Academy Sports and Outdoors CEO Ken Hicks joins Yahoo Finance’s Zack Guzman to discuss the company's public debut on the NASDAQ.
ZACK GUZMAN: A lot of action on the IPO front, and today we got yet another company making its public debut. That would be Academy Sports here wrapping things up-- a busy week here coming out. Of course, the company, which KKR bought back in 2011, has 259 stores across the US that sell sporting equipment including footwear, apparel, gym accessories, and a lot of outdoor equipment as well, which has seen a boost here in the lock down as more Americans look to spend more time outdoors. The company raising more than $200 million in the IPO, though below its initial target of $15 to $17 a share. We are seeing shares trade below that today.
Here to join us with more on the growth story here tied to Academy Sports is the CEO of Academy Sports and Outdoors, Ken Hicks. And, Ken, appreciate you coming on to chat here. [INTERPOSING VOICES] Notably your guys' sales growth was pretty strong in terms of, you know, the year-to-date period through August this year, up 18% which is much more than what we've seen year over year before. So talk to me about what you're seeing out there in terms of Americans really turning to you guys to get outside.
KEN HICKS: Yeah, I think we're the perfect place right now. People are looking for an experience, and we can provide that outdoors or in their backyard. And people are also looking for health and wellness, and so with physical equipment, physical exercise equipment, you know, we in games and sports-- we really do provide a great alternative to just being cooped up in the house. And we've seen our entire store has continued to grow throughout this period.
ZACK GUZMAN: Yeah, and that's-- I mean, that's the interesting thing is sales growth of 18% in terms of some of these other tech companies we've seen out might look anemic there. But you guys had seen comparable sales growth in terms of same-store sales growth, and that was pretty much down 5% in 2018, down 2.5% in 2019. But this year through August, up 16% versus what you saw last year. So how much of that would you say was tied specifically just to this surge in the COVID-19 lockdown versus what you guys had maybe gotten underway before it struck?
KEN HICKS: Yeah, obviously some of it is coming from COVID, but we put in place our strategy a little over a year ago. And we started to see a lot of the efforts that we put in our stores, our merchandising, our omnichannel kick in the back half of last year, and we had a very good comp the back half of last year and the first part of this year before COVID. So we felt our strategy were working and performing during normal times. And when they really took off during, you know, the most difficult retail environment that we've seen in a long time, we felt really great about our position, where we were, and our strategy.
ZACK GUZMAN: You know, I want to ask you more about that online strategy as well, since e-commerce sales represented 5 and 11% percent of your sales in 2019 and the first half of 2020. But they jumped 406% from the prior quarter in the first quarter of 2020 and 210% from the prior quarter in Q2. So, I mean, when we think about this shift, we've seen it with Nike too-- e-commerce becoming a larger and larger piece of the pie here for them. For you guys, I mean, how does that shift, when you have more than 200 stores across the country-- does it maybe make you want to open fewer in the future here? Or how are you looking to shift things online?
KEN HICKS: No, we really are true omnichannel, and we took a three-prong approach. First and foremost, we improved our site, making it faster, more payment terms, better search. The second thing is we really linked our stores with the site with buy online, pickup in store, giving our team members in the store the ability to look up and ship things. Half of our sales online are buy online, pick up in stores. So the consumer is hooking the store with the site, and we've connected those.
And then the third part was improving our back rooms-- faster shipping, more efficient information, automated information, and connection to the customer. So putting those three things together improve the overall dot-com. But we are not over-stored. With only 259 stores in 16 states, we have a significant opportunity for more stores coupled with the dot-com.
ZACK GUZMAN: Yeah, as you guys know, since 2011 you've invested more than $225 million in that omnichannel experience here for customers, having both of those things to work with when they come to Academy. But when you're going up against, you know, Dick's Sporting Goods and Walmart, Amazon, there seems to be pretty intense competition. What is it you're trying to build in terms of a moat around Academy Sports that would set you aside from the competition out there and being the first place people want to turn to when it comes to recreational activity?
KEN HICKS: Well, the breadth of our assortment-- first of all, we have a broader assortment than the competition, both in terms of the categories but also the depth. We also have value as an important part of what we are. And we trade from the beginner to the enthusiast. We aren't just for the elite athlete or for the adventure person. We are truly about the family. We have a broader mix of families. We have almost 50-50 male-female, and no other sporting goods retailer has that kind of mix with the female customer and a broader diversity of customers.
We also-- the big ticket items I think separate us from some of the dot-com things that are difficult to pick up. You know, shipping a kayak is really tough, and a lot of that-- that' a lot of what our buy online, pick up in store is about-- kayaks, exercise equipment.
And the final thing is the tactile nature of what we have. People want to feel that baseball bat. They want to feel the whip in the fishing rod. They want to see how sturdy that outdoor grill is, and we provide that experience and couple it with the online experience.
ZACK GUZMAN: It's a very good point. It's tough to just pick a kayak online. You never know what you're going to get out there. You want to make sure you got one that's going to float. But, Ken Hicks, appreciate you taking the time to chat with us today. The CEO and president at Academy Sports and Outdoors, appreciating you taking the time.
KEN HICKS: My pleasure. Thank you very much, Zack.