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Academy Sports and Outdoors runs to new 52-week high after profit guidance impresses

Academy Sports and Outdoors (NASDAQ:ASO) soared to a new 52-week high on Wednesday after the sporting goods retailer set profit guidance ahead of expectations.

For the full year, ASO sees adjusted EPS of $7.50 to $7.65 vs. a prior view for $6.75 to $7.50 and the consensus estimate of $7.17.

Despite a 7.2% decline in comparable sales during Q3, Academy Sports (ASO) seemed to have impressed investors on the margin line. Gross margin came in at 35.0% of sales vs. 35.2% a year ago, which was not a bad results for the retail sector. An increase in inventory shrink and e-commerce shipping costs was largely offset by an increase in merchandise margins. When compared to 2019, the gross margin rate expanded by 340 basis points.

Net income was $131.7M during the quarter vs. $161.3M a year ago.

Looking ahead, CEO Ken Hicks stated ASO's focus is on the long-term growth opportunities in stores and online through consistent operational excellence, strong financial discipline, and executing store and omnichannel expansion plans.

Shares of ASO were up 15.58% at 2:15 p.m. to $57.02. The stock traded as high as $57.57 earlier in the session.

The Seeking Alpha Quant Rating on ASO flipped to Strong Buy from Hold on April 18 after which shares rallied more than 40%.