B.Riley on Academy Sports & Outdoors Inc. (ASO): 'results reflect the lack of allocations in key performance running brands'
B.Riley analyst Anna Glaessgen reiterated a Buy rating and $65.00 price target on Academy Sports & Outdoors Inc. (NASDAQ: ASO).
The analyst comments "Academy Sports and Outdoors’ (ASO—Buy, $65 PT) 4Q23 EPS came in below expectations, reflecting continued top-line pressure. Of greater focus is the 2024 guide; comps and EPS came in below expectations, notably with the comp midpoint (-1.5%) indicating another year of negative SSS performance. While we believe expectations into the quarter had been lifted by peer reports such as DKS, we believe ASO’s results reflect the lack of allocations in key performance running brands (HOKA, On), which we believe have been key to DKS’ impressive momentum. Also, though we’re a few years out from peak COVID, generally, performance in core COVID beneficiary categories continues to feel the effects of the COVID unwind — which presents an additional headwind vs. DKS given ASO’s heavier hardgoods mix. Considering the strong earnings growth opportunity ahead as these category pressures wane, plus the modest valuation (esp. compared to DKS), we continue to like ASO — though we expect more consistent execution will be key to narrowing the valuation delta to DKS."
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Shares of Academy Sports & Outdoors Inc. closed at $71.25 yesterday.