KATY, Texas, Dec. 10, 2020 /PRNewswire/ —Â Academy Sports and Outdoors, Inc. (NASDAQ: ASO) today reported financial results for the third quarter ended October 31, 2020.
Third Quarter Summary for the Period Ending October 31, 2020
Net sales for the third quarter 2020 were $1.35 billion, a 17.8% increase over $1.15 billion in the third quarter 2019. Comparable sales for the third quarter 2020 increased 16.5% over the third quarter 2019.
Academy reported net income for the third quarter 2020 of $59.6 million, or $0.74 per diluted share, a 109% net income increase over $28.6 million, or $0.38 per diluted share, in the third quarter 2019. Pro Forma Adjusted Net Income, which excludes the impact of certain non-cash and extraordinary items, was $73.7 million or $0.91 per diluted share, a 188% increase in Pro Forma Adjusted Net Income over $25.6 million or $0.34per diluted share, in the third quarter 2019.
The Company’s gross margin rate for the third quarter 2020 was 32.7% of net sales, a 110 basis point increase over 31.6% in the third quarter of 2019, while the selling, general, and administrative (“SG&A”) expense rate was 26.6% of net sales on $359.0 million of SG&A expenses, a 40 basis point improvement over 27.0% on $309.2 million of SG&A expenses in the third quarter 2019. Â Excluding nonrecurring expenses associated with the Company’s October initial public offering (“IPO”), consisting of $19.9 million in additional stock compensation expense and $12.3 million for the settlement of the Company’s private equity sponsor’s monitoring agreement, SG&A expenses for third quarter 2020 would have been $326.8 million or 24.2% of net sales, a 280 basis point improvement over the third quarter 2019.
The Company reported eCommerce sales growth of 95.9% over the third quarter 2019 and that stores facilitated over 95% of the Company’s total sales, including ship-from-store, buy-online-pick-up-in-store, and in-store retail sales.
Ken Hicks, Chairman, President and Chief Executive Officer, said, “I am proud to report record-breaking quarterly sales and net income and our fifth consecutive quarter with a comparable sales increase. This was a significant accomplishment that our entire team delivered in a challenging quarter filled with many important achievements.  We continue to work on our key strategic initiatives, including power merchandising, omnichannel, and customer focus, which we believe will position us well for the future.”
Year-to-date 2020 Summary
Net sales for the 39 weeks ended October 31, 2020 (“year-to-date 2020”) was $4.1 billion, an 18.3% increase over the 39 weeks ended November 2, 2019 (“year-to-date 2019”). Comparable sales for the year-to-date 2020 increased 16.1% over the year-to-date 2019.
The Company reported net income for the year-to-date 2020 of $217.2 million, a 112.3% increase over the year-to-date 2019. This resulted in earnings per diluted share of $2.82 compared to $1.37 per diluted share for the year-to-date 2019.  Pro Forma Adjusted Net Income for the year-to-date 2020 was $208.6 million, a 257.6% improvement over the year-to-date 2019. This resulted in Pro Forma Adjusted Earnings per diluted share of $2.70 compared to $0.78 per diluted share for the year-to-date 2019.
The Company reported net cash provided by operating activities of $857.2 million for the year-to-date 2020, a $762.4 million increase over $94.8 million for the year-to-date 2019. Â Adjusted Free Cash Flow for the year-to-date 2020 was $843.4 million compared to $42.2 million for the year-to-date 2019.
Michael Mullican, Executive Vice President and Chief Financial Officer, said, “We are proud of our extraordinary team members for delivering strong year-to-date sales and earnings results. Â Based on our comparable sales growth before and during the ongoing pandemic, we believe our diversified product categories and resilient business model resonate well with our growing customer base. Â Despite challenges during the year to maintain in-stock levels in certain very productive categories, we believe that our inventory is now at an acceptable level in most categories and that we are in a good position to support our current and planned sales velocity and continue to improve even more in the near future.”
Capital Structure
The Company’s cash and cash equivalents totaled $869.7 million with no borrowings under its $1 billion ABL credit facility as of the end of the third quarter 2020. Subsequent to the third quarter, on November 6, 2020, the Company issued $400 million of senior secured notes and entered into a new $400 million term loan facility, both of which mature in 2027. The net proceeds from the notes and the new term loan, as well as cash on hand, were utilized to repay in full outstanding borrowings under the Company’s existing term loan facility in the amount of $1.4 billion, reducing the Company’s debt by $631 million.  In addition, on November 6, 2020, the Company extended its $1 billion ABL facility through 2025.
About Academy
Academy is a leading full-line sporting goods and outdoor recreation retailer in the United States. Â Originally founded in 1938 as a family business in Texas, Academy has grown to 259 stores across 16 contiguous states. Â Academy’s mission is to provide “Fun for All” and Academy fulfills this mission with a localized merchandising strategy and value proposition that strongly connects with a broad range of consumers. Â Academy’s product assortment focuses on key categories of outdoor, apparel, footwear and sports & recreation through both leading national brands and a portfolio of 17 private label brands, which go well beyond traditional sporting goods and apparel offerings.
