Why Academy Sports Shares Are Sliding Today

Academy Sports And Outdoors, Inc. ASO reported a third-quarter FY23 sales decline of 6.4% year-on-year to $1.398 billion, missing the analyst consensus estimate of $1.440 billion.

Adjusted EPS of $1.38 missed the analyst consensus of $1.59.

Comparable sales declined 8%. Gross margin contracted 50 basis points Y/Y to 34.5%, and gross profit fell 7.6% to $482.64 million.

Also Read: Academy Sports And Outdoors Extends Partnership With Digital Sports Platform Fanatics

Operating margin compressed from 12% to 9.8%, and operating income for the quarter plunged 23.8% to $136.73 million.

During Q3, Academy opened five new stores. The company opened a total of 14 stores in 2023. 

Adjusted EBITDA for the quarter totaled $174.5 million compared with $214.89 million a year ago.

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The company exited the quarter with cash and equivalents worth $274.8 million.

Dividend: The company declared a cash dividend of $0.09 per share of common stock, payable on January 10, 2024, to stockholders of record on December 13, 2023.

Share Repurchase: The board also approved a new, three-year, $600 million share repurchase program, bringing the total amount currently available under both share repurchase programs to approximately $700 million.

"We are also focused on creating shareholder value, demonstrated by the $44 million of share buybacks and $7 million of dividends paid to shareholders during the quarter," said Carl Ford, Chief Financial Officer.

Outlook: Academy Sports lowered its FY23 net sales outlook from $6.175 billion-$6.365 billion to $6.110 billion-$6.170 billion (consensus: $6.23 billion)

The company narrowed its adjusted EPS outlook from $6.95-$7.65 to $7.05-$7.20 (consensus: $7.13).

Read Also: Ford Rebounds With Bold EBIT Forecast Post-UAW Strike, Showcasing Ford+ Plan's Strength

Price Action: ASO shares traded lower by 1.05% at $50.01 on the last check Thursday.