Question · Q3 2026
Zach Bacon, on behalf of Justin Kleber, asked about the Q4 guidance implying SG&A dollars are below Q3, which is unusual for the normal sequential trend, inquiring about the drivers and sustainability of this dynamic. He also asked about the plan to resume buybacks in Q4, given the implied strong free cash flow, and how this buyback plan compares to Q1.
Answer
CFO Carl Ford stated that Q4 SG&A at the midpoint implies 100 basis points of leverage, driven by a focus on efficiency and not undertaking numerous price changes in November and December. He also mentioned a sale leaseback of a property in Q4 of the prior year as a component. Regarding buybacks, Carl clarified that they are not embedded in the guidance. He reiterated the capital allocation philosophy: first, stability (cash, ABL); second, investing in the company (including inventory management); and third, returning capital to shareholders through a nominal dividend and buybacks. He noted that the stock is attractively priced and the company generates good cash flow.
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