Academy Sports and Outdoors Inc. announced that it has publicly filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to a proposed initial public offering.
The filing shows that in the year ended February 1, sales grew 1.0 percent to $4.83 billion. Earnings reached $120.0 million from $21.4 million.
In the half ended August 1, net sales increased 18.5 percent to $2.74 billion due to the increasing appeal of sporting goods products amid the pandemic. The 15.9 percent increase in comparable sales resulted from a 47.3 percent increase in the outdoors merchandise division and a 22.6 percent increase in the sports and recreation merchandise divisions, partially offset by declines of 6.5 percent and 3.3 percent in the footwear and apparel divisions, respectively.
Academy Sports said in its filing, “The effects of the COVID-19 pandemic during this period have caused significant increases in popularity of isolated recreation, outdoor and leisure activities that we believe have driven the increases in our outdoors and sports and recreation merchandise divisions. Likewise, we believe that the decreases in our apparel and footwear merchandise divisions were predominately driven by a temporary but significant shift in customer behavior at the substantial beginning of the COVID-19 pandemic, which saw customers focus on purchasing primarily isolated recreation, outdoor and leisure activity products in addition to “essential items.”’
Academy noted in the filing that although comparable sales have been negative for the past three fiscal years, it has seen four consecutive quarters of positive comparable sales as of second quarter 2020. In addition, second quarter 2020 reflected its fourth consecutive quarter of adjusted EBITDA growth and its fifth consecutive quarter of Adjusted Free Cash Flow growth.
The number of shares of common stock to be offered and the price range for the proposed offering have not yet been determined. Academy has applied to list its common stock on the NASDAQ Global Select Market under the ticker symbol “ASO.”
Credit Suisse, J.P. Morgan, KKR Capital Markets and BofA Securities will act as joint book-running managers for the proposed offering. Evercore ISI, Guggenheim Securities, UBS Investment Bank and Wells Fargo Securities are acting as bookrunners. Stephens Inc., Capital One Securities, Loop Capital Markets, CastleOak Securities, L.P., Blaylock Van, LLC, Cabrera Capital Markets LLC, Ramirez & Co., Inc. and R, Seelaus & Co., LLC are acting as co-managers.
On August 18, Bloomberg reported that Academy Sports + Outdoors, acquired by Kohlberg Kravis Roberts & Co (KKR) in 2011, had confidentially filed paperwork for an initial public offering.
Sources told Bloomberg the offering would debut this year with Credit Suisse and KKR Capital Markets the lead underwriters.
Under KKR’s ownership, Academy’s store footprint has nearly doubled to more than 250 stores in 16 states across the South and Midwest of the U.S., up from 133 stores.
On June 30, Moody’s Investors Service upgraded Academy, Ltd.’s debt ratings, including corporate family rating (CFR), to B3 from Caa2, as Academy’s Q120 comparable sales, earnings and cash flow performance exceeded the rating agency’s expectations. The upgrade also reflected Moody’s view that the solid operating performance trends are likely to continue over the near term which will significantly reduce risks associated with the company’s ability to refinance its $1.4 billion term loan due July 2022 in a timely and economical manner.
Photo courtesy Academy Sports and Outdoors