WEBVTT - Academy Sports CEO on Success 'Selling Fun'

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<v Speaker 1>You're listening to Bloomberg Business Week with Carol Messer and

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<v Speaker 1>Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So Academy

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<v Speaker 1>Sports and Outdoors reported earnings earlier this week. It's stock

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<v Speaker 1>rally more than on the news that was on Tuesday,

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<v Speaker 1>the results causing five analysts to raise their price targets

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<v Speaker 1>on the stock by an average of eleven percent. Stock

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<v Speaker 1>is up nearly fifty percent over the past year, compared

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<v Speaker 1>with the S and P five, which is up around

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<v Speaker 1>and the stock in what was a down day to day,

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<v Speaker 1>actually eking out a six tenth of one percent gain

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<v Speaker 1>for the Thursday session. Ken Hicks as Chairman, president and

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<v Speaker 1>CEO of Academy Sports and Outdoors, joining us on the

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<v Speaker 1>phone from Texas. Ken, how are you terrific? How are

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<v Speaker 1>y'all doing today? We're doing really well. Um, what's working

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<v Speaker 1>so well for you guys? You know, we're just fortunate.

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<v Speaker 1>And the fact that we sell fun and people want

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<v Speaker 1>to have more fun, well, that's true, true, but they

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<v Speaker 1>don't necessarily want to do it. I mean, I think

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<v Speaker 1>it's I think it's so interesting because you know, during

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<v Speaker 1>the pandemic, so many people started spending time outside in

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<v Speaker 1>a different way than they had done perhaps ever, and

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<v Speaker 1>we saw this rise in e commerce, and you're sort

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<v Speaker 1>of taking a different approach, doubling down on physical retail

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<v Speaker 1>stores and saying that you're going to open eighty to

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<v Speaker 1>stores over the next five years. Why are you so

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<v Speaker 1>bullish on physical retail space. Well, first of all, a

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<v Speaker 1>lot of the things that we sell people want to

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<v Speaker 1>touch and feel, like a baseball bat or a fishing rod. Second,

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<v Speaker 1>a lot of it's very difficult to ship, really touch

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<v Speaker 1>to ship a kayak or a treadmill um And the

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<v Speaker 1>third thing, quite frankly, we're only in sixteen states right

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<v Speaker 1>now with two d and fifty nine stores, and we've

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<v Speaker 1>got a great model. Our average store does over twenty

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<v Speaker 1>five million dollars, and we've got, you know, a lot

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<v Speaker 1>of the rest of the country to to grow into

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<v Speaker 1>and to fill out some of our existing markets. And

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<v Speaker 1>at the same time, you know, we're growing our dot

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<v Speaker 1>com business and truly omni channel. And we had a

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<v Speaker 1>very good fourth quarter up over with our dot com

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<v Speaker 1>where many other retailers were down on dot com. How

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<v Speaker 1>many dot com purchases were there for Canoes? I just

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<v Speaker 1>want to know a lot really, but yeah, well it's

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<v Speaker 1>it's you know, the thing is a lot of people

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<v Speaker 1>took up new hobbies during the pandemic and they're sticking

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<v Speaker 1>with them. Would be that fishing or hiking, camping, different sports, exercise,

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<v Speaker 1>and and we're seeing the benefit of that as people

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<v Speaker 1>stick to their you know, the thing that they started.

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<v Speaker 1>Plus we're you know, the trend for for wellness and

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<v Speaker 1>health has been going on for some time and that's

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<v Speaker 1>where we are. We sell to you know, families, you know,

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<v Speaker 1>the moderate upper moderate customer, and we have we have

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<v Speaker 1>a lot to offer in our stores from as they say,

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<v Speaker 1>sport camping or just you know, backyard grills and patio spits.

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<v Speaker 1>You gotta be happy to that. The S and P

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<v Speaker 1>small caps Exandred said we're gonna put you in the index, right.

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<v Speaker 1>You guys got some juice off of that one too. Yeah,

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<v Speaker 1>we we did get get a little juice as we

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<v Speaker 1>went into some of the funds. But I think those

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<v Speaker 1>funds are now very happy they put us in After

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<v Speaker 1>the last last week. Hey, Ken, how's your supply chain?

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<v Speaker 1>You know we've been I don't I don't mean to

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<v Speaker 1>sound like absolutely obsessed with the supply chains. We're asking everyone,

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<v Speaker 1>how are you making sure that your shelves are full?

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<v Speaker 1>It is to challenge and there are some categories that

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<v Speaker 1>are just, you know, really really difficult. One of them

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<v Speaker 1>this year is cleats. They're just no cleats anywhere for

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<v Speaker 1>kids who want to play baseball. But overall, we were

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<v Speaker 1>in a much better inventory position, and we've taken a

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<v Speaker 1>number of actions. One is we're alreadering on our merchandise

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<v Speaker 1>early and working with vendors who we know that can supply.

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<v Speaker 1>Another is we're using some of the UH secondary ports

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<v Speaker 1>were located in Texas and we use Galveston, we used Charleston,

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<v Speaker 1>and so we're able to get the goods in more.

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<v Speaker 1>And we're working with our shipping partners and trucking partners

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<v Speaker 1>with long term contracts to make sure that they have

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<v Speaker 1>the capacity to give us to get the goods to

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<v Speaker 1>the stores. Did you say nobody has kids cleats? Uh?

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<v Speaker 1>If if you don't have them by now, it's going

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<v Speaker 1>to be very difficult to get baseball cleats this year.

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<v Speaker 1>What are you rethinking, if at all, about can your

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<v Speaker 1>global supply chain in terms of where it exists, well,

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<v Speaker 1>are are one of the things our supply chain in particular,

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<v Speaker 1>we're fortunate in that we don't we're not as dependent

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<v Speaker 1>on some of the very busy West coast um ports.

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<v Speaker 1>But also we've got three distribution centers that are along

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<v Speaker 1>the southern part of the country, and we're looking to

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<v Speaker 1>grow um more north and further east and then ultimately west,

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<v Speaker 1>and we're going to have to build some new distribution

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<v Speaker 1>centers at some point to be able to service those

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<v Speaker 1>new stores. Right now, we have enough capacity, but with

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<v Speaker 1>our with our growth plans, we're gonna need to continue

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<v Speaker 1>to step up our supply chain capabilities. So if I

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<v Speaker 1>look at your website, we've just got about forty or

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<v Speaker 1>fifty seconds. You know, there's lots of categories. There's backyard,

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<v Speaker 1>this recreation, there's how fitness, men's, women's Kids. Which is

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<v Speaker 1>your busiest vertical Where you're seeing the most growth, uh,

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<v Speaker 1>team sports, footwear and apparel right now? And where are

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<v Speaker 1>you not seeing growth the in in some of the

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<v Speaker 1>fitness categories. Um, you know those those are a little

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<v Speaker 1>bit more challenged. But we expect some of the categories

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<v Speaker 1>as the weather gets warmer, like fifteen and our backyard

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<v Speaker 1>and pools, that should start to take off again. Well,

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<v Speaker 1>I just love that people are are online ordering canoes.

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<v Speaker 1>I bought a huge tub online years ago. You could,

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<v Speaker 1>you can? You can like a tub? Yeah, like you

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<v Speaker 1>can ship anything. UM can. Always love talking with you

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<v Speaker 1>get some great insight and what consumers are up to.

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<v Speaker 1>Ken Hicks is Chairman Presidency of Academy Sports and Outdoors.

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<v Speaker 1>As I mentioned, their stock over the past year has

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<v Speaker 1>been way out performing the S and P five hundred,

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<v Speaker 1>up about fifty percent in that timeframe. SMP just up around.

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<v Speaker 1>Good luck if you're looking for cleats. I know it's

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<v Speaker 1>too late, folks, find another sport. Mrs Bloomberg