Academy Sports and Outdoors, Inc. (ASO) | Investment Case

1. Company Snapshot

1.a. Company Description

Academy Sports and Outdoors, Inc., through its subsidiaries, operates as a sporting goods and outdoor recreational products retailer in the United States.The company sells coolers and drinkware, camping accessories, camping equipment, sunglasses, backpacks, and sports bags; marine equipment and fishing rods, reels, baits, and equipment; firearms, ammunition, archery and archery equipment, camouflage apparel, waders, shooting accessories, optics, airguns, and hunting equipment; team sports equipment, including baseball, football, basketball, soccer, golf, racket sports, and volleyball; fitness equipment and accessories, and nutrition supplies; and patio furniture, outdoor cooking, wheeled goods, trampolines, playsets, watersports, and pet equipment, as well as electronics products, watches, consumables, batteries, etc.It also offers outdoor apparel, seasonal apparel, denim, work apparel, graphic t-shirts, and accessories; boys and girls outdoor and athletic apparel; sporting apparel and apparel for fitness; professional and collegiate team licensed apparel and accessories; casual shoes and slippers, work and western boots, youth footwear, socks, and hunting and seasonal footwear; and boys and girls athletic footwear, running shoes, athletic lifestyle and training shoes, team and specialty sports footwear, and slides.

The company sells its products under the Academy Sports + Outdoors, Magellan Outdoors, BCG, O'rageous, Outdoor Gourmet, and Freely brand names.As of June 14, 2022, it operated 260 retail locations in 16 contiguous states.The company also sells merchandise to customers through the academy.com website.

Academy Sports and Outdoors, Inc.was founded in 1938 and is headquartered in Katy, Texas.

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1.b. Last Insights on ASO

Academy Sports and Outdoors' recent performance was driven by strong Q3 earnings, with net sales growing 3% year-over-year to $1.38 billion and gross margin expanding 170 bps to 35.7%. The company's resilience in core business, favorable consumer mix shift, and new-store momentum have driven a healthier growth profile. With 25 new stores expected this year and at least 22 next year, aggressive store expansion is driving revenue growth. Additionally, the company's premium-brand partnerships are fueling traffic and private label adoption, creating a sticky, higher-margin customer base.

1.c. Company Highlights

Last Price	57.44
Change Percentage	-1.60%
Open	58.13
Previous Close	58.37
Market Cap ( Millions)	3830
Volume	1008647
Year High	60.32
Year Low	33.34
M A 50	54.16
M A 200	49.33

FCF Yield	6.62%
Dividend Yield	0.91%
ROE	18.44%
Debt / Equity	64.66%
Net Debt / EBIDTA	169.89%
Price To Book	1.78
Price Earnings Ratio	10.16
Price To FCF	15.1
Price To sales	0.64
EV / EBITDA	7.62

2. Academy Sports and Outdoors' Q3 Results Exceed Expectations

Academy Sports and Outdoors reported net sales of $1.38 billion for the third quarter of fiscal 2025, a 3% increase from the previous year, with a comp decrease of 0.9%. The gross margin rate expanded to 35.7%, up 170 basis points from last year, driven by improvements in merchandise margin, freight, and shrink. Operating income grew 9.7% to $100 million, and diluted EPS increased 14% to $1.05, with actual EPS coming in at $1.14, beating estimates of $1.06.

Publication Date: Dec -20

                                    📋 Highlights
                                    Net Sales Growth::
                                                Q3 2025 net sales reached $1.38B (+3% YoY), with e-commerce up 22% YoY and total e-commerce penetration at 10.4% (targeting 15%).
Gross Margin Expansion::
                                                Gross margin improved to 35.7% (+170 bps YoY), driven by AUR growth (mid-to-high single digits) and operational efficiencies.
New Store Performance::
                                                11 new stores opened (8% store count growth YoY) contributed a 50 bps comp tailwind, with new store comps at high single digits.
Customer Demographic Shift::
                                                High-income customers now 40% of base (up from 33%), driving U.S. population-growth-focused expansion in Texas and mid-sized markets.
Strategic Capital Allocation::
                                                $54M invested in initiatives, $8.7M in dividends, and $290M in cash reserves, with 2026 store growth guidance at 20–25 openings.

                                

Segment Performance

The company's sales growth was driven by the Sports and Rec, Apparel, Footwear, and Outdoor categories, which grew 6%, 3%, 2%, and 2%, respectively. The e-commerce channel continued to perform well, with sales up 22% year-over-year, and e-commerce penetration growing to 10.4%. The company expects to achieve 15% e-commerce penetration in its long-range plan.

Store Expansion and Customer Trends

Academy Sports and Outdoors opened 11 new stores during the quarter and plans to open 20 to 25 stores in 2026, with a focus on legacy and existing markets. The company is seeing a K-shaped economy, with upper-income customers driving growth, while lower-income customers continue to pull back. The health of the Academy customer is mixed, with upper-income customers growing high single digits, and middle-income customers steady, while lower-income customers decline mid-single digits.

Valuation and Outlook

Using the given valuation metrics, Academy Sports and Outdoors has a P/E Ratio of 9.5, P/B Ratio of 1.67, and P/S Ratio of 0.6. With the company's strong Q3 results and growth prospects, the current valuation appears reasonable. Analysts estimate next year's revenue growth at 2.7%. The company's plans to resume buybacks in Q4 and its commitment to balanced capital allocation are positive signs for investors.

Private Brands and SG&A

The company saw strength in its private brands, such as Magellan and Freely, with customers trading into these brands as they seek value. Academy views its private brands as a key expression of value to customers. On SG&A, the company expects a relatively low figure in Q4 due to efficiency efforts, price changes, and a sale-leaseback of a property in the prior year.

3. NewsRoom

Head-To-Head Comparison: Academy Sports and Outdoors (NASDAQ:ASO) & Newton Golf (NASDAQ:NWTG)

Jan -31

Source: defenseworld.net

Universal Beteiligungs und Servicegesellschaft mbH Has $7.22 Million Stock Holdings in Academy Sports and Outdoors, Inc. $ASO

Jan -26

Source: defenseworld.net

Maryland State Retirement & Pension System Has $478,000 Holdings in Academy Sports and Outdoors, Inc. $ASO

Jan -24

Source: defenseworld.net

Academy Sports and Outdoors, Inc. $ASO Shares Sold by SG Americas Securities LLC

Jan -20

Source: defenseworld.net

Reviewing Academy Sports and Outdoors (NASDAQ:ASO) and Malibu Boats (NASDAQ:MBUU)

Jan -11

Source: defenseworld.net

Don’t Call It a Comeback (Yet). Academy Sports Has More Work to Do.

Jan -07

Source:

Analyzing Academy Sports and Outdoors (NASDAQ:ASO) and Smith & Wesson Brands (NASDAQ:SWBI)

Dec -23

Source: defenseworld.net

Academy Sports + Outdoors Gifts More Than $135,000 to Local Families this Holiday Season

Dec -19

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.03%)

6. Segments

Outdoors

Expected Growth: 3.5%

Academy Sports and Outdoors' Outdoors segment growth of 3.5% is driven by increasing consumer participation in outdoor activities, favorable weather conditions, and strategic investments in e-commerce and omnichannel capabilities. Additionally, the company's focus on private label brands, such as Magellan Outdoors, and partnerships with popular outdoor brands like Yeti and Coleman, contribute to the segment's growth.

Apparel

Expected Growth: 2.8%

Academy Sports and Outdoors' apparel segment growth of 2.8% is driven by increasing demand for athleisure wear, strategic partnerships with popular brands, and effective marketing campaigns targeting outdoor enthusiasts. Additionally, the company's focus on private label offerings and e-commerce expansion have contributed to the segment's growth.

Sports and Recreation

Expected Growth: 3.2%

Academy Sports and Outdoors' 3.2% growth in Sports and Recreation is driven by increasing participation in outdoor activities, rising health awareness, and growing demand for athleisure wear. Additionally, the company's omnichannel strategy, private label offerings, and strategic store locations contribute to its growth.

Footwear

Expected Growth: 2.5%

Academy Sports and Outdoors' 2.5% growth in footwear is driven by increasing participation in outdoor activities, expanding product offerings in popular brands like Nike and Adidas, and strategic marketing efforts targeting health-conscious millennials. Additionally, the company's omnichannel approach and competitive pricing strategy contribute to its growth in the footwear segment.

Other

Expected Growth: 2.2%

Academy Sports and Outdoors, Inc.'s 2.2% growth in the 'Other' segment is driven by increasing online sales, expansion of private label brands, and strategic partnerships. Additionally, the company's focus on omnichannel retailing, improved supply chain management, and effective inventory control have contributed to this growth.

7. Detailed Products

Hunting Gear

Academy Sports and Outdoors offers a wide range of hunting gear including firearms, ammunition, archery equipment, and hunting apparel.

Fishing Gear

Academy Sports and Outdoors offers a variety of fishing gear including rods, reels, lures, and fishing apparel.

Camping Gear

Academy Sports and Outdoors offers a wide range of camping gear including tents, sleeping bags, backpacks, and camping accessories.

Fitness Equipment

Academy Sports and Outdoors offers a variety of fitness equipment including treadmills, ellipticals, exercise bikes, and strength training equipment.

Team Sports Equipment

Academy Sports and Outdoors offers a wide range of team sports equipment including baseball bats, soccer balls, basketballs, and footballs.

Outdoor Apparel

Academy Sports and Outdoors offers a variety of outdoor apparel including jackets, pants, shirts, and footwear.

Recreational Games

Academy Sports and Outdoors offers a variety of recreational games including cornhole, ladder toss, and giant Jenga.

8. Academy Sports and Outdoors, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Academy Sports and Outdoors, Inc. faces moderate threat from substitutes, as customers have alternative options for outdoor recreation and sporting goods. However, the company's strong brand recognition and wide range of products mitigate this threat to some extent.

Bargaining Power Of Customers

Academy Sports and Outdoors, Inc. has a large customer base, which reduces the bargaining power of individual customers. Additionally, the company's loyalty programs and rewards schemes help to retain customers and reduce price sensitivity.

Bargaining Power Of Suppliers

Academy Sports and Outdoors, Inc. has a diverse supplier base, which reduces dependence on individual suppliers. However, the company still faces some pressure from suppliers, particularly those providing high-demand products.

Threat Of New Entrants

Academy Sports and Outdoors, Inc. operates in a highly competitive market, but the company's strong brand recognition, extensive store network, and established relationships with suppliers create barriers to entry for new entrants.

Intensity Of Rivalry

Academy Sports and Outdoors, Inc. operates in a highly competitive market, with several established players vying for market share. The company faces intense competition from online retailers, specialty stores, and other sporting goods retailers.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	23.65%
Debt Cost	3.95%
Equity Weight	76.35%
Equity Cost	10.98%
WACC	9.32%
Leverage	30.97%

11. Quality Control: Academy Sports and Outdoors, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

GPC

A-Score: 5.6/10

Value: 3.7

Growth: 5.1

Quality: 4.2

Yield: 6.0

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

Casey's General Stores

A-Score: 5.5/10

Value: 2.9

Growth: 7.0

Quality: 5.4

Yield: 0.0

Momentum: 9.0

Volatility: 8.7

1-Year Total Return ->

Ulta Beauty

A-Score: 5.3/10

Value: 2.9

Growth: 7.7

Quality: 6.3

Yield: 0.0

Momentum: 9.0

Volatility: 6.0

1-Year Total Return ->

Bath & Body Works

A-Score: 5.0/10

Value: 9.3

Growth: 4.2

Quality: 5.9

Yield: 6.0

Momentum: 1.5

Volatility: 3.3

1-Year Total Return ->

Academy Sports

A-Score: 4.7/10

Value: 7.1

Growth: 6.4

Quality: 5.6

Yield: 1.0

Momentum: 4.0

Volatility: 4.3

1-Year Total Return ->

Murphy USA

A-Score: 4.0/10

Value: 3.9

Growth: 8.0

Quality: 4.1

Yield: 0.0

Momentum: 1.0

Volatility: 7.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

2.74%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.32%

Academy Sports and Outdoors, Inc. - US00402L1070

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ASO

1.c. Company Highlights

Better Quality

Average Growth

Stable Momentum

Earnings Miss

Average Quality

Fairly Valued

Higher Growth

Revenues Miss

Weak Momentum

Earnings Beats

Revenues Beats

Average Yield

2. Academy Sports and Outdoors' Q3 Results Exceed Expectations

Segment Performance

Store Expansion and Customer Trends

Valuation and Outlook

Private Brands and SG&A

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.03%)

6. Segments

Outdoors

Expected Growth: 3.5%

Apparel

Expected Growth: 2.8%

Sports and Recreation

Expected Growth: 3.2%

Footwear

Expected Growth: 2.5%

Other

Expected Growth: 2.2%

7. Detailed Products

Hunting Gear

Fishing Gear

Camping Gear

Fitness Equipment

Team Sports Equipment

Outdoor Apparel

Recreational Games

8. Academy Sports and Outdoors, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Academy Sports and Outdoors, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

57.43$

Current Price

57.44$

Potential

12.e Scoring ^Insights

12.f DCF ^BETA