KATY, Texas - Academy Sports + Outdoors (NASDAQ: ASO) has entered into an exclusive partnership with DoorDash (NASDAQ: NASDAQ:DASH), aiming to provide customers with on-demand delivery services. This collaboration is set to enhance the shopping experience during the busy Back-to-School season, allowing consumers to order products from Academy's 285 stores across 19 states through the DoorDash platform.
The service promises to deliver items such as apparel, footwear, sporting goods, and outdoor recreation equipment on the same day, typically within an hour. Chad Fox, Executive Vice President and Chief Customer Officer at Academy, expressed the company's intent to facilitate customers' access to sports and outdoor gear swiftly, aligning with their mission to provide "Fun for All."
DoorDash's membership program, DashPass, will include Academy's offerings, enabling members to enjoy benefits such as a $0 delivery fee and reduced service fee on eligible orders. While the average delivery time is under an hour, it may vary and is not guaranteed. Fees such as service charges, taxes, and gratuity will still apply to DashPass orders.
Academy Sports + Outdoors, founded in 1938, has evolved from a family business to a widely recognized retailer in the sporting goods and outdoor recreation sector. The company's product range includes national brands as well as private label offerings, catering to a diverse consumer base with a localized merchandising strategy.
DoorDash, on the other hand, is a local commerce platform established in 2013, connecting consumers with a variety of local businesses. The technology company has been expanding its services to support merchants and provide consumers with greater access to their community offerings.
This partnership is based on a press release statement and aims to meet the increasing consumer demand for convenience and speed in the delivery of retail products.
In other recent news, Academy Sports & Outdoors reported a slight increase in sales for its fourth quarter, reaching $1.8 billion, despite a 3.6% decrease in comparable store sales. The company anticipates net sales between $6.07 billion and $6.35 billion for fiscal 2024, with comparable sales growth ranging from negative 4% to positive 1%. Analyst firm Truist Securities adjusted its outlook on Academy Sports, reducing the price target to $73.00 from the previous $75.00, while maintaining a Buy rating. Truist's analysis indicated slower than expected growth in the second quarter due to challenging economic conditions and subdued demand.
Meanwhile, Jefferies initiated coverage on Academy Sports, issuing a Buy rating and setting a price target of $85.00, citing the company's current trading levels as indicative of 'undervalued growth.' B.Riley increased the share price target from $65.00 to $72.00, maintaining a Buy rating, due to improved trends in the Outdoor segment. Conversely, TD Cowen reduced its share price target to $82 from $86, but maintained an Outperform rating, expressing optimism about the company's same-store sales growth and earnings before interest and taxes margin trends.
InvestingPro Insights
As Academy Sports + Outdoors (NASDAQ: ASO) embarks on its new venture with DoorDash to streamline the delivery of sporting goods and outdoor equipment, the company's financial health remains a critical factor for investors. According to InvestingPro data, Academy Sports + Outdoors has a market capitalization of approximately $4.06 billion and is currently trading at an attractive earnings multiple with a P/E ratio of 7.98. This valuation suggests that the company's stock may be undervalued relative to its earnings potential, which is further corroborated by an adjusted P/E ratio over the last twelve months as of Q4 2024 standing at 8.01.
Despite a slight revenue decline of 3.69% over the last twelve months as of Q4 2024, the company has maintained a solid gross profit margin of 34.26%. Additionally, the robust operating income margin of 11.01% indicates efficient management and the ability to convert revenue into profit. The InvestingPro Tips highlight that ASO's liquid assets exceed its short-term obligations, which is a reassuring sign of the company's liquidity and its ability to meet immediate financial commitments. Moreover, analysts remain optimistic about ASO's profitability for the year, which could be a positive signal for potential investors.
It's worth noting that Academy Sports + Outdoors has experienced a significant price drop over the last three months, with a 21.46% decline in total return. However, the company's long-term performance has been strong, with a high return over the last decade and a solid return over the last five years. For investors looking to capitalize on current market conditions and the potential upside of ASO's stock, there are additional InvestingPro Tips available. By visiting https://www.investing.com/pro/ASO, investors can discover more in-depth analysis and leverage these insights to make informed decisions.
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