In a recent update during a financial meeting on Thursday, Steve Lawrence, the head of Academy Sports + Outdoors, shared new plans for the company's growth. Lawrence explained to financial experts that they are adjusting slightly to their earlier predictions on how many new stores they will open.
Academy Sports + Outdoors plans to launch between 160 and 180 stores in the next five years, aiming to open 15 to 17 stores in 2024 alone. This marks an increase from their initial forecast last April, which estimated opening 120 to 140 stores within the same timeframe.
The company has announced a strategic plan for its new store openings, aiming for an even split between its established markets and new regions. The company is shifting its focus toward smaller and mid-sized areas, recognizing these locations offer a lower sales volume but present a greater chance for profitability.
Academy's ambitious goal is to significantly expand its current network of 282 stores across 18 states to more than 800 stores nationwide. This expansion strategy underscores the company's confidence in its business model and its vision for becoming a dominant player across the country.
Academy Sports Outpaces Previous Growth
Lawrence recently highlighted the company's progress, noting the opening of 14 new stores last year. This achievement surpasses the nine stores launched in 2022 by five.
He emphasized that the insights gained from last year's openings are being utilized to enhance the performance of these new outlets. Consequently, these stores are expected to generate higher sales in their first year compared to those opened in 2022.
Furthermore, Academy has adjusted its sales expectations for stores in newer markets where the brand is less recognized. The company anticipates that first-year sales for these new stores will range from $12 million to $16 million, achieving full growth potential within five years.
This is a revision from the initial expectation of $18 million in first-year sales, reflecting a more nuanced approach to expanding into new areas.
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Academy Sports Refines Expansion Strategy
Lawrence outlined a refined strategy for opening new stores after analyzing the performance of 23 stores launched in 2022 and 2023.
The company aims to balance existing and new markets for future store locations. Starting in 2025, it plans to schedule about half of its latest openings in the first half of the year, leveraging the better performance of stores opened during this period.
Academy Sports has seen success in smaller and mid-sized markets, where cost-effective operations offset lower sales volumes, enhancing profitability. The company intends to open more stores simultaneously in new markets to strengthen its brand presence.
Despite a 3.7% decline in annual net sales to $6.16 billion, the fourth quarter showed a 2.8% increase to $1.79 billion, with net income rising 6.7% year-over-year. Academy anticipates net sales for fiscal 2024 to be between $6.07 billion and $6.35 billion, with earnings per share expected to range from $5.90 to $6.90.
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