1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
ASO
Event Date
2020-10-02
Sector
Consumer
Subsector
Specialty Retail
Offer Range
$13.00-$13.00
Shares Offered
15.63M
89.91M
$1.4B
17.4%
Implied Upside vs Midpoint
Description
Academy Sports + Outdoors is one of the leading full-line sporting goods and outdoor recreation retailers in the United States. We estimate that we served 30 million unique customers and completed approximately 80 million transactions in 2019 across our seamless omnichannel platform and highly productive stores, resulting in net sales of $4.8 billion and making us the largest value-oriented sporting goods and outdoor recreation retailer in the country. We have continually increased our market share by expanding our leadership in fast-growing merchandise categories and offering a broad, value-oriented assortment with deep and localized customer connections. We believe the following key attributes differentiate us from our competitors: • Value-based assortment that enables our customers to participate and have fun, no matter their budget. • Broad assortment that extends beyond sporting goods and apparel to outdoor recreation. • Emerging, rapidly growing and profitable omnichannel strategy that leverages our strong BOPIS and shipping fulfillment capabilities. • Strong customer loyalty, with opportunities to increase penetration in existing markets. • Regional focus in the southern United States with a strong and growing presence in six of the top 10 fastest-growing metropolitan statistical areas, or MSAs. • Core customers comprising active families that we support with one-stopshop convenience. • Significant whitespace opportunity for both in-fill and adjacent geographies and new markets. • Strong financial profile with accelerating performance and attractive cash flow generation. Originally founded in 1938 as a family business in Texas, we have grown to 259 stores across 16 contiguous states, primarily in the southern United States. Our mission is to provide “Fun for All” and fulfill this mission with a localized merchandising strategy and value proposition that deeply connect with a broad range of consumers. Our product assortment focuses on key categories of outdoor, apparel, footwear and sports & recreation (representing 32%, 29%, 21% and 18% of our 2019 net sales, respectively) through both leading national brands and a portfolio of 17 owned brands, which go well beyond traditional sporting goods and apparel offerings. Our retail locations range in size from approximately 40,000 to 130,000 gross square feet, with an average size of approximately 70,000 gross square feet, and have no mall exposure. Our box size and layout create a spacious in-store experience for the current shopping environment and easily accessible front of store checkout that drives efficiency for our BOPIS and curbside pickup customers. Our stores are supported by over 20,000 knowledgeable team members offering a high-touch service element. Our stores have remained open during the COVID-19 pandemic as a result of our essential product offering and enhanced safety measures, resulting in continued market share gains and greater visibility in newer markets to the Academy brand and increased community connections. We operate three distribution centers that service our stores and our growing e-commerce platform, which reaches 47 states today. We have significant new store whitespace and our disciplined approach to store openings has allowed most stores to achieve profitability within the first twelve months of opening a store. We are active members of the communities in which we operate. Our long-time customers have grown up with the Academy brand over time and pass their passion for us on to the next generation, enabling us to benefit from strong customer loyalty and shopping frequency in our embedded regional markets. Our broad assortment appeals to all ages, incomes and aspirations, including beginning and advanced athletes, families enjoying outdoor recreation and enthusiasts pursuing their passion for sports and the outdoors. We enable our customers to enjoy a variety of sports and outdoors activities, whether they are trying out a new sport, tailgating for a sporting event or hosting a family barbecue. We enhance our customers’ shopping experience through our knowledgeable and passionate team members and value-added store services, making us a preferred, one-stop shopping destination. We carefully tailor our products and services to meet local needs and offer our customers memorable experiences that help us maintain lasting emotional connections with our loyal customer base and the communities we serve. We sell a range of sporting and outdoor recreation products. Our strong merchandise assortment is anchored by our broad offering of year-round items, such as fitness equipment and apparel, work and casual wear, folding chairs, wagons and tents, training and running shoes and coolers. We also carry a deep selection of seasonal items, such as sports equipment and apparel, seasonal wear and accessories, hunting and fishing equipment and apparel, patio furniture, trampolines, play sets, bicycles and severe weather supplies. We provide locally relevant offerings, such as crawfish boilers in Louisiana, licensed apparel for area sports fans, baits and lures for area fishing spots and beach towels in coastal markets. Our value-based assortment also includes exclusive products from our portfolio of 17 owned brands. Nearly 20% of our 2019 sales were from our owned brands, such as Magellan Outdoors and BCG, which offer a distinct offering to our customers and approximately 60% of our customers purchased an owned brand item from us in 2019. Our merchandising creates a balanced sales mix throughout the year with no single season accounting for more than 28% of our annual sales. Our stores deliver industry-leading unit sales and profitability, including 2019 net sales per store of $18.7 million, average sales per square foot of $264, and average EBITDA per store of $1.3 million. Our customers love the Academy store shopping experience because they are able to easily find, learn about, feel, try on and walk out with their favorite items. Our one-stop, convenient store layout, together with our highly trained team members offering value-added customer services, drive strong and consistent store foot traffic and transaction volume, with our average customers visiting our stores two to four times per year and our best customers visiting our stores nine times per year. The majority of our stores are located in high-traffic shopping centers, while none of the stores are located in, or anchored to, malls. Our emerging, profitable e-commerce platform that leverages our strong BOPIS and shipping fulfillment capabilities has achieved year-over-year sales growth of 8% and 284% during 2019 and the first half 2020, respectively. Our e-commerce sales represented 5% and 11% of our merchandise sales in 2019 and the first half 2020, respectively. We are deepening our customer relationships, further integrating our e-commerce platform with our stores and driving operating efficiencies by developing our omnichannel capabilities. Our BOPIS program, launched in 2019, accounted for approximately 24% and 50% of our e-commerce sales during 2019 and the first half 2020, respectively, and allows customers to place an order on our website and pick up their product at a desired location, either in-store or curbside. Our website also serves as a platform for marketing and product education, enhancing our customer experience and driving traffic to our stores. Our website is introducing new customers to the Academy brand, with approximately 25% of our e-commerce sales during first half 2020 coming from new households. We serve our communities by supporting events, programs and organizations that help make a positive impact, including the sponsorship of over 1,500 local sports teams. We promote and encourage safety and responsibility, so that everyone can feel confident and comfortable doing what they love, by offering products and information that enable our customers to be smart, responsible and safe. We have a long history of providing essential products for crisis preparedness and have helped our communities, customers and team members through various natural disasters and crises. --- Our principal offices are located at 1800 North Mason Road, Katy, Texas 77449. Our telephone number is (281) 646-5200. We maintain a website at www.academy.com.
Academy Sports & Outdoors, Inc. annual income statement and balance sheet, FY 2022 to FY 2026, as reported in SEC filings.
| Metric | FY 2022 | FY 2024 | FY 2025 | FY 2026 |
|---|---|---|---|---|
| Revenue | $6.8B | $6.2B | $5.9B | $6.1B |
| Gross profit | $2.4B | $2.1B | $2.0B | $2.1B |
| Operating income | $908M | $678M | $539M | $512M |
| Net income | $671M | $519M | $418M | $377M |
| Metric | FY 2022 | FY 2024 | FY 2025 | FY 2026 |
|---|---|---|---|---|
| Total assets | $4.6B | — | $4.9B | $5.3B |
| Total liabilities | $3.1B | — | $2.9B | $3.1B |
| Total equity | $1.5B | $2.0B | $2.0B | $2.2B |
| Cash & equivalents | $486M | $348M | $289M | $330M |