth. Academy is well positioned for substantial long-term growth in its existing stores thanks to our wide assortment of excellent products from the best national and quality private brands, excellent customer service, expanding omnichannel capabilities and multiple new store openings. in our current and new markets.

Net sales in the fourth quarter rose 13.2% to a quarterly record of $1.8 billion. Compared to the fourth quarter of 2019, net sales increased by 32%. Same-store sales rose 13.1%, on top of a 16.1% gain in the fourth quarter of 2020, making it the retailer’s 10th straight quarter of positive same-store sales. The company operates 259 stores in 16 states and an e-commerce site.

“We’ve seen a pretty good balance between our four merchandise categories,” Merchandising Director Steve Lawrence told WWD in an interview.

He said the top-selling areas last quarter were apparel, up 20% and driven by fleece, and footwear, up 14%, driven by performance and running footwear. The three main brands were Nike, Adidas and Under Armour. The Yellowstone licensed apparel, based on the drama series airing on the Peacock Network, was also strong.

Within durable goods, the outdoor category increased 10% and sports and recreation increased 8%.

About 55% of Academy’s volume is in consumer goods and 45% in durable goods.

Executives characterized Academy Sports + Outdoors as having a solid foundation and growth momentum and preparing to open 80-100 stores over the next five years, including entering the Virginia and Virginia markets for the first time. Western. The company has 259 stores in 16 states and plans to open eight this year.

In late April, Academy will open its first new store in two years, in Conyers, Ga., a suburb of Atlanta. It will mirror the prototype launched in 2019. It is marked by lower fixtures and larger panels on the walls for better visibility and easier navigation; natural lighting with more windows; faster checkouts with a single queue leading to multiple registers; more mannequins and a flexible layout with light fixtures on wheels so that merchandise areas can be expanded or reduced according to sales trends. Academy stores average approximately 60,000 square feet, and are all non-mall and located in lifestyle and strip malls.

During the pandemic, Academy worked on pricing optimization, planning and upgrades to the allocation system, strengthening relationships with key national brands such as Nike and others who reduced distribution but remained with Academy; payment options added; launched a new mobile app and redesigned marketing to be more digital and targeted.

Academy also benefits from the fact that Americans gravitate towards well-being; sports and hobbies, such as pickleball, biking, and fishing; outdoor activities such as grilling and getting more exercise in general. “A lot of those trends persist, whether it’s the training regimen or some of the hobbies they’ve chosen,” Lawrence said.

This year, a major project, in addition to the deployment of stores, is to improve the logistics of transporting goods from suppliers to distribution centers. “We’re looking at all the elements of the supply chain and how to get goods through faster and more efficiently,” Lawrence said. “We already have a good supply chain, but there are more opportunities to do more cross-docking, to store and sort things better in distribution centers, and to move goods faster, more efficiently. and at lower cost.

Asked about the company’s situation with its inventory, in light of supply chain bottlenecks, Lawrence said that at the end of the fourth quarter, inventory was up about 18% from in the prior year quarter, but still down from 2019.

“If you browse our stores, you’ll see we’re in a pretty good stock position in most categories,” Lawrence said, though he noted that merchandise is light on the hunt, especially with ammunition and firearms.

Asked about the impact of inflation on the business, Lawrence said: “Durable goods have seen the price [increases] hit a little faster than soft products. We’ve seen more of this in durable goods, but all areas are feeling it. But we are not asking the customer to simply pay more for the same product. We add more branding, more details in what we sell. Academy pricing focuses on offering everyday values ​​and muted promotions compared to competitors.

He also said the company was able to reduce promotions as demand and traffic were higher at the Academy due to tighter brand distribution elsewhere.

For all of 2021, net sales increased 19.1% to a record $6.77 billion. Compared to fiscal 2019, net sales increased by 40.2%. Comparable sales increased by 18.9% in addition to the 16.1% of the previous year.

During the fourth quarter, e-commerce sales increased 22.7% from the prior year quarter and 97.2% from the fourth quarter of 2019. For the full year, e-commerce sales increased 6.2% from 2020 and 153.1% from 2020 to 2019.

Citing headwinds, the company now expects net sales of between $6.56 billion and $6.77 billion for 2022, down 1.6% from 2021 but gaining 38% compared to 2019.

Comparable sales in 2022 are expected to decline between minus 4% and minus 1%.

Net income is expected to be $590 million to $640 million, down 8.3% from $671 million in 2021.

Pretax profit is projected between $780 million and $845 million, compared to $860 million last year.

Michael Mullican, Executive Vice President and Chief Financial Officer, said, “For the second consecutive year, Academy delivered record financial results, driven by a dedicated and adaptable team, sustainable operational improvements and strong consumer demand. Going forward, we are focused on building on this success by executing our internal initiatives, managing our expenses and deploying our free cash to grow the business and improve shareholder value. Our outlook for 2022 reflects an expectation of strong financial performance and continued operational improvements, while carefully considering headwinds from inflation, supply chain bottlenecks and the prospect of tough comparisons with the previous years.

Inside the Academy Sports + Outdoors store in Richmond, Texas.

Inside the Academy Sports + Outdoors store in Richmond, Texas.

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