Outdoor recreation is resuming as people increasingly turn to nature for mental and physical well-being, social interactions and adventure. Notably, studies show that participation in outdoor recreational activities has increased during the pandemic. Almost half of adults in the United States now participate in outdoor recreation at least monthly, and about 20% may have engaged in outdoor recreation for the first time during the pandemic. According to the Bureau of Economic Analysis (BEA) outdoor recreation Generated $688 billion in gross output during a year of shutdowns and closures in 2020.
With the widespread rollout of COVID-19 vaccines and the flexibility of hybrid work arrangements, people are moving outside to enjoy leisure activities, which is likely to lead to increased demand for goods and services in resort areas this spring season. The growing interest and evolving fitness trends around the world are among the major factors driving the growth of this industry.
With that in mind, we think about outdoor leisure stocks Academy Sports and Outdoors, Inc. (ASO), Vista Outdoor Inc. (VSTO), GoPro, Inc. (GPRO), MarineMax, Inc. (HZO) and Johnson Outdoors Inc. (YEAH) might be worth a bet.
Academy Sports and Outdoors, Inc. (ASO)
ASO, through its subsidiaries, operates as a retailer of sporting goods and outdoor recreation products. It sells its products under the Academy Sports + Outdoors, Magellan Outdoors, BCG, O’rageous, and Outdoor Gourmet brand names. ASO is based in Katy, Texas.
Last month, ASO announced it was launching a free line of girls’ activewear and fresh styles for spring. The new patterns and colors will be updated throughout the spring season. Customers can shop Freely’s latest women’s, women’s plus and girls’ collections in all of its 259 stores, and as such should contribute significantly to the company’s revenue stream.
On January 25, 2022, ASO announced it would be opening at least eight new stores in its existing markets this year while expanding its footprint in Virginia and West Virginia. With these openings, ASO will have 267 stores in 18 states, further expanding its market reach.
ASO’s net sales increased 18.1% year over year to $1.59 billion for the third quarter ended October 30, 2021 net income improved 170.7% year over year to $161.31 million. Earnings per share rose 132.4% year over year to $1.72.
Consensus EPS estimate of $1.44 for the fourth fiscal quarter ended January 31, 2022 represents a 31.8% year-over-year improvement. Consensus estimate of revenue of $1.78 billion Dollars for the same quarter represents an 11.4% increase over the same period last year. Also, it has an impressive earnings surprise history; it beat Street’s EPS estimates in each of the last four quarters.
ASO has gained 53.5% in price over the past year and 18.2% over the past month to close the last trading session at $37.55.
ASO’s strong fundamentals are reflected in its POWR ratings. The stock has a B overall, which means Buy in our POWR rating system. The POWR ratings are calculated considering 118 different factors, with each factor being optimally weighted.
ASO also has a B grade in growth, value, sentiment and quality. It is #1 of 36 stocks in the ranking Athletics & Leisure Industry.
Beyond the above, we also rated ASO for momentum and stability. Get all ASO reviews here.
Vista Outdoor Inc. (VSTO)
VSTO in Anoka. Minn., develops, manufactures, and markets consumer products for the outdoor sports and recreation markets in the United States and internationally. The Company operates through two segments: Shooting Sports; and outdoor products.
VSTO and Stockperks, a retail investor engagement company, recently announced the launch of the Vista Outdoor Shareholder Rewards Program on the Stockperks app. This allows retail shareholders using the Stockperks app to redeem merchandise discounts on some of Vista Outdoor’s leading brands. This is intended to improve the company’s relationship with its retail investors.
For the third fiscal quarter ended December 26, 2021, VSTO’s net revenue increased 38.3% year-over-year to $794.65 million, driven by strong double-digit growth in both business segments. Gross profit increased 72.4% year over year to $281.47 million. Net income was $118.14 million, up 49.8% year-over-year, while EPS was $2.00, up 52.7% year-over-year .
VSTO revenue for the current quarter is expected to be $759.41 million, representing year-over-year growth of 27.3%. The company’s EPS for the same quarter is expected to rise 77.2% year over year to $1.81. VSTO also beat consensus EPS estimates in each of the last four quarters.
Over the past year, the stock is up 16.8% to close yesterday’s trading session at $36.78. It’s up 9.7% over the past month.
It comes as no surprise that VSTO has an overall B rating, which equates to buy in our POWR rating system.
VSTO has an A grade in Value and a B in Growth and Quality. It is #2 in the athletics and leisure industry.
In addition to the POWR rating levels just highlighted, one can see the VSTO ratings for Stability, Sentiment, and Momentum here.
GoPro, Inc. (GPRO)
GPRO develops and sells cameras, mountable and wearable accessories, subscription services and software worldwide. The San Mateo, California company’s product offering includes its flagship line of waterproof cameras and other outdoor recreation accessories.
GPRO’s revenue increased 9.3% year over year to $391.15 million for the fourth fiscal quarter ended December 31, 2021 – GAAP net income increased 8.3% year over year to 66 $.15 million. The company’s non-GAAP EPS rose 5.1% to $0.41 over the same period.
Analysts expect GPRO’s revenue for the fiscal quarter ended March 31, 2022 to be $217 million, up 6.5% year-over-year. The company’s EPS for the same period is expected to increase 86% year over year to $0.06. It also beat consensus EPS estimates in each of the last four quarters.
GPRO stock is slightly down for the day, closing the last trading session at $8.26.
GPRO’s solid fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which means Buy in our proprietary rating system.
GPRO is also rated B in quality and value. Within the Technology – Hardware 15th out of 46 stocks in the industry.
click here to view additional POWR ratings for Growth, Mood, Momentum and Stability for GPRO.
MarineMax, Inc. (HZO)
HZO, based in Clearwater, Florida, is a recreational boat and yacht retailer and superyacht services company in the United States that operates through two segments: Retail; and product manufacturing.
This month, HZO announced an extension of its previously announced share repurchase plan, authorizing the company to repurchase up to 10 million shares of common stock through March 31, 2024. This should potentially improve returns for existing shareholders. The previous plan had authorized the repurchase of up to 10 million shares by March 31, 2022, of which approximately 700,000 shares had been repurchased as of February 24, 2022.
HZO revenue increased 14.9% compared to the same quarter last year to a record $472.69 million for the fiscal first quarter ended December 31, 2021. The sales growth was due in part to strong same-store sales growth of 9%, driven by higher unit volumes. Operating income for the quarter was $47.20 million, a 47.6% increase year-over-year, while net income was $35.94 million, a 52.3% increase compared to the previous year. Net earnings per share rose 52.9% year over year to $1.59.
The Street expects HZO’s earnings per share to improve by 5.5% year-on-year to $1.78 for the fiscal quarter ended March 31, 2022. Consensus estimate of revenue of $550.12 million for the same period represents a 5.2% increase year-over-year. It beat Street’s EPS estimates in each of the last four quarters.
Over the past month, the stock is up 1.1% to close yesterday’s trading session at $44.01.
HZO’s POWR ratings reflect this promising outlook. The company has an overall rating, which translates to “buy” in our proprietary rating system.
HZO is rated A for value and B for quality. It is number 3 in the athletics and leisure industry.
To view additional POWR ratings for Momentum, Growth, Sentiment and Stability for HZO, click here.
Johnson Outdoors Inc. (JOUT)
JOUT designs, manufactures and markets seasonal and outdoor recreational products for fishing worldwide. It operates through four segments: Fisheries; Camping; watercraft recreation; and diving. JOUT is located in Racine, Wisconsin.
Last month, JOUT declared a quarterly cash dividend of $0.30 per Class A share and $0.2727 per Class B share, payable on April 28, 2022 to shareholders of record at the close of business on April 14, 2022.
JOUT net sales for the first quarter ended December 31, 2021 increased 20% from net sales for the pre-pandemic quarter of December 2019. Additionally, camping revenue increased 16% year over year for the same period, reflecting the continued strong demand, while revenue in both the recreational watercraft and diving segments grew 17% over the prior-year quarter.
The Company’s revenue for the fiscal year ended September 30, 2022 is expected to increase marginally from the prior year to $753.72 million. Also, revenue is expected to grow 5.6% in the following year.
JOUT shares are up 1.2% over the past month to close the last trading session at $80.62.
The stock has an overall rating of B, which equates to a Buy in our POWR rating system. It has an A in Sentiment and a B in Value. The stock is ranked 7th in the athletics and leisure industry.
To obtain JOUT’s momentum, stability, quality and growth ratings, click here.
ASO shares traded at $37.13 per share on Thursday afternoon, down $0.42 (-1.12%). Year-to-date, ASO is down -15.24% versus a -5.22% gain in the benchmark S&P 500 index over the same period.
About the Author: Subhasree Kar
Subhasree’s strong interest in financial instruments led her to pursue a career as an investment analyst. After her master’s degree in economics, she gained knowledge in equity research and portfolio management at Finlatics. More…