Academy Sports Gears Up for Q1 Earnings: What's in the Cards?

Academy Sports and Outdoors, Inc. ASO is scheduled to report first-quarter fiscal 2025 results on June 10, before the market opens. 

ASO’s earnings beat the Zacks Consensus Estimate in one of the trailing four quarters, missed twice and matched on one occasion, the average surprise being negative 7%. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

Trend in Estimate Revision of ASO

The Zacks Consensus Estimate for the fiscal first-quarter bottom line is pegged at 91 cents, indicating a deterioration of 15.7% from $1.08 reported in the year-ago quarter.

Academy Sports and Outdoors, Inc. Price and EPS Surprise

Academy Sports and Outdoors, Inc. price-eps-surprise | Academy Sports and Outdoors, Inc. Quote

For revenues, the consensus mark is pegged at $1.37 billion. The estimate indicates an increase of 0.4% from the year-ago quarter’s figure.

Let us take a look at how things might have shaped up in the quarter to be reported.

Factors Likely to Shape Academy Sports’ Quarterly Results

Academy Sports’ fiscal first-quarter performance is likely to have benefited from a multi-pronged growth strategy emphasizing new brand partnerships, enhanced store productivity, a sharpened value proposition and digital capability upgrades.

The launch of the Jordan Brand is expected to have enhanced customer engagement and softlines penetration. This, along with expanded Nike assortments and new offerings from Converse and Osprey, is likely to have driven incremental traffic and early momentum in the fiscal first quarter.

On the omnichannel front, investments in RFID technology, handheld devices and same-day delivery options are likely to have improved inventory visibility, fulfilment efficiency and customer experience. These enhancements, coupled with a cleaner spring merchandise transition, might have supported store productivity and conversion in the fiscal first quarter.

While the lower to middle-income customer remained cautious, ASO is likely to have gained traction among higher-income cohorts seeking value. A growing loyalty program, with more than 11 million enrolled members, is expected to have contributed to higher visit frequency and basket size. However, soft consumer spending trends and unfavorable weather in January and February are likely to have weighed on traffic early in the quarter. 

Persistent macroeconomic pressures, including freight and tariff headwinds, are likely to have created near-term margin pressure. Additionally, investments tied to new store openings and merchandising efforts for the Jordan Brand are expected to have weighed modestly on profitability in the fiscal first quarter.

What Our Model Says About ASO Stock

Our proven model does not conclusively predict an earnings beat for Academy Sports this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here.

ASO’s Earnings ESP: Academy Sports has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

ASO’s Zacks Rank: Academy Sports currently has a Zacks Rank #4 (Sell).

Stocks With the Favorable Combination

Here are some stocks from the Zacks Consumer-Discretionary sector that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat.

Carnival Corporation & plc CCL has an Earnings ESP of +8.42% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the to-be-reported quarter, Carnival’s earnings are expected to increase 109.1% year over year. It reported better-than-expected earnings in each of the trailing four quarters, with an average surprise of 458.4%.

Boyd Gaming Corporation BYD currently has an Earnings ESP of +3.39% and a Zacks Rank of 3.

In the to-be-reported quarter, Boyd Gaming’s earnings are expected to increase 2.5% year over year. Boyd Gaming’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8%.

Hasbro, Inc. HAS has an Earnings ESP of +6.30% and a Zacks Rank of 3 at present.
 
Hasbro reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 41.7%. The company’s earnings for the to-be-reported quarter are expected to decrease 36.9% year over year.

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This article originally published on Zacks Investment Research (zacks.com).

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