Academy Sports (ASO) Q4 Earnings Miss, Net Sales Top Estimates
Academy Sports and Outdoors, Inc. ASO reported mixed fourth-quarter fiscal 2023 results, with earnings missing the Zacks Consensus Estimate and net sales surpassing the same. The top and the bottom lines grew on a year-over-year basis.
The results reflect sequential as well as year-over-year increases in comparable sales, attributable to normalizing consumer sentiments and the company’s resilient business initiatives. Also, long-term investment plans and brand image position the company well to witness growth prospects in 2024 and beyond, along with ensuring shareholder value.
However, an increase in costs and expenses given the risky macroeconomic backdrop dented the bottom line of the company in the quarter.
Following the announcement, ASO stock declined 9.6% during the trading hours on Mar 21.
Inside the Headlines
During the fiscal fourth quarter, the company reported adjusted earnings per share (EPS) of $2.21, missing the Zacks Consensus Estimate of $2.34 by 5.6%. That said, in the year-ago quarter, the company reported an adjusted EPS of $2.04, which was 8.3% down from the reporting period’s value.
Quarterly net sales of $1.79 billion topped the consensus estimate of $1.78 billion by 0.6% and grew 2.8% year over year.
Academy Sports and Outdoors, Inc. Price, Consensus and EPS Surprise
Academy Sports and Outdoors, Inc. price-consensus-eps-surprise-chart | Academy Sports and Outdoors, Inc. Quote
Comparable sales during the quarter declined (3.6)%, up 150 basis points (bps) from (5.1)% year over year and 440 bps from (8)% sequentially.
Operating Highlights
During the fiscal fourth quarter, selling, general and administrative expenses (as a percentage of net sales) were up 80 bps to 21.9% year over year.
Gross margin during the fiscal quarter increased 50 bps year over year to 33.3%. Growth in sales added to the uptrend.
Net income during the quarter was $168.2 million compared with $157.7 million reported in the year-ago quarter.
Adjusted EBITDA in the fiscal fourth quarter was $255.2 million compared with $253.9 million reported in the year-ago quarter.
Fiscal 2023 Highlights
For the fiscal year, Academy Sports reported net sales of $6.16 billion, down 3.7% from $6.4 billion reported in fiscal 2022. Adjusted EPS of $6.70 was down from $7.49 reported a year ago.
The gross margin in fiscal 2023 was 34.3%, down from 34.6% reported in the prior year. Adjusted EBITDA was $846 million, down from $994.7 million reported in the prior year.
Balance Sheet
As of Feb 3, 2024, cash and cash equivalents totaled $347.9 million, up from $337.1 million in fiscal 2022 end. Merchandise inventories at the end of the fourth quarter of fiscal 2023 were $1.19 billion compared with $1.28 billion reported in the year-ago period.
As of Feb 3, 2024, net long-term debt was $484.6 million, down from $584.5 million reported in fiscal 2022 end.
The company declared a 22% cash dividend hike to 11 cents per share on Mar 7, 2024. The dividend will be paid out on Apr 18, 2024, to shareholders on record as of Mar 26.
Fiscal 2024 Outlook
For fiscal 2024, Academy Sports expects net sales to be $6.07-$6.35 billion. The company expects comparable sales to be between negative 4% and positive 1%.
The gross margin rate in fiscal 2024 is expected to be between 34.3% and 34.7%. Capital expenditures during the year are anticipated in the range of $225-$275 million. The company expects 2023 net income to be between $455 million and $530 million.
Adjusted free cash flow during the year is expected to be between $290 million and $375 million. The company anticipates 2023 adjusted EPS to be in the range of $5.90-$6.90.
Zacks Rank & Recent Consumer Discretionary Releases
Academy Sports currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The company’s performance was negatively impacted by weather-related challenges comprising low snowfall across its western North American resorts and moderate snowfall and variable temperatures at the Eastern U.S. resorts. This challenging weather condition resulted in a notable decline in guest visitation, thus affecting the top-line growth in the quarter. Nonetheless, solid contributions from the ski and ride school as well as the dining and rental businesses offset the above-mentioned headwinds to some extent. Also, the company’s strategic cost management initiatives aided the bottom line during the quarter.
JAKKS Pacific, Inc. JAKK reported fourth-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate. Both the top and bottom lines missed the consensus estimate after beating in the preceding three quarters.
In the fourth quarter, two out of the company's top three U.S. Toys/Consumer Products managed to achieve positive year-over-year retail sales figures, despite facing challenging comparisons from the previous year. Additionally, the aggregate end-of-year inventory at retail for these three accounts has decreased by a high single-digit percentage compared with the previous year. While customers are cautiously transitioning into the new year, JAKK remains confident that its core businesses are stable.
Norwegian Cruise Line Holdings Ltd. NCLH reported fourth-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
The company reported robust demand for its Norwegian Cruise Line brand, with bookings and pricing exceeding 2023 levels. Also, it reported solid demand for Oceania Cruises and Regent Seven Seas Cruises across various geographical regions, except for itinerary adjustments due to cancellations in the Middle East and Red Sea regions.
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