What Happened?
Shares of sporting goods retailer Academy Sports & Outdoor (NASDAQ: ASO) fell 3.7% in the morning session after the athletic retail sector felt pressure as industry bellwether Nike reported disappointing results.
The negative sentiment followed an 11% plunge in Nike's stock a few days prior, on December 19, after its earnings report revealed significant challenges. Nike's gross margins shrank, which the company linked to rising tariff costs, and its revenue in Greater China fell for the sixth straight quarter. When a major brand like Nike struggles, it often creates concern for the stores that sell its products. The news created downward pressure on retailers like Dick's Sporting Goods, which depend on strong brands to attract customers. This ripple effect likely worried investors that Academy Sports could also face weaker sales or need to increase promotions.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Academy Sports? Access our full analysis report here.
What Is The Market Telling Us
Academy Sports’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 19 days ago when the stock gained 2.9% on the news that Telsey Advisory Group reaffirmed its positive 'Outperform' rating on the stock. The firm, led by analyst Cristina Fernandez, kept its price target at $65.00. This positive assessment followed news from the previous day that Academy Sports had expanded its Board of Directors, appointing Michael Dastugue, Shannon Hennessy, and Clay Johnson. The expansion increased the board from ten to twelve members. This move was intended to add expertise in digital transformation, artificial intelligence, finance, and real estate to support the company's long-term growth goals.
Academy Sports is down 8.2% since the beginning of the year, and at $51.88 per share, it is trading 15.2% below its 52-week high of $61.17 from December 2024. Investors who bought $1,000 worth of Academy Sports’s shares 5 years ago would now be looking at an investment worth $2,597.
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