ASO - Earnings call transcript Q4 2020 | Academy Sports and Outdoors, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Academy Sports and Outdoors Fourth Quarter and Fiscal Year 2020 Earnings Conference Call. At this time, this call is being recorded and all participants are in a listen-only mode.

Following the prepared remarks, there will be a brief question-and-answer session. Questions will be limited to analysts and investors, so please limit yourself to one question and one follow-up. [Operator Instructions]. the and to Outdoors. turn of Mullican, now Sports Academy will call Michael over CFO I Michael, go please ahead.

Michael Mullican

Good morning, everyone.

Matt. Relations, Vice Before to we will of oversee new Relations January take want Matt Investor President a and XXX minute Academy's us Matt years Academy, get comes to introduce investor company finance companies, public Welcome of JPMorgan and experience Academy started, GameStop. in Matt with lead Hodges. and I Fortune to function analyst communications. with including joined Investor our and XX more than to

Matt Hodges

Michael. you results fourth Executive Vice Thanks CFO; Good the Chairman, joining morning Chief Participating Mullican, and today. President CEO; thank everyone. call XXXX and Officer. for Executive and and Steve Ken President Hicks, And President and quarter Lawrence, on Merchandising are Academy's call Michael Vice

said, revise and to earnings uncertainties obligation with include, The but are to Relations are CEO. forward-looking are release in undertakes the For to certain at earnings our be today's the the GAAP made risks in by measures are the available statements call during remarks in this investors.academy.com. statements the our and included securities today's morning website. release to refer under I'll this And by provided and reference, is no directly release filings financial factors in not federal Safe call release turn today's our actual limited that materially are intended provisions and to, reminder, comments These forward-looking cause Hicks, and comparable over the Harbor These statements. SEC. non-GAAP results management company differ identified earnings on to from covered Reconciliations Today's a and now the the any issued Ken our Investor considered as most With projections. our to that laws. could measures. earnings and risks subject be uncertainties expectations may financial to

Ken Hicks

Outdoor hard you outdoor Thank shape. of that and products today. done fitness, results and was popular value-based resonated reported all and our dedication start year outdoor moving amazing customers this our everyone. business during recreation safe, became the to want they today morning, stay to biking, thanking good with of The And for their The work backyard broad care as and along of Matt. trends by like over year, worked I and record us customers pandemic. work for customers a you, ongoing ongoing we forward distanced taking activities trends. our at-home Thank team games Sports the of fishing and joining are cooking, last Academy. socially in to Academy because even with sane, where selection the more XXXX and camping the they've entire

and been meet options buy stores Our being in customers’ needs, pandemic websites online open our safely there throughout offering the store new like to curbside have pickup. and pickup by

active their current expect newly ways environment. to having being beyond enjoying continue and fun the We customers of well discovered

in made full billion net highs highs. year. company's earnings see record quarter fourth I of reported billion both record to the the pleased the adjusted have pandemic full taken and year, both and $X.X well that for into for reported and both with before the fourth the XX.X% the Also, have We future. As results in Today, Total $X.XX quarter and year. comparable competitive income million call, for sales ever. more of in year the million hold $XXX.X the for quarter $XXX.X and quarter sales and the We've continue best benefits were we us investments key our the on I'm last than shared initiatives will seen the we the the made history.

of merchandising, quarters by comparable and our assets. consecutive to power We growth positive of continued all improve customer to were the our results and now driven to back achieved profit our omni-channel, our of pandemic. efforts sales the productivity six prior experience, These dating have with increase efforts along

merchandising the inventory country the in higher being margins based in by product value best double localized to selection. a XXXX, broad, important For compared XXXX. and Academy, yet our a power delivered In retailer we and means categories, most gross having higher digit, turns

for put our Our in work and retailer grow as outdoor leading spending. to to in sports the due position to consumer increase us shifts products has to become continues a demand

fourth Regarding e-commerce the in omni-channel, quarter, our XX.X%. sales increased

compared and XXX% curbside and relationship with we stores tailored our experience, as progress assembly customer demonstrating local store created such and our make including sales XX.X% to the in rate respect than approximately hiring the pickup of on X.X% is With the and services online, that assortments, and shopping More grew for involved engagement. our Buy penetration year. annual our have sales, for in experience that BOPIS, an For continue pickup both free both total store XXXX. half sales having the represented e-commerce e-commerce we customer. our stores, experience in was total ship-from-store, an online in enthusiast items, truly and meaningful quarter ship-to-store, by customer full-year, sales BOPIS, deepening XX% creating and or our retail of to certain value-added entertaining omni-channel to interactive offering

personalization improvements extended to have informative content. to experience academy.com, capability, enhance also management, have search been better to where we and the customer exciting cart invested Our

shop most this often bank card throughout made margin money have deeper non-card efforts holders, discount holders credit shipping $XX or offers X% We on than loyalty Academy card orders of purchase the marketing is we customer and and And progress on our year. more a every program. through the sales Because building incremental we're know more and targeted spend more. online funded meaningful also driving free dollars. on card The

long-term and year than ended at twice strengthened we XXXX. And Lastly, during the cash will of significantly the through XXXX, our are the end use much balance much support the transactions. the market the with cash future our Michael projects quarter, the environment, we turn details. sheet as priorities for half review now about talk debt we as But I two current and to in over help Mullican, and and growth. will deliver forward to financially move to remain to more current intended call results financial strong Michael our to Michael? viable operations in fund CFO, approximately as detail.

Michael Mullican

double-digit record and discuss year morning, how walk going record ended Good in of Ken. with you I'm we margins Thanks, year and to upon through plan to earnings. we the challenges XXXX sales the everyone. and then billion. all record XXXX, Despite $X.X the sales, over by and the gross strong details all fourth QX the QX sales quarter the were build record single mortar increased brick in XX.X% four to net across including a gains In forward. going e-commerce, results market. these Sales driven increases, divisions, every comparable quarter merchandise and double-digit

cross than see of existing customers in the additional and greater the significant a past. their continue within We portion store to to shopping returning with departments frequency departments

expanded and the basis was million. QX sales full profitable increased $X.XX operational merchandise a increased mix gross The and by third quarter e-commerce In an is we gross margin clearance the rate comparable that XX.X% XX.X% business. the increased margin the net XXX year. points XX.X%, billion. fourth a the to XXXX Comparable sales, over double-digits for sales as record company's fiscal constructive and promotions record operating For shift. quarter, full year, increased continued offset $XXX.X that by margin for quarter fewer fourth rate and indicating are A which a sales unfavorable driven into sales the building grew trend omni-channel that

XXXX to For the full over $X.XX XX.X% year, billion. increased gross margin

Turning to QX SG&A expenses than SG&A. less sales, XX.X% points XXX were $XXX of was million basis which XXXX. QX In for

sales, a sales was increased $XXX.X increase million, and was improvements These the all-time share fiscal an interest earnings increase diluted certain of million, compared to XXXX. year, year. XXXX. $XXX.X was share advertising, XXX% increase XXX now income open of of income quarter were certain XXXX. primarily increase property were year, and a strong increase QX to or increase in over These of full income, basis QX are which XX.X% million, a earnings $X.XX our fiscal to record forma forma QX fiscal and were impact increase XXXX. which improvement $XXX.X from in an Diluted non-legacy continued per operational certain over adjusted of to pre-tax which year, driven full XXX% income net the resulted share, costs XXXX, open an And Net $X.XX, for an per in the in $X.XX, Pro performance XXX% quarter the SG&A addition XXX% the compared by items, Pro impact For $XX.X XXX% full over $X.XX, forma extraordinary XXXX extraordinary net in XXXX. XXX% QX which a of in net excludes income of the lower XXXX. in XXXX to The a increase million, earnings of than compared adjusted XXX% over XXX% stores million points XXX% was high employee year compared for of fourth net the the diluted sales extraordinary the a was to Adjusted were through items, terms Diluted led performing increase net many as income of for impact compared per full QX by also XXXX. XXXX. $X.XX, were $XXX.X share, such leveraging an of expense costs was Pro fourth excludes XXXX. XXX% a million, of which billion $XXX.X earnings over adjusted stores, market. increase growth. were expenses last on income the for less excludes items, per

balance million credit and to in sheet, under cash was year borrowings Moving the ended $XXX.X no facility. our the Academy

cash $XXX.X in During to company in flow fiscal generated XXXX, operating XXXX. compared fiscal billion the $X million

third received reminder, a connection IPO with of in reported in proceeds the the were our quarter. majority the As

to However, resulting on in approximately over-allotment $XX.X XXXX, shares and an sold of underwriters’ net November million X, X.X pursuant the proceeds. company issued additional additional million option the

balance we to reduced our debt strengthen mentioned, and its million refinanced gross remaining the $XXX As Ken XXXX. activity and by November, debt extended completed through company In $XXX sheet. million approximately refinancing in the

revolving We our also billion facility through credit $X undrawn extended XXXX.

on how to with business as lower in capital year inventory, than our terms with deploy million we priorities. of by In growth we we year. supporting capital ended of measured the the investing COVID-XX, a our approach We $XXX and continued began are top allocation, taking the uncertainty XX% due caused

Our strong lower in resulted but fresher sales inventory. growth

we the certain there comfortable team to like is in more with we While diligently stock overall, which to working have position. would feel products replenish, supply current are and our

year to like $XX over business both driven move into expenditures by That can are XX there $XX the comments in continued launched prior development drive In compared million momentum capital we pandemic. and the strong last into XXXX. totaled the would XXXX, my to of million XXXX. has to concludes Academy months, we fiscal XXXX, initiatives believe heading business. now main about during on XXXX. commentary the that opportunities the four For to the in I fiscal XX

the new that shopping many existing First, data interests, Through we capitalize sales. They're new to are and Academy. than just level, work acquired They analysis, from which velocity lifestyles, picking on mining customers items lead newly incremental are up customers. categories. transaction know shopping and new to doing will hobbies more buying of then we

customers. bigger lower credit transaction that basket more channels, Academy personalized a We data, and Academy through can using card at to this which By shop also increased holder type holder of we level drive will promote costs. sophisticated, lead promotional our marketing sales frequently digital more than non-card know and

were outdoor are ammunition, that Second, through categories we replenishing equipment will and play ensure we equipment. most fitness XXXX, work inventory and of to growing just constrained certain

but Third, on in to the that numerous and benefit the from preparing categories challenged we XXXX for to are positioned were poised reopening of are product capitalize fiscal economy.

this of back apparel year. benefited many and to impacted licensed equipment, crisis, were the to key and return While team our our and school of should categories businesses COVID-XX apparel, sports from normal adversely footwear as several such

to driving to several of a to drive growth, where management and of all accretive sales are sales. each these of should to in strong margin rate not addition and have not our they meet modified shortages, In inventory businesses, but sales was enough more there compared sports products trend traditional buy Fourth, are support inventory the normal their a allocation initial improve categories seasonal will on like and year, we worldwide line. planning This our return mix where our we additional demand. water grills XXXX to

our of because with that we customers. we to we strong incredible fiscal development our of and to deliver are As an built the XX% to stacked XXXX. deeper XX% is basis. estimate range up key for X%. on are company we can sales to stronger, the have following confident XXXX, continue Comparable X-year is a This relationships The X% our team; forecast begin results continued down providing from the initiatives; increase

results. Capital average Lawrence, million I'll range are XX over As range therefore call full approximately to discuss store and from to This net expected a now interest from shares an $XX turn had a reminder, $X.XX. to for outstanding Academy very million, to the $XX million approximately retailer Merchandising $XX quarter per assumes XXXX. our expense is year to Diluted expenditures weighted closures rate XX%, of essential in category forecasted share diluted to Steve Officer, of of and are the Steve? earnings year. $X.XX tax and shares million. Chief limited

Steve Lawrence

Thanks, Michael.

little and With in branded carried our of in posted of rebound, Now with driven in the performance total translated QX our footwear. Apparel comp categories inventory fleece. apparel rebounded business our we quarter, aligned half division. holiday XX.X% pleased strong the XXXX, company, sales comp around by the a you which with we many continued first quarter surge which in the strong into double-digit double-digit versus momentum color saw fourth outdoor, in I'd position took In strong the We're like with to major sales for divisions. this a in growth to trend extremely this started more fishing across X the to give trend by camping. the low the

the in not turn While all we limited outdoor signs macro of business of the we during letting the With XXXX of The see moderate quarter, saw of best-performing demand. the fuel our page into elevated we as for outdoor any reset the the the business as in sales the a deceleration anticipate will many of up, indoor their continue assortment fitness continue floor to all to with is cooking, trends in versus of to more showing fitness prior is as hunting function this demand the supply categories new home the outdoor well which performed very the categories that XXXX. business QX build sold We home out games, quarter and very people to to which connected such equipment quarter. Sports was equipment well and gyms. Rec, & giftable many bikes, fitness all during and

We expect this XXXX. carry momentum into to

many As both ship. are major are our I did each products a businesses quick to run-through very in X these items that divisions, you'll realize expensive the that of

new the As a we our XXXX, our our curbside pickup ship-to-store a key launched of option increase for prior customers. BOPIS an QX. in result, popular Throughout BOPIS the has and capabilities to in spring rollout for business to increasingly were become quarter. with These capabilities expanded e-commerce XX.X% plus last driving

customer The by ship-to-store warehouses out our to capability. holding stores purchased several and Friday which inventory BOPIS stores vehicle. wanting able securing to us the product Black it Over and out our customers pick the the great came XXXX, over example all where and and trampolines the to to then own search advent the their was our online most with the it town with A BOPIS, in and each, having over demand of find growth convenience reach saw in of of the driving of without leave much course goods ship-to-store this up safety utilized many of inventory through better then to increasing having for sold of without to of it XXX sending to curbside allowed drive weekend we target being it.

you a we're trampolines big, Traditionally, take As customers our store bulky lot store. space With that over the by to items never we'd of consider quantify up in and capabilities, sending stores. single way. are a XXX in to know, able demand more new this take trampolines

couple of across flowed quarter, the emerged. of how sales terms a In trends

categories of throughout First, outstrip for of of heading QX bicycles year, categories. accelerated as and in the during such creating most high-demand the these actually We quarter. we replenished holiday. several most aggressively for positioned well categories to demand product saw scarcity many the fitness our coming marketplace demand year into for be in inventory supply Throughout customer hot-trending equipment, the

in we momentum sales us that sales stock saw these good leaving in should restocked, the gives we signifying This and if XXXX. year, the to accelerating the that all see get the maintain on levels categories, As continue of confidence these we course we categories trend QX, are the still of in the high-demand into back can stock even some in with we we did work over table.

prior categories previous years. that we Another earlier is than giftable versus holidays buy saw change customers in

to we strong some to there's categories we aggressively sale. this of spring/summer sale this while to a during As such buying in holiday discount that carry XXXX as we not water seeing start set early this, to accelerated them still of the Because saw have achieving immediately sports. attribute ride-ons reacting have closer when in these are versus would November, traditionally categories marketplace availability. to and categories into and constraints selling of did room, trend supply rate of such game some We'd anticipate already We sell rates customers seeing as Thanksgiving. high holiday,

year led has most prior saw week period, we out more XXXX, shopped part lower the the of by that in pronounced inventory points where itself. less our crowds. us sales strong inventory, Connecting that position marketing Black levels years. margin clearance also traffic XX% the cleared We the early drove touched end of during the was to XXXX. This basis end on cycle. these time across worked all pure back previous the positive as regular-price while large a less hard allowed early we less was decrease with February forward well and promotional our having price half stronger prior of to our on total inventory inventory of than some that QX roughly margins to from lot had to down avoid than weekdays in was us contributed on the than with week selling regular we holiday inventory to was timing we The spring, comp early rethink was was fall of finished we clearance to with this This that we much It's the third rate versus for years during trend frequently Thanksgiving clearance Year gross messages. customers higher clearance smoothing of inventory ago. XXX composition as more trend much improve staff This already this XX.X% of half accelerate about be our Chinese the impact the The and to that level ensure the in result QX facing. trends had a as coupled was In a strong has how mix New with better in year, to promotions, at sell-throughs. the merchandise. AURs I've Friday stores is order about to less receipts a quarter

in into us the in the through to And containers we've the has we allowed by of in there ongoing year and should been the position While in continues be as partnerships, challenges best all inventory space, successfully a of both the end strong through All got challenges. navigate supply summer and transformative be past experiences vendor terms you through as nimble I us overseas, domestically securing our over cargo the was to chain result, the truly Academy. our sense helped drive QX. well strategies as highlights, how made more the that better, of will of position went a Hopefully, went business and we sharpen months. have many year challenges that operators. This us XXXX for head we to QX

trends One the we introductions. customers business and product capitalize carry will way to the trends past while into the are that opportunities. well over emerged fill these brand head and to the believe fuel on year also positioned to attracting continue many that is new that we of forward As new continue and we through launches XXXX, to

helps outstanding Our strong. to new with space on iconic a bridge plan at with result, footwear newest to better proprietary athletic And Outdoors. such our better Under price brand the Freely our The Armour. at tier the We're value. initial opening outdoor brand fall with athlete-inspired Freely selling The brand Adidas customers launched price and an is us our as in brand a provide been in between an comfort function also brands that 'XX. of into bridges points Freely our best Nike, in positioned apparel BCG goal is or sizes launching plus expand Magellan February. as has brand, and we

that that tents things Outdoors focus you Magellan on be new such can find in we XX seconds. products You'll and a collection exciting to to and of by agree futures pop-up more fabrics the rolling are person call Hopefully, Ken. all performance We're lot stores of of I'd apparel turn innovative at a also technical on here Academy. over as new going carrying set to Pro like are where back a footwear. with now up camping, out XX in there in one

Ken Hicks

Thanks, Steve.

record a our have so was the new the in to innovate that goal gained, we'll position is market growth. retain customers implement XXXX, tools and future our more year, have that and XXXX continue to will While built we drive we that

strongly and continue feel in I it working, that Our is future work will to environments. strategy

shopping increasing checkout by by and seasonal to increasing building our capabilities our omni-channel replenishment completing digital power to improve one, continuing localization, approximately marketing service management improved to priorities centers of and and the processes enhancing content experience, search mobile store navigation, stronger launching presentation an library, a logistics. for the and stores; improving our and our app business utilizing continuing management and strengthening merchandising experience; improving our Our enriching website delivering by four, customer merchandise labor work deploying our three, experience remodels, drive customer a and efficiency XX e-gift in and and customer presentation and effectiveness by improving channels, by to a by two, year options; supply fulfillment targeted communication tools, card performance message and planning efficiency five, and chain by effectiveness of merchandise refining optimization allocation systems promotional the customer; targeted to focusing on increase distribution our creating our robust and greater and effectiveness and customer and are: improve

our a was by pandemic. there XXXX retailer as outdoor improving on post are sports challenges many for and Thank of the ahead positioned Academy, feel In we know and closing, strong focus future us. of for is vision the While year, fun confident long-term We're towards best are focused country. and in work the being well our you. on we delivering we that the during all

Operator

first Our with comes Christopher the Instructions] line question from [Operator Horvers of JPMorgan.

Christopher Horvers

but thinking cadence And about gross about Just not guiding versus top from how guidance. to you're as any of were then my first that, about the a SG&A question us is over know thinking the really you're Can helpful. perspective of how quarter? how quarters the a that you thinking line during margin on commentary specifically, the well? sense you're related give I you year would be

Ken Hicks

Chris. Yes,

-- last was was were we're We year but giving not -- the our quarterly you quarter. As quarter our -- easiest was our said, up first to X probably comp. guidance,

the were XX%. up X then And quarters back challenging, both Second quarter up very XX.

we inverse probably So that our of I the that look at -- it that way, that's think feel biggest you opportunity. when is

year, feel less In up the we've and positioned in more the a quarter there the second early we're well too. we're So against of quarter. back challenging year, got part we was

Michael Mullican

we gross one-time margin, this last declared, the never did repeat hibernate to respect won't G&A the with year. probably a that expense we and really savings on pandemic for prepared some came. year we Chris, year, winter G&A Yes, have side, and was When

So back force We our term frankly some a advertising. labor store we employees. make sense. would to on level took that pulled down long furloughed We

those. won't repeat we So

you where learning to of margin kind that And that -- about and that's gross got we're up these will from gained. we as have if business, we ground of lot should our programs at, normalized we're business gross benefit then year, can mix we the like still margins. planning On more which progress initiatives think this we've not progress. mix help machine a that the still of a of side, and give We've our

Christopher Horvers

Understood.

like my as to top on it like of the is, you sounds So saying look if line that get back the the that, just obviously sort side, half you're -- the so But follow-up of great. into and stack you up. at XXXX feels to XQ an the gross year, sophistication you opportunity merchandising be on promotions from be better margin business then could gross there to and of to offset clearance flat And and and mix such the lower front, is expect essentially that margin it flat?

Michael Mullican

that accretive will next is And margin this we one. business that all were have rate challenged of mix year. categories year a some think I yes, big Well, be

team licensed of You footwear. think certainly sports, apparel,

categories So look the difficult we've we are goes, normal we're know We who the cadence We knows? far across back taking looking to very we're read. forward do coming as share? at, got levels. demand of most to to our And those a with share. as We're good It's feel pleased across about that, new customers. And we what that business. taking categories strong environment

to progress the like costs. them those. some 'XX, with the We're delivering the Our leveraging targeted are our card. We're that of we've what do. happy to the I about feel merchandising begun good with happy Certainly happy initiatives. We're with investments We power We're compared deliver. We're to that. marketing happy new lot credit across everybody before we apparel. And will with expect customers that's It's side. are time, we It's see And a and to returning they've And the coming showing. velocity. customers cooking. back the they're we're existing they are returning outdoor store. and It's shopping on greater first happy? for shop with that categories customers never the those categories and of shopping think outdoor

of -- all we're through look How when year, it's unusual we at we TBD, there's lot a the the it shakes environment pleased progress. with as very because our know. a So out initiatives, just

Operator

Our of Greg next line comes ISI. Evercore from with Melich question the

Greg Melich

margins on down a to the that guidance XX EBIT If to to a take little sort need be I question. I than how right, Maybe maybe it, that so looks just comps of wouldn't a follow-up much it bps year. sure flat, be to margins like better I And bit. bps would you're midpoint the make for Chris' XX want be down? expecting the EBIT of or follow-up have

Michael Mullican

there's certainly gross the ballpark one-time Greg, helpful, be frankly mean to said, lot to of happy able working the We're there. upside being again, we're things we savings like just to a uncertainty think margins, about tried happy with our That Look, on the feel won't feel a with uncertainty, margins. we're repeat. with again, operating to our those initiatives. the Yes, the right there. We margin expand the G&A, of in want We -- you're out I and but best. there's again, do that And And some good the guidance. expand operating expansion. think there's lot being to I we to related we that's

Ken Hicks

and flows started, Greg, is picked challenge and well, another obviously Greg, the There up. of stopped, that year, the businesses. the business did were downs this real businesses ups

And that's we're done other I've That's to the past locations, comparables. That ourselves in in to we're term, mid-single going leverage would to this it year, frankly, makes the has it to not challenging in more position challenging look a in what necessarily the for in quite be here, the long that. -- we so team past believe that more And low long and and little we towards. but to comps. what the able done it's do working term said,

Greg Melich

That's that? balance down is and inventory if this great. take And with of you my of to should flow, that's What should sheet the million. if we cash million, I to generating $XXX maybe do turn of said even $XXX follow-up you to million CapEx, guidance, me as the clearance. XXX Half to free year, you with flow. expect be, cash But $XX million

Ken Hicks

There's be a ensuring of uncertainty company. of stability a is to It's there. first Our challenging going the lot priority out the still time.

company is the stable that in sure position. make a to going we're So

to have The We doing that invest second over online. a we is remodels the to continue XX and remodels. grow this have. to company lot number expand a work of to still We're the in do year, of initiatives

start Next stores. new year, we'll opening

to we -- some and omni-channel we're in do and allocation. systems have and And our so planning work to in going still

to what we're focus how stability we as and reward to do opportunities. to best And investors our So continue growth. that. on and recognize going invest this way go is can the our At will time, forward, and and in options we growth evaluate is we

Operator

from comes Credit Sigman the Seth question of Our with line Suisse. next

Seth Sigman

those dilutive. changes which was be assume factors frame What prior online, own thinking process? versus a your should how versus levers? was I there quarters. to the it's you quarter. was seen had So we impact, recent difference quarters? to way you to what on environmental about in margin, the from considering And mix Up I gross pretty wanted the specifically XXX up acceleration what we've impressive follow in a had big basis points Is And a was

Michael Mullican

and Yes, I'll let then go tag But with on. Steve. I'll ahead, start Steve this,

Steve Lawrence

the the we we From I place. were a more perspective, getting were year markdown work of gross throughout And doing right think of the kind logical the on getting of been I cases, in Seth, had getting lot been current. Sure. had markdowns inventory catch-up playing most margin as more think our we a

right good culminated the kind say were where strong that a up really of stores the in that also cadence inventory right we QX better I'd So us get markdown place. getting better in sell-throughs. our in a on caught helped really natural localization,

of is us, contributed. we That as we be as said I to less unusual offset put to holiday, an we're think any promotions. opportunity get, going promotional. certainly also forward, margin the a We promotionality about going long-term that to mix a have margin But back as in. tailwind that of it for Michael of off it would a -- we noted, say earlier, it help was So the did think will was which take lift. you little more kind not some would the sustainable additional

Ken Hicks

Yes.

Seth, to things, in see of helped as we the the compared quarter the which apparel One resurgence other year. earlier that that fourth footwear, in and did mix the of was

Michael Mullican

Yes.

January Seth, been the historically that other look, at a had is happened I empty Academy thing, of calories. lot think

for clearance higher-margin back we sales traded the lot quarter. sales off in of a of So the certainly half

Ken Hicks

is. understand I sometimes which steals Michael line, my Yes,

Michael Mullican

a it steal Ken. lot, I

Ken Hicks

you December. show good a good me January, show Show January, December. me I'll bad Show a bad I'll a a you

have what So would we historically price we saw a more in January, in we regular sold it markdown at sold at December. it

Michael Mullican

you that's a you allocate what and and margin goods you standpoint. when do from can you that's buy And correctly, flow

it's happy it, progress. the -- very innings but on again, early still with So

Ken Hicks

Yes.

Seth Sigman

opportunities follow-up And line. Okay, one on just then helpful. the the very in 'XX top on

the a pointing any Can And lagged some we there head especially just into that are number potential season happening that sports categories these to of return You or the did categories as that team last bit signs to a here? recovering, early year. of more? return little mention of start dig you into

Steve Lawrence

a question. Yes, great it's

right So literally definitely, a saw just ago stopped. all around literally these categories we now, year

couple talked where we about where times. categories had like a As day had of zero some a it we matter a of fact, fleece We sales. we had

that We with things later And but talked to definitely So year, roaring as better, by team the going certainly the to friends. that normalize. the businesses business where in little other year, the people XXXX be a category seen lot the sports business but water probably on we been to rebound One of of off haven't they off definitely be versus we license continue driven occasion will strong. business. of getting a probably bit and of will us is basis. be to start. a going A that helpful or strong event seasons either the an continue license have yet, little strong seen is our What's anticipate business to last a Y-o-Y life will traditionally season, kind it We've can back through. it's it get event bit fall a categories resumed, those the open look We back getting fast watch about versus we some up, where to in for not that business. there hope sports as starting more has are things at we've is had seen time to Fitness a been. to

Ken Hicks

that see Day. normal go we be as a through the elements, more Mother's we'll for year example, and other Some Father's will Day

Steve Lawrence

school. to Back

Ken Hicks

not were Back and of X to apparel. the and apparel will business because the well of didn't this year. non-events half actually be our the of or back Those than year second that last year first quarter, quarters school. the And last perform the -- type first year buying people stronger events as said, -- we're footwear in Steve weren't

And there so opportunity as we've got those normalize.

Operator

comes Our Ohmes the from with America. Robbie line next question of Bank of

Robert Ohmes

million you of something maybe Listen, the of doing these color us maybe guys think year? great. them, customers. And the I a end new to you remind you quarter, the at said Ken, And but mentioned doing had of then keep there? And give think can you some of ended course X I about customers. I you things update us an Can you're other demographics follow-up. give you you the third are -- the acquired it's guys on new where any

Ken Hicks

there the markets. picked one, higher over increase was -- up things a year. in non-heritage we during our greater new we that Yes, saw million about them: a And X shoppers

became were diverse terms So stronger. in not much in we were places of more as more They we strong, ethnicity. female, where younger,

really And families. this good about customer, we so feel more

frankly, and number they to base we we and our them And because pick were we so feel the we picked picked where up base good up significantly broaden that the consumer -- about they have. we who and, who add quite

Steve Lawrence

also shopping a we initially which them the more store, think other the get going sticking introduced the key They're of seeing into. forward. is gift-giving just kind categories tailwind with categories. cross-shop they're be not into they We're That's of across broadly could

Ken Hicks

the our with Which obviously new strengths, our with that seeing discovering a assortment. the is they're core of of that store. one thing, areas which of customer, also breadth And is which good our we're fits existing

Robert Ohmes

And impact follow-up, should fourth about we this stimulus did then the a to has stimulus it be helping quarter, and talk how impact how expect great. just in quarter? much how -- can That's you guys you

Michael Mullican

helped in has that has from general things in long obviously trends it TBD. saw it? the very the The we stimulus continued on Well, mean How throughout different. how year. goes benefit that. the a lot we long early I are or pandemic

overall, there's helped absolutely only Now it we there's who were competitors pandemic, the has There's I early but part direct more, wallet through in our -- think do that competition closed for our But competition. from more more have the not of business. general.

Operator

Imbro comes of Daniel question Stephens. with line Next from the

Daniel Imbro

start to one promotional kind on want of backdrop. I the Ken,

does or think a are use to gets dynamic every price on every Academy to the You've low-value valuable more low-value? clearance And good in quickly to trends the There's of mentioned sales that dependent? a does look competitors to into hold promotional your market to when day you're times you happen, try since here traffic? that day market as in not become foot does if how today, proposition customers few But already now. slow, price more activity. competitively fit how do lot Or do

Ken Hicks

I Yes, answer kind backwards. think of I'd

the vehicle seen good and price retain to we the customers. everyday been time. a and resonates both low our And think have us that for customers with well I all it's attract

every day it's every because price, believe not I day day -- we price. more much value it's that do because So than the low every value

So promote value day like a certain things do offer certain is every of on periodically ours. said, our items, some strength vendors That that we windows still of and that.

use vehicles think are now, that grow we to sales. coming have So we to regard retailers of business. drive most and promotions, right With good the traffic back can seeing I

Two, the inventories continue frankly, the not need not ability quite to, there's one. because a to be there's So challenge.

I promoting, will we've are better value point than not need the we that way point. inventory. The before promote. When been. be promotional is the promotions to frankly, some drive and of and our less past. the need intensity There's traffic think won't consumer would much need this we to product. the that determine But in the the still in go consumer. we but the to are those seen see We to in. want neither The of frankly, of position, our that to excited competitors resonate don't quite at while at our acceptable retain quite a do wants some inventory is not And I it shape in We competitors a there's we consumers -- to need we to, and some back they position We might. this had will be

Michael Mullican

that, the think of all That's it. I we'll right, that optimally, we're the buying if need And beginning we've that addition chain allocating and it, the need some supply leading Yes. effectively when do counterpunch is us antidote I it work to laid in buying that take way on. to. to we to of think be management. flowing to, the we don't -- correctly it And here. offset But to We'll it in groundwork to

Daniel Imbro

markets resuming opened And as strategy. there then unit was Is the stores I my actually think that you openings you're pace reopenings unit then the coming follow-up question in Michael, market. just the when or to the relative seeing comments, and years? you are the to thinking certain of your are markets? anything made categories noted you're guys years going to are in estate legacy And growth of ahead why over cost last few about there schedule, how outperforming probably real in and those prepared the your you've consistent with on progress legacy start

Michael Mullican

intentionally growth it's consistent, in that's that's those the to them to markets. right, our And the get thing the really to paused them right in I'd we assorted legacy one say get get correctly, markets. because across marketing board those store

really board in markets. across so They're And it's chain. the the all the leading

what to again. like, begin looks future growing we In terms do of the want

in lot XXXX that prefer with United a begin X We'll grow of we plenty of that. States and to of have doing because there's stores We're do how use that's the said, grow. X/X that communicated our right now to before. Ken XX we've As to in only to opportunity opportunity to capital

Ken Hicks

we you what up. we those and see work, to we and know step capable able I focused and are our now, be thoughtful of programs about as do. And know to those like who But right that me

they themselves. do to take but opportunities it as we in going the going manner, also we're are thoughtful advantage to so present a of And

Steve Lawrence

a store we're in And trying We're Where all we'd to in also the in doing not We because more spend store, stores. past, XX the year areas past. how have alike. store do look probably new opening we're thoughtful the just a remodels that way them not make in that more really to little too localized done sitting differently and we're doing. still we've the preferences this remodels We're much community. remodel key of money based than be in about off

investment we've a got think So XX books, those of that going really to us for be on good also this we the and year. that's

Ken Hicks

to that And supports to see investments there's in grow true the other really thing, opportunity significant the and making We quite frankly, is that, omnichannel. a continue our we're dot-com to that. And be working are business. -- stores we

look on we those other grow we as and markets, dot-com the vice the capitalize dot-com we saw non-heritage will into to stores the And help us there. other expand versa. markets, as grow So the geographies, to in strengthens

Operator

Our next line Guggenheim Securities. the Heinbockel comes of question with John from

John Heinbockel

Can thought those the the Let kind of business, all stores? then And you you that me some long-term Is opened it at your COVID the X -- fundamentally are a at than right, think of that margin start have that stores same year right, the in can and of be rethought years, profitable of profitability, ago? the capabilities, with, fair? this stores would changed have have you profit has targets as point, last more the rethought you right? in markets, be the non-heritage level the of core

Ken Hicks

Yes.

we and in position of markets, they particularly in our I'll some the Michael. But non-heritage -- markets ourselves we start, not to did the could larger the that as those heritage over to so markets Michael can me is and turn we market those them probably it markets are position. markets, team because are the frankly, Let our where of That's capability have same at way entered those to the positioned in go forward. we as how were we that one at of them estate well looking now strengthen we things optimal get real not, and quite then Michael?

Michael Mullican

answered well. Ken it No, think that I

subscale. I some markets these think the of operating we're opportunity is in

when and X to your a what, a and profitability cost with got or another guess X fixed X designed or designed DC gone then in market that's X So your market you've that's assets in And your X stores or maximize X. market into X. X you've stores leverage leverage and really for for

So profit can as think parity. fill markets them we out, we get to we these absolutely,

we a at rent, challenge. today, that be which is new can overall markets we're than and get they the of But there. optimistic they're them closer Some have should higher

John Heinbockel

in that, you there's lot the space, to And a to Do point, Or one X think the is spread couple program maybe of because as market? right? expansion to X you're or right, about, you the white a more clustering, -- do out your forward years? how next when going you over to of it a idea follow-up about think do

Ken Hicks

that I more are. where a doesn't powerful and make think history as hornet work we're that to being a we our learned going we from butterfly well. sure be We're of

in appropriate will And we new may more so a at we concentrated where but not will much sure we once, all a I when -- think occur markets, enter enter time reasonable frame. It in position. we make

Operator

with next of Our Capital Daniel the Loop Adam from line comes question Markets.

Daniel Adam

quarter year. Great strong finish to and the

what into for for baked you in-store First, versus up range guidance that e-commerce drilling down do growth down year, on the to X% only? the have comp

Michael Mullican

it getting and grow year even channel right to the piece company's But they forward. a out going great on of do we to going not by now. large e-com it break had We're this year is obviously the investments, expect

be we breaking e-com but we're a channel, down it by sales driver. to So expect not drive --

Daniel Adam

days sequentially serves If you versus any How on Suez resulting then of that have, at And my follow-up there the think million alluded this both XQ. to expect Great. was memory Okay. point? declined specifically. inventory XXX you like Canal absolute that is basis, me, And last on do inventory supply an quarter inventory you catch-up but and is working much get. do hard from to you'd I disruption think Inventory, capital and to chain blockage?

Michael Mullican

sales over then to think million chain. getting to these up Steve pretty of XXX categories We're just But and there. And still not limited we flip that take on I Overall, the are supply call And I'll selling position. it at back would XXX or categories number put it it's stuff. more point. this in the a the very the most support Yes, million, our I'll quantities. of an acceptable number minimum presentation we're quickly,

We're fast turning we're a getting But we're it So product. Frankly, million as we XXX probably it. get selling it. good is the as number.

Steve Lawrence

firearms We and in feel ammo maybe should the shape like end with categories. by the of we the QX, be exception board, of good across the

In minimal actually in Canal, It up really this for in doesn't a that. the morning. of it's terms terms a -- impact It looked It's isn't recap what's of at rounding us caught I us. Suez error.

Operator

of from comes question with next UBS. Our Michael line the Lasser

Michael Lasser

of lot being less it's just sales a up the profitability the stand in margins e-commerce for outlet, an you've given the improving big made your strides does of and channel Where today? seeing Presumably, there, picked that now store. you're clearance, of

Michael Mullican

Yes, experience where e-com. an don't Michael, that you're T-shirt, right a on have and want online pay large things shipping we is we're there. free they the think one in us, advantage And pick-up because X for XXXX half differentiated customer One really really big Selling And is as skews The and store mentioned. curb. more off-mall. we towards anyway is that first pick we've particularly shipping There's know, can business for in-store you that you losing formula got drivers. shop been bulk that. a the the up at off program items, or a buy which

goods, the business will mix we like where parity. more of business, the entire it -- profitability it's is. of it it's And there get again, but able margin just operate So close skews we're It elevated a never to where the to because it's to at hard again, profit.

Michael Lasser

success that products of the that get the major are specific it And vendors, couple the period, have pipeline given particularly is in last that they're positioning has Academy realized upcoming you pulling that quarters, the on improved might has the us can how back the not in considering with Academy gotten any distribution? past? in examples follow-up of might in that its My give

Ken Hicks

our we recognize And we customers very vendors contact We constant We a valued them. strong bring stay we Yes, us a do and us, have that that a age, they in getting with things are women. new in supportive And they have importance they can't very them. of told been Yoga, what for account mix places of They they've the that and female have so customer bring concept like with also get very terms which relationship for families, recognize in of the they sport. is in Nike difficulty them. ethnicity, other

We Yoga. have Nike

got [Air]. to We've this camping that our adding We North year. have Face we're stores

them. And and outlets vendors these for the as we've the So we got their have one I an are both support in that invest strong or But and -- become us us We've with hard in go are to work we've product. it's good They we think strategy, opportunity some We their of of strategy. away, relationships. and them that capital fewer there. been in out few there partners. out continue

Operator

comes Our Tom the from Wells of next Nikic line Fargo. with question

Tom Nikic

meaningfully there breaking the the bigger e-com. versus move the longer you you're to And some on the XXXX guidance. would seem we've the penetration XX% in want other of for penetration like higher, industry. just I given that still rate up know e-com But out in rates it could had obviously I term, follow now XXXX So out seen stores picture,

XX% What how XX% online be of a that? think would online do Any opportunity here? business a helpful. like about couple in Is is -- business? years, this there So where you a color the

Ken Hicks

X had to XX. customer and went we We're goal XX, allowing the that. We to that. we beat a long-term And grow from of

okay, We're it because of letting margins as are we And this not with a move have to And number we're profitable said now so Jamey Traywick, what shops. for. how it's dot-com -- said, XX. that customer reasonably customer operates we're up the business is came looking agnostic back. the close. it. Michael through she But And We're earlier, who the setting

lot and be saying business. significant at point, don't we a problem we -- really online. about. of a talked both of product difficult to very kayak is But much So customer and treadmill Michael or the as a are e-commerce truly a have some omni-channel element a our not will trampoline. between stores And I'm or more there's Steve as ship, Because moves our

for and to big We are that that's come us. who customers and pick able plus up, a support our in

do. a of our that provide we lot capability that so competition And can't

of that's hit going to our game's XX. one won capabilities. I And so let say, determine hit But I'm I'm And see continuing differentiating dot-com to the going to grow. that. when not the okay, we customer or XX, we

for they're going experience managing search with to the to make so far invest -- us. saying, it, with like that how we differentiator things new And best like BOPIS we're we're business better it." supporting sure one in and curbside. a you're And the at the of new and it's big payment and capability, capabilities, that "We're going to And in it going we're grow

Michael Mullican

Like the key. And stores possible. that's make the it

Ken Hicks

the hip dot-com. at The stores are with linked

Steve Lawrence

expansion, the sell are store store. for some us we where that's point that basically at our originate dot-com business Candidly, they helps of And us. from kind I grow XX% of hubs the think, fulfillment because the goods

Michael Mullican

triple-digit did year because for and Yes, stores in-store e-com we this the buy fulfillment comp we have pick-up and online it.

Tom Nikic

more and Understood, one. one if ask quick can I

Michael Mullican

Sure.

Tom Nikic

you're some in Texas. pretty the the last sounds month, there year. But like weather It wild generally with know was pleased I start to

Ken Hicks

the days. here job. great impressed Yes, did continue had closed. were belch. for -- I stores it more the dark I the be hiccup And but team. team, more They office was we with a it the -- that was to -- sat a and in We We in X

I that. end time. want But they of down to overcame to make period at what of time. period when a it we of report, for a was closed it. were "Where hiccup. quarter the make our DCs think I Our it?" a brief And is go, Dot-com want you'll that's goal was And for I the

Operator

Quo with comes question Zolidis of Capital. line John the from next Vadis Our

John Zolidis

investors focus are a maybe of specifically, know been going And little increased the customers, bit vendors? new the a be bit could the might seeing be about customers, back excited, touch speculation and I for just to kind we've has I of this pipeline consumer vendors? vendors things to here, new when And innovation I you discussed lot so long flip how seen result to come on know to that but products of the merchandising, a did Can haven't past? it the innovation know us how in about they're continue stores, see you I you a from wanted the conversation talk able changed case. you're there that they among from to as a environment? seeing they they those has to question but bit. Are the you they on the bring about the

Steve Lawrence

some sure. Ken I'll of on in. I my them also and in think of talk remarks. seen internally, jump working I in this then we're first and can the start, of things in some necessarily interrupted whole that I mentioned can prepared Yes, terms mean we've don't process. I

the really are like innovative down cases own the We thing and private year candidly. coming vendors where some business got We're Pro from sports. team interrupted we've a our have the was last Freely. some seeing same Magellan and pipe There product between brands,

candidly sell. newness even lot the a So a last delivered of really chance never that to had was year

the to And the those continued product But interruption. newness So product this ship the I have that, a vendors seeing big year cases, in similar. seen would way or fairly newness. we when the is through a all haven't diet of this that continued say we're

Ken Hicks

Yes.

will you continue think I to see.

there's IFIT fishing. One that growing. tremendous out for tent with in things with of of Vendors got And coming is Connected you in in alone fishing, fitness. things, the we've happening Camping, pop-up one what's minute. a example, our could in is new things, capability and up fitness the equipment. a under put

sports. and seeing in team camping footwear, some newness, So in we're things the of

actually I'm So excited.

developing, actually think did but were the vendors during things didn't they one the out. still get of I hiatus, the that it they

they as more bring -- bring much a things they that So year you'll there said, coming, out. they to go as forward out weren't as Steve didn't was probably we see things those start newness where as

to we're going so compounding. see And

John Zolidis

and Thanks good luck.

Ken Hicks

John. Thanks, Okay.

Ken Hicks

in the best it And offering them. I and the are Okay. The call strongly the driving through I That the for assortment, great mission done outdoors on of in our continually towards run. everybody to we for all experience. to country by And and about retailer job. future. team and we And feel We well look said, for where appreciate be vision are. we has sports we're our the long forward participation. the value fun thank a obviously again, positioned

We're pushing a said, we're of all We to have the consecutive support for quarter time, the comp at the nice we and we the are call, it quarter you. And for support that our run. in although think your and appreciate team the comps are a long working the sixth investors it on not keep going and driving is who just to forward. in profit. But of is hard

So thanks again.

Operator

teleconference. Ladies and Thank does conclude today's gentlemen, you this for your participation.

time, this disconnect and your a day. wonderful may lines have You at

Academy Sports and Outdoors (ASO) 30 Mar 212020 Q4 Earnings call transcript