Academy Sports Sees Execution Strength And Nike Momentum, But Analyst Warns Of Prolonged Demand Weakness

Truist Securities analyst Joseph Civello reiterated the Hold rating on Academy Sports and Outdoors, Inc. ASO, raising the price forecast from $45 to $47.

The Hold rating reflects a conflict between the company’s successful business transformation and the persistent macroeconomic pressures on its key middle-income demographic.

While the analyst praised the operational improvements since 2019, he remained cautious that the challenging economic climate will continue to suppress consumer demand longer than broadly forecasted.

Also Read: Academy Sports and Outdoors Analysts Lower Their Forecasts Following Q1 Results

The company reported quarterly adjusted earnings per share of 76 cents, missing the analyst consensus estimate of 90 cents. Net sales of $1.35 billion missed the Street view of $1.37 billion.

First-quarter sales for the company experienced a slight decline of 0.9%, with comparable sales falling by 3.7%.

Civello noted that while Academy Sports’ expanded Nike, Inc. NKE and new Jordan collections are exceeding expectations and trade-down trends are gaining traction, overall traffic fell mid-single digits in the first quarter and May comps declined low-single digits due to a volatile macro environment.

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The analyst added that although Academy Sports has navigated tariff pressures effectively so far, he remains cautious on the second half as tariffs may increasingly impact its core middle-income shoppers.

Civello views Academy Sports as a leading sporting goods retailer for middle-income consumers, noting it has significantly improved its shopping experience and operations since 2019.

However, he pointed out that demand from its core customer base has come under pressure due to ongoing macro volatility, and he remains cautious that these headwinds could last longer than currently expected by the market.

The analyst projects the company to report FY25 earnings per share of $6.00. Civello lowered FY26 earnings estimate to $6.60 from $6.80.

Price Action: ASO shares are trading higher by 3.43% to $46.12 at last check Wednesday.

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