$ASO
Great numbers..increasing guidance.
Academy Sports + Outdoors Announces Record Sales and Earnings for the First Quarter and Raises 2021 Financial Forecast
Net Sales Increased 39.1%; Comparable Sales Increased 38.9%
Gross Margin Rate Increased 950 basis points to 35.7%
Pre-Tax Income Grew to $225.0 million from a loss of $9.5 million
Company Raises Full Year Diluted EPS Range to $4.15 to $4.50
KATY, Texas, June 08, 2021 (GLOBE NEWSWIRE) -- Academy Sports and Outdoors, Inc. (Nasdaq: ASO) ("Academy" or the "Company") today announced its financial results for the first quarter ended May 1, 2021. Unless otherwise indicated, comparisons are to the same period in the prior fiscal year.
First Quarter 2021 Results
Net sales increased 39.1% to a first quarter record $1.58 billion, while comparable sales increased 38.9%. Sales grew 46.8% compared to the first quarter of 2019. The growth was driven by continued strong, double-digit consumer demand across all product categories, notably in Apparel, Footwear and Team Sports, as well as across our entire geographic footprint. E-commerce sales declined 21.0%, as the website anniversaried triple-digit growth in the first quarter of 2020, as consumers shifted to online ordering at the beginning of the pandemic last year. Over the last two years, E-commerce sales have increased 300.0% during the first quarter.
Gross margin increased 89.2% to $563.7 million, the highest quarterly gross profit in the Company's history. The gross margin rate increased 950 basis points to 35.7%. This growth was primarily driven by improved merchandise margins from a favorable mix shift, higher average unit retails, fewer promotions and less clearance activity.
The growth in gross profit, coupled with 450 basis points of selling, general & administrative expense leverage, resulted in $224.9 million of pre-tax income versus a loss of $9.5 million in the first quarter of 2020.
Net income was $177.8 million compared to a loss of $10.0 million in Q1 2020. Diluted earnings per share were $1.84 compared to a loss of $0.14 in the prior year quarter. Pro forma adjusted net income, which excludes the impact of certain non-cash and extraordinary items, increased from $0.4 million to $182.5 million. Pro forma diluted earnings per share were $1.89 compared to $0.01 per share in the prior year quarter.
"The Academy Sports + Outdoors team again generated record-breaking sales and profits, while delivering fun to our customers," said Ken Hicks, Chairman, President and Chief Executive Officer. "The strategic initiatives implemented over the last few years, a shift in consumer spending into sports and outdoor categories, government-issued stimulus checks, the addition of new customers and more frequent shopping by existing customers are driving consistent growth. We believe our broad, value-based assortment, available through a true omnichannel experience, positions us to continue to capitalize on these market trends."
Balance Sheet Update
As of the end of the first quarter, the Company's cash and cash equivalents totaled $593.3 million and no amounts were drawn on its credit facility. During the first quarter, net cash provided by operating activities was $219.2 million compared to $90.8 million in the first quarter of 2020.
Subsequent to the end of the first quarter, on May 10, 2021, Academy's largest shareholders completed a secondary offering of the Company's common stock and Academy purchased and retired 3.2 million shares for approximately $100 million. As a result of this reduction in shares owned by the largest owners, Academy's largest shareholder owned approximately 31% of the Company. In addition to the stock repurchase, the Company paid down $99 million of its outstanding term loan and refinanced the loan's interest rate from LIBOR + 5.0% to LIBOR + 3.75%.
Michael Mullican, Executive Vice President and Chief Financial Officer, said, "Based on the extraordinary sales and margin results, the Company has fortified its balance sheet and is also increasing its full year earnings outlook. Academy's cash balance is stronger today than at the end of fiscal 2020 even after using $199 million to repurchase shares and pay down a portion of its term loan."
2021 Outlook
While there is still economic uncertainty from the impact of COVID-19 and other external factors, based on the strong performance of the first quarter and the visibility we have for the remainder of 2021, the Company is increasing its fiscal 2021 guidance as follows:
Fiscal 2021 Guidance
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Previous New
Comparable Sales (2.0)% to +2.0% +6.0% to +9.0%
Net Income (in millions) $265.0 to $290.0 $400.0 to $435.0
EPS-diluted $2.70 to $2.95 $4.15 to $4.50
The EPS estimate is based on diluted weighted average shares outstanding of 96.5 million shares and a tax rate of 23.0%.
