Academy Outdoor & Sports reported 3^rd quarter 2023 sales of $1,398 million, a decrease of -6.4% over last year’s $1,494 million. Net income was $100 million compared to last year’s 132 million, a -24.7& decrease. Diluted earnings per share were $1.31 this year vs. $1.62 for the same period in 2022, a 19.1% decrease. Adjusted earnings were $104.7 million compared $136.million last year and adjusted earnings per share dropped to $1.38 vs from $1.67 last year.

Academy opened five new stores in the quarter and 14 new stores during the fiscal year. The company now operates 278 stores in the South and plans to open 120 to 140 new stores by 2027. Warm weather and lack of consumer confidence were two reasons for the drop in sales volume.

Despite these disappointing results, management spoke with confidence about the future and the opportunities with the additional stores. Short term, they cited that the region’s weather was now much cooler and that the Thanksgiving sales were excellent. No sales figures were given, but management projected confidence that the 4^th quarter will be stronger than the third quarter. The company believed that its value promotions are resonating with consumers.

While SG&A increased from $342.9 million to $345.9 million, it was, in fact, a minimum percentage increase from 23.0% to 24.7% and largely attributed to the opening of stores. Management indicated that transportation costs have come down substantially.

Chief Executive Officer Steve Lawrence said: “Our sales and net earnings came in below expectations, primarily driven by weakening consumer sentiment coupled with above normal temperatures that negatively impacted demand for Fall product. Over the past year, we have seen customers change their shopping patterns and aggregate trips into the key shopping moments on the calendar and we expect this pattern to continue this holiday season. During the fourth quarter, we are focused on providing excellent customer service offering new and innovative gifts….”

Today Academy Outdoor and Sports offers everyday value and quality through its private label brands that include Magellan Outdoors, Freely, R.O.W., Redfield, and Mosaic. These brands offer an assortment of outdoor apparel and equipment, women’s and men’s apparel, workout attire and more. Of course, customers can also find famous national brands such as Nike NKE , addidas, L.L.Bean, The North Face, YETI, Titleist, Carhartt, Stanley, and many others.

Postscript: This is a young management team with great ideas for growth. The management stresses its value orientation that should do well in this environment. It is likely to show progress in the important 4^th quarter.