Academy Sports And Outdoors, Inc. · NASDAQ:ASO
Academy Sports And Outdoors — Academy Sports + Outdoors — Investor Presentation (March 2024)
40 slides from Academy Sports And Outdoors's investor presentation, Mar 25, 2024
Slide 1: 2024 Investor Update
2024 Investor Update March 25, 2024
Slide 2: Safe Harbor/Forward Looking Statements
Safe Harbor/Forward Looking Statements This presentation has been prepared by Academy Sports and Outdoors, Inc. (the “Company”) and contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
Slide 3: Investment Highlights
Investment Highlights Academy is a company positioned for growth through new store expansion, omnichannel advancements, and existing store improvements Durable Profit Model that has One of the Best Opportunities for Proven Resilient in Various Macro- Sustainable Growth In Retail Today Economic Envir
Slide 4: Who is Academy Sports + Outdoors?
Who is Academy Sports + Outdoors? • We are a $6 Billion retailer of trending VISION outdoor and sport categories, operating 282 stores across 18 states To be the BEST sports + outdoors retailer in the country • We have a significant growth MISSION opportunity, highlighted by our current plan to expa
Slide 5: Strategic Accomplishments Since 2018
Strategic Accomplishments Since 2018 Sustainable Improvements Made to Drive Strong Sales/Profit Growth Significant, Structural Increased Sales & Penetration of Becoming Best in Class Retailer by Improvements to Gross Margins Academy.com Focus on Fundamentals Improved merchandise planning/allocatio
Slide 6: Q4 2023 Results
Q4 2023 Results • Opened 7 new stores $1.8B -3.6% • Gross margin improved 50 Net Sales Comp Sales +2.8% year-over-year basis points from Q4 2022 • Earnings per share grew 12.2% compared to Q4 2022 33.3% 7 Gross Margin New Store Openings • Key hires made to strengthen experienced leadership team ○ Ch
Slide 7: Fiscal 2023 Results
Fiscal 2023 Results • Successful transition of executive leadership $6.2B -6.5% • Opened 14 new stores Net Sales Comp Sales -3.7% year-over-year • Launched new customer data platform • Laid groundwork for new Warehouse Management System (WMS) implementation 34.3% 14 Gross Margin New Store Openings •
Slide 8: Results: Sector-Leading Productivity
Results: Sector-Leading Productivity FY 2023 SALES PER ST O RE FY 2023 Adj . EBIT DA FY 2023 CASH FLO W FRO M FY 2023 SALES PER SQ FT ( $M) PER ST O RE ( $M) O PS AS % O F SALES ASO $313 ASO $22 ASO $3.0 DKS 11.8% DKS $304 DKS $15 DKS $2.0 ASO 8.7% SPWH* $286 SPWH* $11 SPWH* $0.8 HIBB** 4.5% HIBB $2
Slide 9: Strong Performance Among Top Growth Retailers
Strong Performance Among Top Growth Retailers 2023 Sales per Square Foot ($M) 2023 Sales per Store ($M) BOOT ASO $22 $444 Forward P/E thru 2025 * TJX $416 FND $20 TSCO $378 DKS $15 65 ASO $313 TJX $11 60 DKS $304 TSCO $7 55 FND $256 BOOT $5 50 FIVE $242 FIVE $2 45 40 2023 Cash from Ops as a 35 2023
Slide 10: Long-Range Plan Strategy To Deliver Value
Long-Range Plan Strategy To Deliver Value Academy remains confident in its strategy, and continues to execute on the initiatives Strategy Long-Range Plan* 1 Open New Stores to expand the store base by Opening 160-180 New Stores 50%+ in existing and new markets 5% Penetration in 2019 2 Build a more p
Slide 11: Well-Positioned in Major Growth Markets
1 Well-Positioned in Major Growth Markets Five Year Store Growth Plan: Geographic Expansion Opportunity 160 – 180 New Stores NEW STORES: CURRENT • Current Footprint Opportunity: 80 - 90 stores MARKETS + BEYOND • New/Adjacent Footprint Opportunity: 80 - 90 stores Estimated Population Grow th* ( 2020-
Slide 12: Updated New Store Economics
1 Updated New Store Economics Learnings from new stores led to updated store economics, which remain a compelling long-term use of cash • Deliver better balance of new and existing Original Updated market store openings Goals* Goals** • Target is to open 50% in new and adjacent markets Year 1 Sales
Slide 13: True OMNICHANNEL Capabilities
2 True OMNICHANNEL Capabilities FOCUSED ON OMNICHANNEL (NOT E-COMM SALES) Academy is a true omnichannel retailer* We have built an e-commerce and mobile platform that have a true connection with our stores • 75% of e-commerce sales fulfilled in stores • 60+% of Omnichannel customer spend came from t
Slide 14: Significant Market Opportunity
3 Significant Market Opportunity • $175B+ total U.S. addressable market (“TAM”)1 • Lasting shift of customer spend towards outdoor activities, in-home health and wellness, nesting and experiences • Increased demand across all demographics and geographies • Largest sporting goods competitor has less
Slide 15: Gaining Share in a Growing and Highly Fragmented Industry
3 EXISTING BUSINESS: Gaining Share in a Growing and Highly Fragmented Industry I N C R E A S I N G PA RT I C I PAT I O N / S A L E S GAINING SHARE IN POWER A C R O S S C AT E G O R I E S ( 1 ) B U S I N E S S E S (6) Academy’s Market Share 2019-2022 Hunting(2) +5% Fishing +4% Apparel +44 bps Footwea
Slide 16: Broad Assortment and Value Proposition Creates a Competitive Advantage
32 EXISTING BUSINESS: Broad Assortment and Value Proposition Creates a Competitive Advantage Leading National Brands Differentiated Experiences Value-Based Differentiation Leveraging Private Label Brands • Superior Customer Experience • Price Match Guarantee • Team Member Enthusiasts • Everyday Valu
Slide 17: COMPLETE Assortment: Sweet Spot in Market
3 EXISTING BUSINESS: “Sweet Spot” in Market DRIVERS OF CHOICE 1 Assortment* 2 Value 3 Experience COMPLETE C O M P E T I T I V E A D VA N TA G E S • Full Access to National Brands • Diversified Assortment & Value Assortment (1) • Growing Store Footprint • Omnichannel NARROW Value LOW HIGH Note: Illus
Slide 18: Leveraging Our New CDP to Know our Customer Better
3 EXISTING BUSINESS: Leveraging Our New CDP* to Know our Customer Better Household Size (avg.) Children Under 18 at Home 3.2 2.9 53% 43% Gender Age Household Income Ethnicity 55% 42% 15% 56% 18-34 < $30K Caucasian/Other Male 17% 66% 35% 50% 22% $30K - $60K 42% 21% 11% 45% 35-54 African American Fema
Slide 19: Supply Chain Efficiency Leads to Attractive Margins and Robust Free Cash Flow
4 SUPPLY CHAIN Efficiency Leads to Attractive Margins and Robust Free Cash Flow Generation W E H AV E E N O U G H D I S T R I B U T I O N C A PA C I T Y T O H A N D L E Multiple Levers to Sustain Margin Profile THE MAJORITY OF OUR NEW STORE GROW TH PLANS PRODUCT MIX • Expand penetration of higher-ma
Slide 20: BEST TEAM: Experienced Retail Leadership
5 BEST TEAM: Experienced Retail Leadership Steve Lawrence Sam Johnson Carl Ford Matt McCabe CEO President EVP, CFO EVP, CMO Served as CEO and member of the Served as President since October Served as EVP and CFO since July Served as EVP and CMO since June 2023 Board of Directors since June 2
Slide 21: Culture is Central to our Leading Retail Team
5 Culture is Central to our Leading Retail Team Our Values Establish a Strong Purpose Statement Foundation for Our Culture + At Academy Sports + Outdoors, we believe that practicing Represent the Key Expectations corporate responsibility: • Strengthens our accountability and performance We Have of O
Slide 22: Path Forward: Strategy & Goals
Path Forward: Strategy & Goals O U R S T R AT E G Y OUR LONG-RANGE GOALS* 1. Open NEW STORES to expand the store base by NET SALES $10B+ 50%+ in existing and new markets NET INCOME MARGIN 10% 2. Build a more powerful OMNI-CHANNEL business ADJ. EBIT MARGIN** 13.5% 3. Drive our EXISTING BUSINESS ROIC*
Slide 23: Financials
Financials 23
Slide 24: Strong Cash Flow Generation
Strong Cash Flow Generation CASH FLOW FROM CASH FLOW FROM ADJUSTED FREE CASH O P E R AT I O N S INVESTMENTS* FLOW** +15% +11% CAGR CAGR $1,012 $978 $673 $597 $552 $536 $443 $330 $264 $197 ($ Millions) ($ Millions) ($ Millions) ($67) ($33) ($76) ($109) ($206) 2019 2020 2021 2022 2023 2019 2020 2021 2
Slide 25: Sales/Margin Trends, Strong Foundation
Sales/Margin Trends, Strong Foundation Net Sales Gross Profit Adjusted EBIT* & Comparable Sales & Margin Rate & Margin Rate +5% +8% +29% CAGR CAGR CAGR $8.0 $3.0 $1,000 70.0% 90.0% 75.0% $900 $969 60.0% $888 $7.0 $2.5 $6.8 $800 $6.0 $6.4 $2.4 65.0% $6.2 50.0% 70.0% $700 $2.2 $735 $5.7 $2.0 $2.1 $600
Slide 26: Enhanced, Sustainable Profits
Enhanced, Sustainable Profits ADJUSTED NET INCOME* ADJUSTED PRO FORMA EARNINGS PER SHARE* +48% +47% CAGR CAGR $717 $7.60 $7.70 $646 $6.96 $539 $3.83 $312 $76 $1.02 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 $ Millions Source: Fiscal 2023 Annual Report on form 10-K. *Adjusted net income and ad
Slide 27: Strong ROIC
Strong ROIC R E T U R N O N I N V E S T E D C A P I TA L ( R O I C ) * 42% 34% 28% 26% 14% 2019 2020 2021 2022 2023 Source: Fiscal 2023 Annual Report on Form 10-k. *ROIC is a non-GAAP measure. See appendix for reconciliations of Non-GAAP measures. 27
Slide 28: Strong Balance Sheet is a Competitive Advantage That Supports Growth
Strong Balance Sheet is a Competitive Advantage That Supports Growth Net Debt* $1,314 Net Leverage Net Debt* 4.1x $140 Debt Principal Cash Net Leverage $1,463 0.17x $786 $687 $486 $587 $488 $378 $ In Millions $337 $348 $149 2019 2020 2021 2022 2023 The Company maintains a $1 Billion credit facility,
Slide 29: Expect to Deliver Strong Profits & Cash
Expect to Deliver Strong Profits & Cash LRP ADJUSTED EBIT GOAL L R P C A S H F L O W F R O M O P E R AT I O N S GOAL +13% +11% CAGR CAGR 2023-28 2023-28 $1,330 $915 $735 $536 $264 $206 $ in millions $ in millions 2019 2023 2028E 2019 2023 2028E *Goals are aspirational or otherwise forward-looking st
Slide 30: Capital Expenditures Plan: All Self-Funded
Capital Expenditures Plan: All Self-Funded EXPECT TO SPEND ~$1.5 BILLION OVER THE NEXT FIVE YEARS* $225- $250- $275- $275- $275- TOTAL $208M $275M $300M $325M $325M $325M $300 $200 $100 $0 FY23 FY24E FY25E FY26E FY27E FY28E CapEx Includes: New Stores and Store Remodels, Distribution Center, Strategi
Slide 31: Appendix
Appendix
Slide 32: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Common Share, Adjusted Free Cash Flow, Net Debt, Net Leverage, and ROIC have been presented in this presentation as supplemental measures of financial performance that are not required by, or
Slide 33: Adjusted EBITDA and Adjusted EBIT
Adjusted EBITDA and Adjusted EBIT We define “Adjusted EBITDA” as net income (loss) before interest expense, net, income tax expense, depreciation, amortization, and impairment, and other adjustments included in the table below. We define “Adjusted EBIT” as Adjusted EBITDA less depreciation and amort
Slide 34: Adjusted Net Income and Adjusted Earnings per Common Share
Adjusted Net Income, Pro Forma Adjusted Net Income, Adjusted Earnings per Common Share and Adjusted Pro Forma Earnings Per Common Share We define “Adjusted Net Income (Loss)” as net income (loss), plus other adjustments included in the table below. We define “Adjusted Earnings per Common Share, Basi
Slide 35: Adjusted Net Income and Adjusted Earnings per Common Share cont'd
Adjusted Net Income, Pro Forma Adjusted Net Income, Adjusted Earnings per Common Share and Adjusted Pro Forma Earnings Per Common Share cont'd (a) Net income for the year ended Feb. 3, 2024, includes a $15.9 million net gain for a credit card fee litigation settlement in Q4 2023. Net income for fisc
Slide 36: Adjusted Free Cash Flow
Adjusted Free Cash Flow We define “Adjusted Free Cash Flow” as net cash provided by (used in) operating activities less net cash provided by (used in) investing activities. We describe these adjustments reconciling net cash provided by operating activities to Adjusted Free Cash Flow in the following
Slide 37: Net Debt
Net Debt We define “Net Debt” as long-term debt, net plus current maturities of long-term debt, less cash and cash equivalents. We describe these adjustments reconciling long-term debt, net to net debt in the following table.as net cash provided by (used in) operating activities less net cash provid
Slide 38: Return On Invested Capital
Return On Invested Capital Return on Invested Capital (ROIC) is calculated as follows: (i) the numerator is defined as Adjusted EBITDA plus rent minus estimated taxes; and (ii) the denominator is defined as: (a) the sum of the 13-month average balances for: net receivables, inventory, prepaid expens
Slide 39: Market Definitions
Market Definitions Circana/ Retail Tracking Service Category details Apparel Apparel excludes bodysuits/leotards, bras (non-sport), camisoles, dress pants, dress shirts, dresses, full/half slip, jackets/blazers, knee highs, leggings, one-piece performance suits, pajama sets, pantyhose, shapewear, sp
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