Academy Sports + Outdoors Uses Local Strategy to Power Store Expansion – Footwear News #Academy #Sports #Outdoors #Local #Strategy #Power #Store #Expansion #Footwear #News Welcome to Viasildes, here is the new story we have for you today:
To roll out an ambitious store expansion plan, Academy Sports and Outdoors is hoping to connect to local consumers.
The sporting goods and outdoor retailer, which currently operates more than 260 stores across the U.S., plans to open 80 to 100 new stores over the next five years, including nine new stores this fiscal year. To achieve this expansion, the retailer is prioritizing “localized assortments” of products designed for consumers in a specific region or market.
“It’s going in ahead of time, understanding the market and demographics and doing a ton of research around that,” explained Academy chief merchandising officer Steve Lawrence in an interview with FN following the company’s Q2 earnings announcement on Wednesday. “[We want to] outsize the things that we think are gonna be important in that market and pull back on the things that aren’t going to be as important.”
This strategy marks a shift from the Academy of a few years prior. Between 2012 and 2019, store openings were not performing as well as hoped, Lawrence said. During that time, the company had one blueprint it used to open stores in its core market, such as in Texas, Oklahoma or Louisiana, which it applied it to other markets.
“It just wasn’t resonating,” Lawrence said of this one-size-fits-all strategy. That’s when the company decided that a tailored approach was necessary to succeed in new markets, especially given that in-store sales make up the vast majority of revenues for the company.
Various elements determine how each store specializes its assortment. For example, there might be a larger selection of cold weather clothes for stores located in Northern states and warm weather items for those in the south. Stores can also tap into the lifestyle and sporting interests of the consumers in a specific region. In Florida, for example, Academy expanded its selection of fishing products at its Panama City location to cater to a large population of people who like fishing in the market. In Texas, Academy is in tune with the state’s focus on football. In the Carolinas, more attention is devoted to lacrosse and racket sports.
When it comes to determining the best way to specialize a store in a new market, Lawrence said the team takes a mostly hands-on approach.
“A lot of it is just boots on the ground, going in and researching the market, and having people spend some time there understanding what’s important to that locale,” Lawrence said, adding that marketing is also tailored to reflect different goals in each market, from introducing a brand identity in a new market or focusing on location details for a new store in an existing market.
When it comes to opening new stores, Academy is pursuing three distinct opportunities. The first involves expanding stores in existing successful markets, such as in Atlanta, Georgia, which saw two new store openings in the last four months, bringing the total to 12 stores there. The next step is expanding into adjacent markets, such as in Panama City, Florida (which just opened a store), and Lexington, Kentucky, which will see an opening in the fall. The last step is venturing into entirely new markets. For Academy, this was the strategy guiding its new store in Richmond, Virginia that opened in August and its plan to expand to West Virginia later in 2022.
CEO Ken Hicks said in a call with investors that the new stores that opened in 2022 have already exceeded initial sales expectations.
In Q2, Academy reported that net income decreased 0.9% to $188.8 million. Diluted earnings per share increased 11.6% to $2.22. Adjusted net income was $195 million and adjusted diluted earnings per share were $2.30. Net sales were down 5.8% to $1.69 billion.
The company reaffirmed its sales guidance and updated its EPS forecast for 2022 and expects adjusted diluted earnings per share to fall between $6.75 and $7.50.