Academy Sports and Outdoors, Inc. (ASO) recently released its quarterly earnings report, revealing mixed results. The company managed to meet the Zacks Consensus Estimate for earnings per share, reporting $2.03 per share, but fell short on revenue expectations, posting $1.55 billion in revenue for the quarter ended July 2024. This represents a slight decrease from the $1.58 billion in revenue reported during the same period last year.
While meeting earnings expectations might seem positive, the company’s recent performance has led to a downgrade in its stock rating. The unfavorable trend in earnings estimate revisions has prompted a Zacks Rank #4 (Sell) for ASO, suggesting that the stock is expected to underperform the market in the near future. This bearish outlook is further fueled by the weak overall performance of the Leisure and Recreation Products industry, which currently sits within the bottom 10% of Zacks-ranked industries.
The company’s stock has already taken a hit, losing about 20.2% of its value since the beginning of the year. This decline contrasts sharply with the S&P 500’s gain of 14.7% during the same period.
Moving forward, investors will be closely monitoring the company’s performance and the broader industry trends. While the company’s management will provide more insights during the earnings call, the future of ASO’s stock will largely depend on its ability to navigate these headwinds and demonstrate a strong earnings outlook.
As a point of comparison, Carnival (CCL), another player in the broader Zacks Consumer Discretionary sector, is expected to report earnings for the quarter ended August 2024. This cruise operator is projected to post quarterly earnings of $1.15 per share, representing a year-over-year increase of 33.7%. Carnival’s revenue is expected to reach $7.8 billion, a 13.7% jump from the previous year. It will be interesting to see how Carnival’s results impact investor sentiment towards the broader consumer discretionary sector.
