Academy Sports Files For IPO As Sporting Goods Chains Thrive During Pandemic
Academy Sports and Outdoors, a Katy, Texas-based discount sporting goods chain with about 260 stores, mainly in the southern states, has filed preliminary paperwork with the Securities and Exchange Commission for an initial public offering.
The number of shares it plans to offer and at what price still hasn't been determined, though in the filing the company did offer a maximum aggregate offering price of $100M (which could change). The company plans to trade on the Nasdaq Global Select Market using the symbol ASO.
The company has been privately owned since its founding as a family-owned retailer in Texas in the late 1930s. In 2011, investor Kravis Roberts & Co. acquired the chain, which by that time included about 130 stores. Besides sporting goods, Academy also sells sports apparel and footwear.
The company's retail locations range from about 40K SF to 130K SF, with an average size of roughly 70K SF, the SEC filing notes, and there are no Academy stores in malls. The company didn't commit in the filing to a number of new stores in plans to open post-IPO, but did say it knows of about 675 locations that could accommodate its preferred size (70K SF) in markets where it would consider locating.
"We believe [Academy] could be valued around $2.5B or above, which is a similar multiple to publicly traded rival Dick's Sporting Goods," Oita Chuo Pacific Management Head of Corporate Equities Michael Knight said in a statement.
Academy enjoyed about $5.3B in sales during the 12 months ended Aug. 1, with $204M in net income. The company's comparable-store sales have been negative in recent years, but the company experienced four consecutive quarters of comp-store sales growth as of Q2 2020, 24/7 Wall Street reports.
The coronavirus pandemic seems to be a factor in Academy's uptick in comp-store sales. Americans are buying more sporting goods now than before.
Sales at sporting goods stores, hobby, musical instrument and book stores jumped 11.1% in August compared with the same month a year ago, according to the Census Bureau, which reports sales among those kinds of stores together.
Since those kinds of goods are usable while practicing social distancing, the sporting goods sector has been one of the few retail categories to see double-digit sales growth year-over-year. Building material and garden supplies were likewise up for the year in August (by 15.4%), as were nonstore (internet) sales (22.4%).
Rival sporting goods purveyor Dick's, which has 730 Dick's locations and almost 100 Golf Galaxy stores nationwide, has also been doing a land-office business, now that all of its stores have reopened. Sales were up 20.1% in Q2 2020 compared with a year ago, to about $2.7B. Comp-store sales at the chain were up 20.7% year-over-year during the second quarter.
"During this pandemic, the importance of health and fitness has accelerated," Dick's CEO Edward Stack said during the company's most recent earnings call in early August.
"Participation in socially distant outdoor activities has increased and there has been a greater shift toward athletic apparel and active lifestyle products, with people spending more time working and exercising at home," Stack said. "The majority of our assortment sit squarely at the center of these trends."