OnTuesday, Evercore ISI maintained its In Line rating and $60.00 price target on Academy Sports & Outdoors Inc. (NASDAQ: ASO) following the company's third-quarter results.
The sporting goods retailer reported a comparable store sales decline of 4.9%, which was below the expected 3.5% decrease. This shortfall contributed to lower-than-anticipated margins and an earnings miss of $0.30 compared to the consensus.
"With earnings slipping and the considerable topline regression, the 3Q print was disappointing," said the analysts.
The company's management has revised its full-year earnings per share (EPS) guidance downward by approximately 3% to $5.65, reflecting the impact of the third-quarter performance. This adjustment also aligns with a forecasted decline in comparable store sales of 5.5% for 2024, compared to the prior expectations of a 4.7% to 5.0% decline predicted by Evercore ISI and other analysts.
In addition to the EPS and sales revisions, Academy Sports & Outdoors provided guidance on gross margin rates, projecting them to be between 34.3% and 34.5%, which is in line with Evercore ISI's and other analysts' expectations. The company also forecasted net income to range from $400 million to $425 million, a decrease from the previous range of $400 million to $460 million.
Despite the lackluster third-quarter results, Evercore ISI highlighted some positive aspects of Academy Sports & Outdoors' performance. The firm noted the company's ongoing store expansion and well-managed inventory as favorable factors. However, the stock price was anticipated to fall into the $40 range on Tuesday as the market adjusted to the revised 2024 earnings expectations.
Looking ahead, the company's future initiatives and store openings for 2025 will be closely watched, as these could influence analysts' projections for a potential return to positive comparable store sales and over 10% EPS growth in 2025.
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