Nathaniel Thiele

Academy Sports and Outdoors logo

Background

Academy Sports and Outdoors is a sporting goods store based in Katy, TX. They did $4.9 Billion in 2020. Academy is focused on the midwest and the south. Academy sells apparel, sports items, and outdoor equipment. The company is a big-box retailer.

Stock Information

The founders and majority owners were the Gochman family. They founded the company as the Academy Tire shop. Academy Tire Shop was then changed into a military surplus store. The surplus store changed into a sports store. The company was sold to KKR(a private equity company) in 2017. The company went public in October 2020. 

Strengths

The products offered have strong demand. The need for products and discounts offered to customers insure that the company has a strong niche. Strong brand loyalty exists and the BCG brand is very popular. Private labels are very profitable and quite common.

Weakness

A low number of staff at most locations. A large percentage of thefts and stolen goods. Most of the growth is expanding into new markets. Oversaturation occurs in states like Texas. A large majority of the stores are in Texas. Low margins industry.

Opportunities

Most markets are open for expansion. Same-store growth could improve. E-commerce and online store sales could grow. Expanding the number of distribution centers could improve margins and reach a wider area. 

Threats

Increased e-commerce threats from Amazon. Very large dependence on China/imported goods. Competition from Dicks sporting Goods. Depending on the large shareholder KKR for most of the market value.

Conclusion

ASO has a market cap of $3.7 Billion as of October 5th, 2021. They don’t currently pay a dividend. They would be a perfect holding for midcap investors. Rember to due diligence and do your own research. 

NASDAQ:ASO