WEBVTT - Academy CEO Says Supply Chain Needs Updating

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<v Speaker 1>This is Bloomberg Business Week with Carol Masser and Bloomberg

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<v Speaker 1>Quick Takes Tim Stinovic on Bloomberg Radio. You're listening to

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<v Speaker 1>Bloomberg Business Week Carol Masser in our interactive broker studio.

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<v Speaker 1>Shares of Academy Sports and Outdoors they rose about five percent.

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<v Speaker 1>This is after the company reported earnings, raising its financial

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<v Speaker 1>forecast for its fiscal year, including comp sales net income,

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<v Speaker 1>despite some ongoing issues tied to COVID nineteen. Remember we

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<v Speaker 1>talked with the head of the company back in October

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<v Speaker 1>right after it went public. Let's bring back Ken Hicks.

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<v Speaker 1>He is chairman Presidency of Academy Sports and Outdoors. He's

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<v Speaker 1>with us once again from Katie Texas. Ken, how are

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<v Speaker 1>you doing terrific care? How are you today? Doing well?

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<v Speaker 1>Doing well, working our way through as the world reopens

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<v Speaker 1>and it feels good. Um, tell us about you. We

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<v Speaker 1>talked with you just after the I p O. Your

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<v Speaker 1>stock has been on a tear this year. It's up

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<v Speaker 1>more than eighty five percent. Tell us about how it's

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<v Speaker 1>been since the I p O and and what business

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<v Speaker 1>looks like in the consumer trends that you're seeing. Yeah,

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<v Speaker 1>we're we're actually seen some very strong business uh you know,

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<v Speaker 1>reported sales up almost thirty nine percent and and very

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<v Speaker 1>strong profits. And we've up to our estimate for the

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<v Speaker 1>year to between UH six and nine UH. And what

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<v Speaker 1>we're seeing is the customer who found the new hobby,

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<v Speaker 1>found fishing or camping, were riding bikes, built their home gym,

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<v Speaker 1>is coming back and buying more. And so people who

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<v Speaker 1>got into the outdoors uh or into a sport are

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<v Speaker 1>really continuing with that. Well, that's interesting. And your supply chain,

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<v Speaker 1>you guys have had no problem meeting everything that you

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<v Speaker 1>needed to, well know, the supply chain. The supply chain

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<v Speaker 1>is a challenge, but you know, we never closed during

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<v Speaker 1>COVID and we were able to stay open and that

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<v Speaker 1>allowed us to be able to order goods and see

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<v Speaker 1>what was happening. And so I'd say we're little bit

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<v Speaker 1>ahead of some of the others and and our team

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<v Speaker 1>is just doing a terrific job getting the merchandise through.

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<v Speaker 1>But it is not easy. So we still don't have

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<v Speaker 1>some inventory issues in some areas, but overall it's at

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<v Speaker 1>an acceptable level. Is it getting easier? Are you seeing

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<v Speaker 1>things you know kind of like loosen up, like light

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<v Speaker 1>up in terms of the supply chain getting more you

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<v Speaker 1>know normal, if I can, I think we're going to

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<v Speaker 1>see this through the remainder of the year. How does

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<v Speaker 1>that make you change? You're thinking about how you want

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<v Speaker 1>your supply chain to work going forward. Well, we actually

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<v Speaker 1>have a major study underway right now. We're going to

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<v Speaker 1>take some significant actions to improve our supply chain going

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<v Speaker 1>forward to really make it more flexible and more up

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<v Speaker 1>to date. We you know, it works okay, but we're

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<v Speaker 1>gonna need as we grow, a much stronger supply chain.

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<v Speaker 1>Does that mean, though, Ken, Does that mean more stuff

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<v Speaker 1>in your backyard to where you're selling? What does it mean?

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<v Speaker 1>Because I'm assuming most of your your sales are helped

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<v Speaker 1>me out here, remind me, is it mostly North America? US?

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<v Speaker 1>All of our sales are US. We're in the south

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<v Speaker 1>central part of the United States. And you know the thing,

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<v Speaker 1>better systems, better processes. Uh. You know, we've got the

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<v Speaker 1>infrastructure in terms of buildings, but what we need now

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<v Speaker 1>our better processes and systems to be able to track

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<v Speaker 1>and flow the goods through the system faster and more accurately,

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<v Speaker 1>and keep a better eye on it. So it's not

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<v Speaker 1>necessarily manufacturing bringing manufacturing back home to the U S.

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<v Speaker 1>You just need systems that can track it. I think

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<v Speaker 1>I've always the Apple model where I could buy a

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<v Speaker 1>phone and I could tell where it was at every

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<v Speaker 1>step of the stages. That's what you're looking to do. Yeah,

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<v Speaker 1>carry you right on. Hey, listen in the ken in

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<v Speaker 1>the corporate earnings release, you guys noted there here's a

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<v Speaker 1>direct quote. There is still like an know the concertainty

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<v Speaker 1>from the impact of COVID, Nitteen and other external factors,

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<v Speaker 1>is that the supply chain or something else. I would say,

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<v Speaker 1>just it's the supply chain is part of it. But

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<v Speaker 1>also you know, people are still trying to find their

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<v Speaker 1>way in what they do in our markets. A lot

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<v Speaker 1>of people have been out for a while, but you know,

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<v Speaker 1>how will people spend their money? Uh? And how long

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<v Speaker 1>people will continue with some of the hobbies and habits

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<v Speaker 1>that they've got. We're seeing that they're continuing. But as

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<v Speaker 1>people go out to eat more, go on vacations and things,

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<v Speaker 1>you know that there's a there's always a risk of

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<v Speaker 1>of how much money they have to spend on other adventures.

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<v Speaker 1>Right the wallet is just so wide and so you

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<v Speaker 1>make choices. And most people would say so thin exactly exactly,

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<v Speaker 1>specially you've got a kid in college. Hey, listen when

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<v Speaker 1>they I want to ask you, your stock is nearly

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<v Speaker 1>shorted the float as a percentage excuse me of the flow.

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<v Speaker 1>I know CEOs don't like to talk about their stock price,

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<v Speaker 1>But in the world of meme stocks, where high short

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<v Speaker 1>positions get the attention of the retail reddit investor crowd,

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<v Speaker 1>are you a little concerned about getting caught up in that?

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<v Speaker 1>Not really, because the I think the lift we we

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<v Speaker 1>saw it today and we've seen so far is based

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<v Speaker 1>on the performance that we had. And unlike some of

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<v Speaker 1>the other stocks that you you're referring to, they don't

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<v Speaker 1>have the underlying foundation of a good, solid business. We do.

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<v Speaker 1>We've got sales growth, we've got profit growth, and we

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<v Speaker 1>have opportunities for uh you know, expansion online and in

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<v Speaker 1>other markets that a lot of other people don't have.

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<v Speaker 1>So we've got that solid foundation to continue to grow,

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<v Speaker 1>and I think that's what will allow us to whether

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<v Speaker 1>through some of the challenges that other other stocks have seen.

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<v Speaker 1>Can really quickly twenty seconds. One item that's just flying

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<v Speaker 1>off the shelves right now, uh tense ten people people

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<v Speaker 1>are camping like crazy, and so it's that's good for

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<v Speaker 1>us all right. Good to know um, and always good

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<v Speaker 1>to check in with you. Ken Hicks. He's a chairman,

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<v Speaker 1>president and CEO of Academy Sports and Outdoors, Turning us

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<v Speaker 1>from Katie, Texas