Academy Sports and Outdoors Inc., spurred by consumer spending shifts, government stimulus and its expansive assortment across sports and outdoor categories, turned profitable in the first quarter of 2021 off a sales increase of 39.1 percent and raised its outlook for this year.
The Katy, Texas-based retailer on Tuesday reported net income of $177.8 million for the quarter ended May 1, compared to a loss of $10 million in the year-ago period.
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 EPS were $1.89 compared to $0.01 per share in the prior year quarter.
Net sales of $1.58 billion were a first-quarter record for the company. Comparable sales increased 38.9 percent. Sales grew 46.8 percent compared to the first quarter of 2019.
“The Academy Sports and 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,” Hicks said.
The company indicated that 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 the retailer’s geographic footprint.
E-commerce sales declined 21 percent, 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 percent during the first quarter.
Gross margin increased 89.2 percent 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 percent due primarily to improved merchandise margins from a favorable mix shift, higher average unit retails, fewer promotions and less clearance activity, the company said.
The growth in gross profit, coupled with 450 basis points of selling, general and 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.
Academy raised its outlook for 2021, estimating a comparable sales rise of 6 to 9 percent versus the previous forecast of minus-2 to 2 percent.
Net income is now seen at $400 million to $435 million for 2021, versus the previous forecast of $265 million to $290 million, and earnings per diluted share are estimated at $4.15 to $4.50, compared to the previous forecast of $2.70 to $2.95.
Founded in 1938 as a family business in Texas, Academy has grown to 259 stores across 16 contiguous states.