Academy’s 4Q Results Beat Estimates; Shares Jump 11%

Shares of Academy Sports and Outdoors surged almost 11% to close at $26.88 on March 30, after the sporting goods and outdoor recreational products retailer reported better-than-expected fiscal 4Q results. Top-line growth, aided by strong e-commerce sales, primarily drove the results.

Academy’s (ASO) 4Q adjusted earnings more than quadrupled on a year-over-year basis to $1.09 per share and easily beat the Street estimates of $0.52 per share. Net sales advanced 16.6% to $1.6 billion and surpassed the consensus estimate of $1.58 billion.

The company’s comparable sales grew 16.1%, mainly driven by strong consumer demand across all markets and merchandise divisions. E-commerce sales jumped 60.7%. (See Academy stock analysis on TipRanks)

Academy CEO Ken Hicks commented, “With our outstanding team, strong balance sheet and by investing in our key initiatives, such as power merchandising and e-commerce capabilities, Academy is very well positioned to continue to drive top and bottom line growth for the long term as well as enhance shareholder value.”

For fiscal 2021, the company projects EPS to range from $2.70 to $2.95 per share, versus the consensus estimate of $2.43 per share.

Recently, Loop Capital analyst Daniel Adam initiated coverage of the stock with a Buy rating and a price target of $30 (11.6% upside potential).

Adam cited more at-home fitness and outdoor activities, high exposure to geographically-attractive areas, and the company’s accelerating e-commerce business as tailwinds. Furthermore, the analyst considers Academy Sports’ strong balance sheet and attractive free cash flow yield as positives.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating, based on 2 Buys. The average analyst price target of $27 implies that shares are almost fully valued at current levels.

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