Academy Sports and Outdoors Inc. (NASDAQ:ASO) saw its share price jump by 14.40 percent on Wednesday to close at $51.15 apiece after posting a strong earnings performance in the second quarter of the year despite weakness in consumer spending trends.
In an earnings call on the same day, the sporting goods store chain said that it was able to grow its net income by 10 percent to $137.9 million from $125.4 million in the same period last year, as net sales jumped by 3 percent to $1.647 billion from $1.6 billion year-on-year.
The solid performance came despite pressures on consumer spending, particularly among lower-income households.
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“Our second quarter results demonstrate the strength of the business and the discipline of our operating model. We delivered double-digit EPS growth, produced strong free cash flow, and continued returning capital to shareholders through both share repurchases and dividends. Importantly, we accomplished this while investing in strategic growth initiatives designed to support sustainable long-term growth,” Chief Finance Officer Carl Ford said.
“As we enter the second half of the year, our balance sheet remains strong, our growth drivers are performing well, and we are well positioned to deliver within our fiscal 2026 outlook,” he added.
FY Outlook
Following the results, the retailer updated its growth outlook for full-year 2026.
It now expects a higher GAAP diluted earnings per share of $6.05 to $6.45, as well as adjusted diluted EPS of $6.50 to $6.90.
It also increased its gross margin rate to a range of 35.5 percent to 36 percent and adjusted free cash flow to between $300 million and $350 million.
Meanwhile, it maintained a net sales outlook of $6.23 billion to $6.355 billion, or an implied growth of 3 to 5 percent, as well as a net income of $390 million to $415 million.
Hedge Funds Cautious
Institutional investors appeared to be cautious about Academy Sports and Outdoors Inc. in the second quarter of the year amid the drop in the number of hedge fund holdings, alongside their committed capital.
During the period, 29 hedge funds held positions in the stock, down from 31 in the first quarter of the year.
Their combined holdings also fell by 29 percent to $231.8 million from $327.5 million quarter-on-quarter.
As the data predate second-quarter numbers, investors are now expected to assess whether the latest results and outlook provide enough support to prop up institutional conviction anew.
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