Academy Sports: Mixed Q4 Discounted In Valuation

Academy Sports and Outdoors remains a "Buy," with shares below 10x earnings despite mixed Q4 results and near-term margin pressure. ASO's accelerated store expansion and robust e-commerce growth provide a 4%-5% annual sales tailwind, though new store costs temporarily weigh on margins. Inventory growth outpaces sales, raising concerns about potential markdowns and gross margin pressure in the first half of 2026.