ASO

At $51.12 ASO trades at just 9.2x FY2026 EPS and 0.5x sales — optically cheap for a business throwing off $435M of operating cash flow with 17.4% ROE and a manageable $484M total debt load against $330M cash and $2.17B equity. Management is actively returning capital ($199M of buybacks shrank the share count 3.9%, plus $34.7M of dividends), and gross margin actually expanded 90bps to 34.8% as the team navigated tariffs with promotions and value-pricing — a sign the merchandising playbook still works.

The problem is the trajectory. Revenue at $6.05B in FY2026 is still below FY2022's $6.77B, and net income has fallen for four straight years from $671M to $377M. The MD&A is blunt: comparable sales declined 1.5% with comparable transactions down 4.2%, masked only by a 2.9% ticket increase. The 2% reported sales bump came almost entirely from 24 new stores contributing $142.8M, not underlying demand. SG&A jumped 8.2% on $109M of strategic investments (new stores, tech), pushing operating margin down 60bps to 8.5% and operating income down 4.9% — so the growth engine is currently dilutive to profitability.