8-K: Academy Sports + Outdoors Reports Fiscal 2024 Results, Announces Jordan Brand Launch and Dividend Increase

Academy Sports and Outdoors announces its fiscal 2024 results, including a comparable sales decline of 3.0% in the fourth quarter, the launch of Jordan Brand in 145 stores and online, and an 18% increase in the quarterly dividend.

Summary

• Academy Sports and Outdoors reported its financial results for the fourth quarter and fiscal year ended February 1, 2025.
• Fourth quarter comparable sales decreased by 3.0%, showing a 190 basis point improvement compared to the third quarter of 2024.
• Diluted GAAP EPS for the fourth quarter was $1.89, above the midpoint of updated guidance.
• The company announced the launch of the Jordan Brand in 145 stores and online, starting in late April.
• The quarterly dividend was increased by 18% per share.
• Net sales for the fourth quarter were $1,676.9 million, a 6.6% decrease compared to $1,794.8 million in the same quarter of the previous year.
• Net sales for fiscal year 2024 were $5,933.4 million, a 3.7% decrease compared to $6,159.3 million in fiscal year 2023.
• Comparable sales for fiscal year 2024 decreased by 5.1%.
• The company opened five new stores during the fourth quarter, bringing the total to 16 new stores in 2024.
• Academy plans to open 20-25 new stores in 2025.
• The company expects fiscal 2025 net sales to be between $6,090 million and $6,265 million.
• Comparable sales for fiscal 2025 are expected to range from a 2.0% decrease to a 1.0% increase.
• GAAP earnings per common share, diluted, for fiscal 2025 are projected to be between $5.40 and $5.85.
• Adjusted earnings per common share, diluted, for fiscal 2025 are expected to be between $5.75 and $6.20.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the company experienced some declines in sales and earnings, there are positive developments such as the launch of the Jordan Brand, the increase in the dividend, and plans for new store openings. The company also expects sequential improvements in comp sales into 2025.

Positives

• Fourth quarter comparable sales showed improvement compared to the third quarter.
• The launch of the Jordan Brand is expected to drive sales growth.
• The increase in the quarterly dividend provides value to shareholders.
• The company is expanding its store footprint with plans to open 20-25 new stores in 2025.
• The company's profitability and cash flow from operations as a rate to sales is top quartile in retail.

Negatives

• Fourth quarter net sales decreased by 6.6% compared to the previous year.
• Fiscal year 2024 net sales decreased by 3.7% compared to the previous year.
• Comparable sales for fiscal year 2024 decreased by 5.1%.
• The company expects the first quarter of 2025 to be the most challenging from a sales and earnings per share perspective.

Risks

• The company faces challenges in a difficult macroeconomic environment.
• Inflation and higher interest rates could affect consumer spending.
• The company's future performance is subject to various risks, uncertainties, assumptions, or changes in circumstances that are all difficult to predict or quantify.
• The company expects the first quarter to be the most challenging from a sales and earnings per share prospective as they plan to open five stores and transition to the new Jordan floor set.

Future Outlook

The company expects fiscal 2025 net sales to be between $6,090 million and $6,265 million, with comparable sales ranging from a 2.0% decrease to a 1.0% increase. GAAP earnings per common share, diluted, are projected to be between $5.40 and $5.85, and adjusted earnings per common share, diluted, are expected to be between $5.75 and $6.20.

Management Comments

• 'Looking back on 2024, our team made significant strides toward achieving our long-term goals, all while thoughtfully navigating a challenging macroeconomic environment,' said Steve Lawrence, Chief Executive Officer.
• 'As we head into 2025, were energized by the opportunities that lie ahead.'
• 'The foundation for growth that weve built over the past year should yield meaningful results this year and into the future.'
• Carl Ford, Executive Vice President and Chief Financial Officer, stated that the fourth quarter played out in-line with guidance, with customers relying on Academy to deliver value when it mattered most.
• Carl Ford also stated that the company has seen sequential improvements in comp sales since the second quarter and they anticipate that will continue into 2025.

Industry Context

Academy Sports + Outdoors operates in the sporting goods and outdoor recreation retail industry, competing with major players like Dick's Sporting Goods, Bass Pro Shops, and Cabela's. The launch of the Jordan Brand could help Academy attract a younger demographic and compete more effectively in the athletic apparel and footwear market.

Comparison to Industry Standards

• The company's profitability and cash flow from operations as a rate to sales is top quartile in retail.
• Dick's Sporting Goods, a major competitor, has also been focusing on expanding its private label brands and enhancing its omnichannel experience.
• Other sporting goods retailers, such as Hibbett Sports, have reported similar challenges related to macroeconomic conditions and consumer spending.

Stakeholder Impact

• Shareholders will benefit from the increased dividend and potential share repurchases.
• Employees may see new opportunities with the opening of new stores.
• Customers will have access to a wider range of products with the launch of the Jordan Brand.
• Suppliers may see increased demand with the expansion of the company's store footprint.

Next Steps

• The company plans to open 20-25 new stores in 2025.
• The company will launch the Jordan Brand in 145 stores and online in late April.
• Academy will host a conference call today at 10:00 a.m. Eastern Time to discuss its financial results.

Key Dates

Keywords

Academy Sports + Outdoors, financial results, comparable sales, Jordan Brand, dividend, new stores, fiscal year 2024, fiscal year 2025, retail