Academy Sports and Outdoors, Inc. (ASO): A Bull Case Theory 

We came across a bullish thesis on Academy Sports and Outdoors, Inc. on M Squared Capital’s Substack by Matthew McClintock. In this article, we will summarize the bulls’ thesis on ASO. Academy Sports and Outdoors, Inc.’s share was trading at $46.36 as of September 16th. ASO’s trailing and forward P/E were 8.73 and 7.94, respectively according to Yahoo Finance.

Academy Sports and Outdoors, Inc. ASO achieved its first quarterly positive comparable sales since 2021, driven primarily by price increases and improving trends in May through June. Major business categories, including footwear, apparel, sports/recreation, and outdoor, posted low-single-digit growth, while swimwear struggled early in the quarter before recovering with warmer weather.

However, the company reported its second consecutive quarter of earnings misses while simultaneously raising guidance, a somewhat confusing outcome driven by adjustments such as share repurchases, which boosted EPS despite a lower high-end adjusted net income.

Back-to-school sales were positive despite a difficult prior-year comparison, marking the only positive comp for the year in that period. Inflationary pressures, particularly from tariffs, were more explicitly acknowledged than peers, with average unit retail (AUR) up mid-single digits and ticket size rising 1.5%, with further acceleration expected industry-wide in the second half of the year as tariffs impact cost of goods sold.

Premium brands such as Nike and Jordan drove double-digit growth, aided by expanded distribution and better access to key products like Vomero 18, Air Max 270, football cleats, and backpacks, with further expansion planned for next spring. Higher-income consumer segments continued to drive share gains, while middle- and lower-income cohorts showed stability or modest declines.

Operational initiatives, including weekly inventory updates for major brands and RFID-enabled improvements, contributed to enhanced stock accuracy and instock positions. E-commerce accelerated to 18% sequential growth, reflecting both pricing and improved product access. Sourcing adjustments in China remain on track to reduce exposure to mid-single-digit percentages by year-end.

Overall, while near-term results were mixed, underlying trends in comps, inventory management, e-commerce, and premium product availability position the company for continued growth and margin resilience.

Previously we covered a bullish thesis on Academy Sports and Outdoors, Inc. (ASO) by Prateek Malhotra in November 2024, which highlighted the company’s store expansion, strong free cash flow, and share repurchases despite near-term same-store sales weakness. The stock has depreciated approximately 7% since coverage. The thesis still stands as ASO’s long-term growth and low valuation remain attractive. Matthew McClintock shares a similar thesis but emphasizes near-term operational performance, including improving comps, e-commerce growth, and premium brand access.

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Disclosure: None.