Academy Sports And Outdoor: Green Shoots Appear In Sales Growth
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Caffital Research1.85K FollowersFollow5ShareSavePlay(9min)CommentsSummaryAcademy Sports and Outdoors, Inc. again reported subdued comparable growth in Q3. A sector downturn weighs on the retailer, but ASO's weakness is also above peers'. The comparable sales performance has shown some green shoots, raising faith in stabilization as the consumer sentiment eventually improves. ASO already returned to positive earnings growth, driven by strong gross margin gains. I estimate ASO stock to have 46% upside to $74.3. Yagi Studio/DigitalVision via Getty Images Academy Sports and Outdoors, Inc. (ASO) reported the company’s fiscal Q3 results from the August-October period on the 9th of December. The retailer’s comparable sales remained relatively weak, but the performance already showsThis article was written byCaffital Research1.85K FollowersFollowI am an avid investor with a major focus on small cap companies with experience in investing in US, Canadian, and European markets. My investment philosophy to generating great returns on the stock market revolves around identifying mispriced securities by understanding the drivers behind a company's financials, and ultimately, most often revealed by a DCF model valuation. This methodology doesn't limit an investor into rigid traditional value, dividend, or growth investing, but rather accounts for all of a stock's prospects to determine the risk-to-reward.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Quick InsightsHow did ASO's sales perform in Q3?ASO showed quite weak comparable sales growth in Q3, reflecting a sector downturn but company-specific weakness as well.How is ASO's forward earnings outlook?ASO has a fair earnings outlook ahead. Gross margin gains returned ASO to positive earnings growth in Q3, and ASO should stabilize comparable sales over the mid-term.What catalysts could drive ASO’s sales and earnings recovery?Continued strong performance from new stores, accelerating e-commerce sales, and a sector rebound should restore comparable growth and strengthen earnings growth.Recommended For You