American Sports & Outdoors Delivers Robust Beat

American Sports & Outdoors, Inc. (ASO) delivered robust third-quarter results. The strong performance by the sporting goods store retailer was driven by strategic initiatives undertaken to improve inventory planning and allocation, operations, customer service, and supply chain.

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Backed by strong demand for its offerings, the company exceeded both earnings and sales estimates, with all four product segments witnessing huge growth.

ASO also raised its full-year Fiscal 2021 guidance. Following the news, shares jumped 8.5% to close at $46.90 on December 10.

Robust Results

The company reported adjusted earnings of $1.75 per share, up 92.3% year-over-year, significantly higher than analysts’ estimates of $1.03 per share.

Furthermore, ASO registered net sales of $1.59 billion, an 18.1% growth against the prior-year quarter, further outpacing analysts’ estimates of $1.48 billion. Comparable sales also grew 17.9% year-over-year, and e-commerce sales jumped 25.9%.

Management Comments

The company’s Chairman, President, and CEO, Ken Hicks said, “The Academy Sports + Outdoors team did a great job again delivering our 9th consecutive quarterly sales and profit increase… We are confident that our strong assortment and value offering, coupled with our great store service, enhanced omnichannel capabilities, and resilient supply chain will enable Academy to continue to achieve excellent results through this holiday season and beyond.”

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Upbeat Guidance

Based on the current economic environment and dynamic consumer trends, ASO raised its full-year fiscal 2021 guidance.

For FY21, ASO forecasts net sales to fall in the range of $6.675 billion to $6.740 billion, exceeding the consensus estimate of $6.6 billion.

Additionally, FY21 adjusted earnings are projected to be between $7.21 per share to $7.31 per share, significantly higher than the consensus of $6.48 per share.

Analysts’ View

Responding to ASO’s quarterly performance, J.P. Morgan analyst Christopher Horvers maintained a Buy rating on the stock with a price target of $58, which implies 23.7% upside potential to current levels.

Overall, the stock commands a Strong Buy consensus rating based on 6 Buys and 1 Hold. The average American Sports and Outdoors price target of $55 implies 17.27% upside potential to current levels. Shares have exploded 160.6% over the past year.

Smart Score

According to TipRanks’ Smart Score rating system, American Sports and Outdoors scores a “Perfect 10”, which indicates that the stock has strong potential to outperform market expectations.