What happened
Academy Sports and Outdoors (ASO +1.41%) has seen its stock price drop 10.8% this week as of Friday at 9:45 a.m. ET, according to S&P Global Market Intelligence. The stock had been down as much as 11.7% during the week. Academy Sports is now trading at about $51 per share, down about 2.6% year to date.
The markets were mixed this week, as the S&P 500 was up 0.6%, the Dow Jones Industrial Average had dropped 0.7%, and the Nasdaq Composite had gained 2% at Friday at 9:45 a.m. ET.
So what
Sporting goods retailer Academy Sports and Outdoors fell this week after some of its competitors in the sporting goods space posted subpar earnings.
Most notably, Dick's Sporting Goods posted its second-quarter-earnings results on Tuesday, and it missed consensus earnings estimates for the first time in three years. Dick's saw net income decline by 23% year over year (YOY) in the quarter to $244 million and its net profit margin dropped to 7.6% from 10.3% a year ago in the same quarter. Also, Dick's lowered its earnings guidance for the full year. This caused the stock price to plummet some 24% after earnings.
NASDAQ: ASO
Key Data Points
Shoe retailer Foot Locker also had a difficult quarter. Foot Locker posted earnings on Wednesday, and it also missed sales and earnings expectations. The company saw revenue fall 9.9% YOY in the second quarter, with same-store sales down 9.4%. This was due to a challenging economic environment and price sensitivity among customers. And like Dick's, it lowered its earnings guidance for the rest of the fiscal year.
Now what
Academy Sports and Outdoors does not release its second-quarter earnings until next Thursday, Aug. 31, but investors were skittish after seeing sales and earnings declines for its competitors.
Academy Sports had a challenging first quarter, with net sales down 5.7% YOY and net income down 37%. It lowered its guidance for the full fiscal year last quarter, but president and CFO Michael Mullican said the company expects sales to increase in the second half of the year.
Academy Sports plans on opening 120 to 140 new stores over the next five years, so it is a stock to keep an eye on as it looks to aggressively expand. By 2027, it expects to have more than $10 billion in net sales with a net income margin of 10%. That would be up from an anticipated $6.3 billion in net sales in fiscal year 2023. That's an annualized growth rate of about 12%.
Investors and watchers of Academy Sports should tune into earnings next week for more visibility.
