Financial Data and Key Metrics Changes - The company reported a positive comparable sales growth in Q2, with mid-single digits comp growth for new stores opened in the past couple of years [4][5] - E-commerce sales accelerated by nearly 18% in Q2 compared to Q1, indicating a strong performance in the online segment [5] - Gross margin increased by 30 basis points year-to-date, attributed to effective merchandising strategies [29] Business Line Data and Key Metrics Changes - The introduction of the Jordan brand has contributed to double-digit growth in the combined Nike and Jordan categories, with Jordan being a significant contributor [12] - The company has expanded its Nike assortment, increasing the square footage dedicated to Nike products by 10-15% in stores [21] - The company has seen a mid-teens acceleration in sales from customers earning over $100,000 annually, indicating a shift towards higher-income consumers [7][8] Market Data and Key Metrics Changes - Traffic from the lowest income quintiles (under $50,000) has declined in the high single digits, while the middle income quintile remains stable [6][7] - The company has successfully attracted higher-income customers, with a notable increase in sales from those making over $100,000 [7][8] Company Strategy and Development Direction - The company aims to sustain top-line growth and positive comparable sales through strategic initiatives and investments in new stores and e-commerce [27][33] - The focus remains on providing value, with a commitment to maintaining competitive pricing despite potential tariff impacts [28][29] - The company is exploring new brand partnerships and expanding its product offerings to enhance customer engagement and drive sales [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the consumer's resilience and the company's positioning to benefit from trade-down behavior among consumers [44][45] - The company anticipates that tariff impacts will become more pronounced in the second half of the year, but believes it can manage these challenges effectively [44][45] - There is a belief that the initiatives currently in place are gaining traction and will lead to sustained comparable sales growth [27][40] Other Important Information - The company has successfully pulled forward inventory to mitigate tariff impacts, resulting in an 8% increase in inventory dollars and a 4.5% increase in units on a per-store basis [50][52] - The capital allocation strategy includes share buybacks and investments in store expansion, with a focus on maintaining a strong balance sheet [42][43] Q&A Session Summary Question: What are the expectations for the environment in the second half of 2025? - Management expects the environment to remain the same, with potential for low single-digit inflation and resilient consumer behavior [44] Question: Have there been any elasticity responses to price increases? - The company has observed no unit erosion for certain items despite price increases, while some categories experienced unit fall-off when crossing price thresholds [46][47] Question: What are the expectations for inventory growth into the second half? - The company has pulled forward inventory and expects to manage inventory growth effectively, guiding for 20 to 25 new stores for the full year [50][51] Question: How does the company view margins outside of tariff costs? - Management sees upside opportunities in supply chain efficiencies and has implemented a new warehouse management system to improve operations [54][56] Question: What is the outlook on market share consolidation? - Management believes market share consolidation may accelerate, particularly among companies with weaker balance sheets facing tariff pressures [57]

Financial Data and Key Metrics Changes - The company reported a positive comparable store sales growth in Q2, with mid-single-digit increases in stores opened in the past couple of years [4] - E-commerce sales accelerated by nearly 18% in Q2 compared to Q1, indicating a strong performance in the online segment [4] - Gross margin improved by 30 basis points year-to-date, with expectations to be up 10 to 60 basis points for the full year [40][41] Business Line Data and Key Metrics Changes - The introduction of the Jordan brand has contributed to double-digit growth in the combined Nike and Jordan business [15] - The company has expanded its Nike assortment, increasing the square footage dedicated to Nike products by 10-15% across stores [28] - The company has seen a mid-teens acceleration in sales from customers earning over $100,000 annually, indicating a shift towards higher-income consumers [8] Market Data and Key Metrics Changes - Traffic from the lowest two income quintiles has decreased in high single digits, while the middle income quintile remains stable [6][7] - The company has successfully attracted higher-income customers, with a notable increase in sales from those making over $100,000 [8] Company Strategy and Development Direction - The company is focused on new store growth and has plans to expand the Jordan shop concept to all stores over the next two years [16] - The strategy includes a back-to-basics approach for the e-commerce platform, enhancing site functionality to improve customer experience [4] - The company aims to maintain its value proposition while navigating tariff impacts and adjusting pricing strategies accordingly [36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustaining same-store sales growth, citing successful initiatives and a focus on value [35] - The company is prepared for potential price increases due to tariffs but believes its value offering will continue to attract customers [65] - Management noted that the consumer environment remains stable, with expectations of low single-digit inflation [64] Other Important Information - The company has pulled forward approximately $100 million in inventory at pre-tariff prices to mitigate tariff impacts [39] - The capital allocation strategy remains focused on stability, investing in growth initiatives, and returning value to shareholders through buybacks and dividends [62] Q&A Session Summary Question: Expectations for the consumer environment in FY '26 compared to FY '25 - Management indicated that the environment is expected to be similar, with potential price adjustments due to tariffs impacting consumer behavior [64] Question: Pricing elasticity response to price increases - Management noted varied responses to price increases, with some categories experiencing no unit erosion while others saw a negative reaction when crossing price thresholds [66][67] Question: Expectations for inventory growth in the second half - Inventory is up 8% in dollars and 4.5% in units per store, with adjustments made for unit buys in the second half [73] Question: Margins outlook outside of tariff costs - Management sees upside opportunities in supply chain efficiencies and has launched a new warehouse management system to improve operations [77] Question: Competitive landscape and market share consolidation - Management anticipates some consolidation in the market due to the hidden costs of tariffs affecting companies with weaker balance sheets [81]

Core Insights - Academy Sports and Outdoors, Inc. reported revenue of $1.6 billion for the quarter ended July 2025, reflecting a year-over-year increase of 3.3% but a slight miss of 0.67% against the Zacks Consensus Estimate of $1.61 billion [1] - The company's EPS for the quarter was $1.94, down from $2.03 in the same quarter last year, resulting in an EPS surprise of -8.49% compared to the consensus estimate of $2.12 [1] Financial Performance Metrics - Comparable Sales Growth was 0.2%, outperforming the six-analyst average estimate of -0.4% [4] - Total Merchandise Sales reached $1.59 billion, exceeding the two-analyst average estimate of $1.57 billion, with a year-over-year change of +3.3% [4] - Net Sales in the Merchandise Division for Outdoors was $448.94 million, surpassing the average estimate of $431.73 million, marking a year-over-year increase of +14.6% [4] - Net Sales for Sports and Recreation was $369.79 million, falling short of the average estimate of $382.84 million, representing a year-over-year decline of -8% [4] - Net Sales for Footwear was $323.24 million, slightly above the average estimate of $321.82 million, with a year-over-year increase of +3.6% [4] - Net Sales for Apparel was $451.12 million, exceeding the average estimate of $429.69 million, reflecting a year-over-year change of +3.3% [4] - Other Sales amounted to $6.75 million, significantly below the average estimate of $26.31 million, with a year-over-year change of +2.7% [4] Stock Performance - Shares of Academy Sports and Outdoors have returned +3.9% over the past month, slightly outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements, including balance sheets, income, equity, cash flow, and condensed notes on operations and accounting policies [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Details the company's financial position, including assets, liabilities, and stockholders' equity at specific reporting dates | Metric | August 2, 2025 (in thousands) | February 1, 2025 (in thousands) | August 3, 2024 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | | **ASSETS** | | | | | Total current assets | $1,985,922 | $1,710,149 | $1,812,388 | | Property and equipment, net | $584,045 | $525,136 | $470,752 | | Total assets | $5,275,983 | $4,900,963 | $4,874,358 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | | Total current liabilities | $1,212,008 | $960,881 | $1,091,275 | | Total liabilities | $3,200,833 | $2,896,928 | $2,921,964 | | Total stockholders' equity | $2,075,150 | $2,004,035 | $1,952,394 | - Total assets increased to **$5,275,983 thousand** as of August 2, 2025, from **$4,900,963 thousand** on February 1, 2025, and **$4,874,358 thousand** on August 3, 2024. This growth was primarily driven by increases in merchandise inventories, net, and property and equipment, net[11](index=11&type=chunk) - Total liabilities increased to **$3,200,833 thousand** as of August 2, 2025, from **$2,896,928 thousand** on February 1, 2025, mainly due to a significant rise in accounts payable and long-term lease liabilities[11](index=11&type=chunk) [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Reports the company's financial performance over specific periods, detailing net sales, gross margin, operating income, and net income | Metric | Thirteen Weeks Ended August 2, 2025 (in thousands) | Thirteen Weeks Ended August 3, 2024 (in thousands) | Twenty-Six Weeks Ended August 2, 2025 (in thousands) | Twenty-Six Weeks Ended August 3, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------------- | :------------------------------------------------- | :-------------------------------------------------- | :-------------------------------------------------- | | Net Sales | $1,599,838 | $1,548,980 | $2,951,247 | $2,913,200 | | Gross Margin | $576,733 | $558,725 | $1,035,602 | $1,014,519 | | Operating Income | $172,381 | $190,086 | $241,646 | $292,469 | | Net Income | $125,434 | $142,588 | $171,518 | $219,053 | | Basic EPS | $1.89 | $1.99 | $2.57 | $3.00 | | Diluted EPS | $1.85 | $1.95 | $2.52 | $2.93 | - For the thirteen weeks ended August 2, 2025, Net Sales increased by **3.3% YoY** to **$1,599,838 thousand**, while Net Income decreased by **12.0% YoY** to **$125,434 thousand**. Diluted EPS also decreased by **5.1% YoY** to **$1.85**[13](index=13&type=chunk) - For the twenty-six weeks ended August 2, 2025, Net Sales increased by **1.3% YoY** to **$2,951,247 thousand**, but Net Income decreased by **21.7% YoY** to **$171,518 thousand**. Diluted EPS saw a **14.0% YoY** decline to **$2.52**[13](index=13&type=chunk) [Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Presents changes in equity, including common stock, retained earnings, and additional paid-in capital, reflecting net income and share transactions | Metric | As of August 2, 2025 (in thousands) | As of February 1, 2025 (in thousands) | As of August 3, 2024 (in thousands) | | :-------------------------------- | :---------------------------------- | :------------------------------------ | :---------------------------------- | | Total Stockholders' Equity | $2,075,150 | $2,004,035 | $1,952,394 | | Common Stock Shares Outstanding | 66,625 | 68,333 | 70,916 | | Retained Earnings | $1,818,967 | $1,756,258 | $1,707,101 | | Additional Paid-In Capital | $255,517 | $247,094 | $244,584 | - Total stockholders' equity increased from **$2,004,035 thousand** on February 1, 2025, to **$2,075,150 thousand** on August 2, 2025, primarily due to net income contributions and equity compensation, partially offset by share repurchases and dividends[15](index=15&type=chunk) - The Company repurchased **2,080,772 shares** of common stock for retirement during the twenty-six weeks ended August 2, 2025, totaling **$99,900 thousand**, reducing outstanding shares[15](index=15&type=chunk)[29](index=29&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities over specific periods | Cash Flow Activity | Twenty-Six Weeks Ended August 2, 2025 (in thousands) | Twenty-Six Weeks Ended August 3, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------------- | :------------------------------------------------- | | Net cash provided by operating activities | $236,047 | $291,023 | | Net cash used in investing activities | $(107,899) | $(73,739) | | Net cash used in financing activities | $(116,217) | $(240,636) | | Net increase (decrease) in cash and cash equivalents | $11,931 | $(23,352) | - Net cash provided by operating activities decreased by **$54,976 thousand (18.9%)** for the twenty-six weeks ended August 2, 2025, compared to the prior year, primarily due to lower net income and a decrease in cash flows from operating assets and liabilities[20](index=20&type=chunk)[139](index=139&type=chunk) - Net cash used in investing activities increased by **$34,160 thousand (46.3%)** for the twenty-six weeks ended August 2, 2025, mainly driven by increased capital expenditures for new and existing stores and distribution centers[20](index=20&type=chunk)[139](index=139&type=chunk) - Net cash used in financing activities decreased by **$124,419 thousand (51.7%)** for the twenty-six weeks ended August 2, 2025, primarily due to a **$121.3 million** decrease in cash outflows for common stock repurchases[20](index=20&type=chunk)[139](index=139&type=chunk) [Condensed Notes to Consolidated Financial Statements](index=8&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the consolidated financial statements, covering various accounting policies and financial items [Note 1. Nature of Operations](index=8&type=section&id=Note%201.%20Nature%20of%20Operations) Describes the company's business, including its retail operations, store count, geographic presence, and sales channels - Academy Sports and Outdoors, Inc. is a leading full-line sporting goods and outdoor recreational products retailer in the United States, operating **306 retail locations** in **21 states** and **three distribution centers** as of August 2, 2025. The Company also sells merchandise via its website and mobile app[23](index=23&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=8&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the key accounting principles and methods used in preparing the financial statements, including share repurchase programs and tax law changes - The Company's Board of Directors approved a new share repurchase program on December 4, 2024, authorizing up to **$700 million** in repurchases over three years, replacing the previous program. As of August 2, 2025, **$536.5 million** remained available under this program[28](index=28&type=chunk)[30](index=30&type=chunk) | Period | Shares Repurchased | Aggregate Amount Paid (in millions) | | :-------------------------------- | :----------------- | :-------------------------------- | | Thirteen Weeks Ended August 2, 2025 | — | $0.0 | | Thirteen Weeks Ended August 3, 2024 | 1,809,856 | $98.8 | | Twenty-Six Weeks Ended August 2, 2025 | 2,080,772 | $99.9 | | Twenty-Six Weeks Ended August 3, 2024 | 3,793,823 | $222.3 | - The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, introduces significant changes to U.S. tax law, including full deductibility of qualified capital and domestic R&D expenditures. The Company anticipates a material decrease in current tax expense and a corresponding increase in deferred tax expense for fiscal year ending January 31, 2026, with no net impact on the effective tax rate[32](index=32&type=chunk) [Note 3. Net Sales](index=11&type=section&id=Note%203.%20Net%20Sales) Details net sales by merchandise division and other sales, including e-commerce contribution to overall sales | Merchandise Division | Thirteen Weeks Ended August 2, 2025 (in thousands) | Thirteen Weeks Ended August 3, 2024 (in thousands) | Twenty-Six Weeks Ended August 2, 2025 (in thousands) | Twenty-Six Weeks Ended August 3, 2024 (in thousands) | | :--------------------- | :------------------------------------------------- | :------------------------------------------------- | :-------------------------------------------------- | :-------------------------------------------------- | | Outdoors | $448,937 | $438,105 | $831,488 | $826,262 | | Sports and recreation | $369,791 | $357,145 | $704,837 | $695,743 | | Apparel | $451,121 | $435,041 | $783,802 | $769,409 | | Footwear | $323,243 | $312,120 | $615,918 | $604,553 | | Total merchandise sales | $1,593,092 | $1,542,411 | $2,936,045 | $2,895,967 | | Other sales | $6,746 | $6,569 | $15,202 | $17,233 | | Net Sales | $1,599,838 | $1,548,980 | $2,951,247 | $2,913,200 | - E-commerce sales represented **10.9%** of merchandise sales for the thirteen weeks ended August 2, 2025, up from **9.7%** in the prior year period. For the twenty-six weeks, e-commerce sales were **10.5%**, up from **9.4%** in the prior year[37](index=37&type=chunk) [Note 4. Long-Term Debt](index=12&type=section&id=Note%204.%20Long-Term%20Debt) Outlines the company's long-term debt obligations, including term loans, notes, and available borrowing capacity under its ABL facility | Debt Type | August 2, 2025 (in thousands) | February 1, 2025 (in thousands) | August 3, 2024 (in thousands) | | :-------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | | Term Loan, due November 2027 | $87,250 | $88,750 | $90,250 | | 6.00% Notes, due November 2027 | $400,000 | $400,000 | $400,000 | | Total debt | $487,250 | $488,750 | $490,250 | | Long-term debt, net | $481,738 | $482,679 | $483,617 | - As of August 2, 2025, the Company had no borrowings outstanding under its ABL Facility, with an available borrowing capacity of **$990.9 million**, and outstanding letters of credit of approximately **$9.1 million**[42](index=42&type=chunk) - The Term Loan had a weighted average interest rate of **8.19%** as of August 2, 2025, with quarterly principal payments of **$750 thousand** required through September 30, 2027[43](index=43&type=chunk) [Note 5. Fair Value Measurements](index=13&type=section&id=Note%205.%20Fair%20Value%20Measurements) Details the fair value of financial instruments, including money market funds and long-term debt, categorized by valuation hierarchy - The Company held **$250.2 million** in money market funds as of August 2, 2025, which are classified as cash and redeemable on demand[48](index=48&type=chunk) - The estimated fair value of the Term Loan and Notes was **$0.5 billion** as of August 2, 2025, February 1, 2025, and August 3, 2024, classified as Level 2 within the fair value hierarchy[49](index=49&type=chunk) [Note 6. Property and Equipment](index=14&type=section&id=Note%206.%20Property%20and%20Equipment) Provides a breakdown of property and equipment, net, including leasehold improvements, equipment, software, and construction in progress | Category | August 2, 2025 (in thousands) | February 1, 2025 (in thousands) | August 3, 2024 (in thousands) | | :-------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | | Leasehold improvements | $709,739 | $663,869 | $605,746 | | Equipment and software | $754,848 | $733,939 | $713,400 | | Furniture and fixtures | $451,879 | $431,577 | $407,371 | | Construction in progress | $64,362 | $54,236 | $53,326 | | Building and Land | $33,748 | $16,010 | $14,921 | | Total property and equipment | $2,014,576 | $1,899,631 | $1,794,764 | | Accumulated depreciation and amortization | $(1,430,531) | $(1,374,495) | $(1,324,012) | | Property and equipment, net | $584,045 | $525,136 | $470,752 | - Depreciation expense for the thirteen weeks ended August 2, 2025, was **$31.0 million**, up from **$28.9 million** in the prior year period. For the twenty-six weeks, it was **$61.2 million**, up from **$57.8 million**[51](index=51&type=chunk) [Note 7. Accrued Expenses and Other Current Liabilities](index=14&type=section&id=Note%207.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Details various accrued expenses and other current liabilities, including personnel costs, deferred revenue, and income taxes payable | Category | August 2, 2025 (in thousands) | February 1, 2025 (in thousands) | August 3, 2024 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | | Accrued personnel costs | $40,807 | $46,178 | $34,472 | | Deferred revenue - gift cards and other | $88,301 | $98,641 | $82,619 | | Income taxes payable | $11,562 | $6,090 | $29,114 | | Property taxes | $38,714 | $16,833 | $36,425 | | Accrued expenses and other current liabilities | $266,021 | $230,323 | $259,069 | [Note 8. Share-Based Compensation](index=14&type=section&id=Note%208.%20Share-Based%20Compensation) Explains the company's share-based compensation plans, including equity compensation expense and shares available for future issuance - Equity compensation expense was **$7.6 million** for the thirteen weeks ended August 2, 2025, and **$15.1 million** for the twenty-six weeks ended August 2, 2025. This represents a slight decrease for the thirteen-week period and an increase for the twenty-six-week period compared to the prior year[55](index=55&type=chunk) - As of August 2, 2025, there were **3,556,643 shares** authorized and available for future issuance under the 2020 Omnibus Incentive Plan and **1,402,072 shares** under the 2020 Employee Stock Purchase Plan (ESPP)[53](index=53&type=chunk)[54](index=54&type=chunk) [Note 9. Earnings per Common Share](index=16&type=section&id=Note%209.%20Earnings%20per%20Common%20Share) Presents basic and diluted earnings per common share, along with the underlying net income and weighted average shares outstanding | Metric | Thirteen Weeks Ended August 2, 2025 | Thirteen Weeks Ended August 3, 2024 | Twenty-Six Weeks Ended August 2, 2025 | Twenty-Six Weeks Ended August 3, 2024 | | :-------------------------------- | :---------------------------------- | :---------------------------------- | :------------------------------------ | :------------------------------------ | | Net income (in thousands) | $125,434 | $142,588 | $171,518 | $219,053 | | Weighted average common shares outstanding - basic (in thousands) | 66,539 | 71,829 | 66,831 | 72,911 | | Weighted average common shares outstanding - diluted (in thousands) | 67,689 | 73,289 | 68,043 | 74,651 | | Earnings per common share - basic | $1.89 | $1.99 | $2.57 | $3.00 | | Earnings per common share - diluted | $1.85 | $1.95 | $2.52 | $2.93 | - Diluted EPS decreased from **$1.95** to **$1.85** for the thirteen weeks ended August 2, 2025, and from **$2.93** to **$2.52** for the twenty-six weeks ended August 2, 2025, primarily due to lower net income and a reduction in weighted average common shares outstanding[58](index=58&type=chunk) [Note 10. Commitments and Contingencies](index=16&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) Discloses contractual obligations and potential liabilities from legal proceedings, assessing their potential financial impact - As of August 2, 2025, the Company had **$121.5 million** in obligations under technology-related, construction, and other contractual commitments, with approximately **$63.3 million** payable within the next 12 months[59](index=59&type=chunk) - The Company is involved in various lawsuits and claims, but management believes the ultimate resolution will not materially impact its financial position, results of operations, or cash flows, considering indemnities, defenses, insurance, and reserves[61](index=61&type=chunk)[62](index=62&type=chunk) [Note 11. Segment Information](index=17&type=section&id=Note%2011.%20Segment%20Information) Identifies the company's operating and reportable segments, detailing how resources are allocated and performance is assessed - The Company operates as a single operating and reportable segment, deriving revenues from selling full-line sporting goods and outdoor recreational products through retail stores and online channels[63](index=63&type=chunk) - The Chief Executive Officer, as the chief operating decision maker (CODM), allocates resources and assesses performance at a Company level using consolidated net income and evaluates assets as reported on the Consolidated Balance Sheets[64](index=64&type=chunk) [Note 12. Subsequent Events](index=17&type=section&id=Note%2012.%20Subsequent%20Events) Reports significant events occurring after the balance sheet date but before the financial statements are issued, such as dividend declarations - On August 28, 2025, the Board of Directors declared a quarterly cash dividend of **$0.13 per share** for the fiscal quarter ended August 2, 2025, payable on October 9, 2025[65](index=65&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's perspective on financial condition and results, covering business overview, key metrics, financial analysis, non-GAAP measures, liquidity, and accounting policies [Cautionary Statement Regarding Forward-looking Statements](index=18&type=section&id=Cautionary%20Statement%20Regarding%20Forward-looking%20Statements) Highlights that the report contains forward-looking statements subject to various risks and uncertainties that are difficult to predict - The report contains forward-looking statements subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify, including macroeconomic conditions, industry trends, and business strategy[66](index=66&type=chunk)[67](index=67&type=chunk) [Summary of Principal Factors that Make an Investment Speculative or Risky](index=18&type=section&id=Summary%20of%20Principal%20Factors%20that%20Make%20an%20Investment%20Speculative%20or%20Risky) Outlines key risks such as economic decline, supply chain reliance, competition, regulatory changes, and indebtedness impacting investment speculation - Key risks include overall economic decline and consumer spending, reliance on internationally manufactured merchandise (especially from China), ability to manage information systems and inventory, intense competition, supply chain disruptions, and the ability to execute store growth plans[69](index=69&type=chunk)[73](index=73&type=chunk) - Legal and regulatory risks, product safety, climate change, intellectual property protection, and risks related to the Company's indebtedness and common stock ownership are also highlighted as speculative factors[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) [Overview](index=20&type=section&id=Overview) Provides a general description of the company's operations, including store count, team members, distribution centers, and product assortment - As of August 2, 2025, the Company operated **306 stores** across **21 states**, supported by approximately **23,000 team members**, three distribution centers, and an e-commerce platform[79](index=79&type=chunk) | Period | Beginning Stores | Q1 New Stores | Q2 New Stores | Closed | Ending Stores | | :--------------------- | :--------------- | :------------ | :------------ | :----- | :------------ | | Twenty-Six Weeks Ended August 2, 2025 | 298 | 5 | 3 | — | 306 | | Twenty-Six Weeks Ended August 3, 2024 | 282 | 2 | 1 | — | 285 | - The Company's product assortment focuses on outdoor (**28%**), sports and recreation (**23%**), apparel (**28%**), and footwear (**21%**) categories, including national and private label brands, with a localized merchandising strategy[77](index=77&type=chunk) [Tariffs and Other Macroeconomic Trends](index=21&type=section&id=Tariffs%20and%20Other%20Macroeconomic%20Trends) Discusses the impact of global macroeconomic trends, such as inflation and tariffs, on consumer spending and the company's mitigation strategies - The Company is actively monitoring global macroeconomic trends, including inflation and tariffs, which have impacted consumer spending. Strategies to mitigate impact include adjusting inventory, strategic pricing, diversifying sourcing, and vendor negotiations[81](index=81&type=chunk) [How We Assess the Performance of Our Business](index=21&type=section&id=How%20We%20Assess%20the%20Performance%20of%20Our%20Business) Explains the key metrics and non-GAAP measures used by management to evaluate business performance and guide strategic decisions - Management uses comparable sales, transactions, average ticket, and non-GAAP metrics like Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share, and Adjusted Free Cash Flow to evaluate business performance and make strategic decisions[82](index=82&type=chunk)[83](index=83&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - Comparable sales are defined as the percentage increase or decrease for stores open after thirteen full fiscal months and all e-commerce sales, with e-commerce sales (including BOPIS) directly impacting comparable sales results[83](index=83&type=chunk) [Net Sales](index=21&type=section&id=Net%20Sales) Analyzes factors influencing net sales, including new store openings, comparable sales, inventory management, and omnichannel capabilities - Net sales are influenced by new store openings, comparable sales, inventory management, vendor relations, seasonality, weather, consumer preferences, and promotions. The Company opened **21 new stores** since the end of the 2024 second quarter, generating **$60.8 million** in net sales during the 2025 second quarter[88](index=88&type=chunk)[89](index=89&type=chunk)[93](index=93&type=chunk)[103](index=103&type=chunk) - The expansion of omnichannel capabilities, including the mobile app, website optimization, and BOPIS/ship-to-store programs, has driven increased sales, with stores facilitating approximately **95%** of total sales during the 2025 year-to-date second quarter[92](index=92&type=chunk) - A shift in sales mix towards softgoods (apparel and footwear) generally has a positive impact on gross margin due to higher margins compared to hardgoods (outdoors and sports and recreation)[91](index=91&type=chunk) [Gross Margin](index=23&type=section&id=Gross%20Margin) Defines gross margin and discusses factors affecting it, such as sales volume, promotional activities, product mix, and inventory costs - Gross margin is net sales less cost of goods sold, influenced by sales volume, promotional activities, product mix (including private label), and control over inventory and logistics costs. Shrinkage can materially negatively impact gross margin[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) [Selling, General and Administrative Expenses](index=23&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) Analyzes trends in SG&A expenses, highlighting increases due to strategic investments in new stores and technology - SG&A expenses increased from **24.8%** of net sales in the 2024 year-to-date second quarter to **26.9%** in the 2025 year-to-date second quarter, primarily due to increased strategic investments, including the addition of **21 new stores**[97](index=97&type=chunk) | Period | Number of New Stores Opened | Total Pre-opening Expenses Incurred (in millions) | | :-------------------------------- | :-------------------------- | :---------------------------------------------- | | Thirteen Weeks Ended August 2, 2025 | 3 | $5.2 | | Thirteen Weeks Ended August 3, 2024 | 1 | $2.7 | | Twenty-Six Weeks Ended August 2, 2025 | 8 | $8.5 | | Twenty-Six Weeks Ended August 3, 2024 | 3 | $4.7 | [Interest Expense](index=24&type=section&id=Interest%20Expense) Describes the components of interest expense, including regular interest on debt facilities and amortization of deferred loan costs - Interest expense includes regular interest on the Term Loan, Notes, and ABL Facility, along with amortization of deferred loan costs and original issuance discounts[99](index=99&type=chunk) [Income Tax Expense](index=24&type=section&id=Income%20Tax%20Expense) Explains the primary drivers of fluctuations in income tax expense, mainly changes in income before taxes and equity awards - Income tax expense fluctuates primarily due to changes in income before income taxes and equity awards activity[100](index=100&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Presents a comparative analysis of financial performance for the thirteen and twenty-six week periods, detailing key revenue and expense changes [Thirteen Weeks Ended August 2, 2025 Compared to Thirteen Weeks Ended August 3, 2024](index=25&type=section&id=Thirteen%20Weeks%20Ended%20August%202%2C%202025%20Compared%20to%20Thirteen%20Weeks%20Ended%20August%203%2C%202024) Compares financial results for the thirteen-week periods, highlighting changes in net sales, gross margin, SG&A, operating income, and net income | Metric | August 2, 2025 (in thousands) | August 3, 2024 (in thousands) | Change (Dollars) | Change (Percent) | | :-------------------------------- | :------------------------------ | :------------------------------ | :--------------- | :--------------- | | Net sales | $1,599,838 | $1,548,980 | $50,858 | 3.3% | | Gross margin | $576,733 | $558,725 | $18,008 | 3.2% | | Selling, general and administrative expenses | $404,352 | $368,639 | $35,713 | 9.7% | | Operating income | $172,381 | $190,086 | $(17,705) | (9.3)% | | Net income | $125,434 | $142,588 | $(17,154) | (12.0)% | - Net sales increased by **3.3%** to **$1,599.8 million**, driven by growth across all merchandise divisions (apparel **+3.7%**, footwear **+3.6%**, sports and recreation **+3.5%**, outdoor **+2.5%**). New stores contributed **$60.8 million** in net sales[102](index=102&type=chunk)[103](index=103&type=chunk) - Comparable sales increased by **0.2%**, primarily due to a **1.5%** increase in average ticket, partially offset by a **1.4%** decrease in comparable transactions. E-commerce net sales grew to **10.9%** of merchandise sales from **9.7%** in the prior year[104](index=104&type=chunk) - SG&A expenses increased by **9.7%** to **$404.4 million**, mainly due to **$26.8 million** in increased strategic investments in new stores and technology[106](index=106&type=chunk) [Twenty-Six Weeks Ended August 2, 2025 Compared to Twenty-Six Weeks Ended August 3, 2024](index=26&type=section&id=Twenty-Six%20Weeks%20Ended%20August%202%2C%202025%20Compared%20to%20Twenty-Six%20Weeks%20Ended%20August%203%2C%202024) Compares financial results for the twenty-six-week periods, detailing changes in net sales, gross margin, SG&A, operating income, and net income | Metric | August 2, 2025 (in thousands) | August 3, 2024 (in thousands) | Change (Dollars) | Change (Percent) | | :-------------------------------- | :------------------------------ | :------------------------------ | :--------------- | :--------------- | | Net sales | $2,951,247 | $2,913,200 | $38,047 | 1.3% | | Gross margin | $1,035,602 | $1,014,519 | $21,083 | 2.1% | | Selling, general and administrative expenses | $793,956 | $722,050 | $71,906 | 10.0% | | Operating income | $241,646 | $292,469 | $(50,823) | (17.4)% | | Net income | $171,518 | $219,053 | $(47,535) | (21.7)% | - Net sales increased by **1.3%** to **$2,951.2 million**, driven by growth in footwear (**+1.9%**), apparel (**+1.9%**), sports and recreation (**+1.3%**), and outdoor (**+0.6%**). New stores contributed **$103.8 million** in net sales[110](index=110&type=chunk)[111](index=111&type=chunk) - Comparable sales decreased by **1.7%**, primarily due to a **3.1%** decrease in comparable transactions, partially offset by a **1.5%** increase in average ticket. E-commerce net sales increased to **10.5%** of merchandise sales from **9.4%** in the prior year[112](index=112&type=chunk) - Gross margin as a percentage of net sales increased by **30 basis points** to **35.1%**, primarily due to **50 basis points** of favorability in merchandise margin, partially offset by **20 basis points** of unfavorability from increased shrink and e-commerce shipping[113](index=113&type=chunk) - SG&A expenses increased by **10.0%** to **$794.0 million**, mainly due to **$60.2 million** in increased strategic investments in new stores, technology, and the Jordan Brand launch[114](index=114&type=chunk) [Non-GAAP Measures](index=27&type=section&id=Non-GAAP%20Measures) Discusses the use of non-GAAP financial measures like Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted EPS, and Adjusted Free Cash Flow for performance evaluation - Management uses Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share, and Adjusted Free Cash Flow as supplemental non-GAAP measures to evaluate business strategies, make budgeting decisions, and compare performance, excluding items not indicative of core operating performance[118](index=118&type=chunk)[119](index=119&type=chunk) [Adjusted EBITDA and Adjusted EBIT](index=29&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EBIT) Presents adjusted EBITDA and EBIT, providing a clearer view of core operating performance by excluding certain non-recurring or non-cash items | Metric | Thirteen Weeks Ended August 2, 2025 (in thousands) | Thirteen Weeks Ended August 3, 2024 (in thousands) | Twenty-Six Weeks Ended August 2, 2025 (in thousands) | Twenty-Six Weeks Ended August 3, 2024 (in thousands) | | :---------------- | :------------------------------------------------- | :------------------------------------------------- | :-------------------------------------------------- | :-------------------------------------------------- | | Net income | $125,434 | $142,588 | $171,518 | $219,053 | | Adjusted EBITDA | $212,484 | $232,490 | $322,248 | $375,068 | | Adjusted EBIT | $181,463 | $203,572 | $261,077 | $317,297 | - Adjusted EBITDA decreased by **8.6%** to **$212.5 million** for the thirteen weeks ended August 2, 2025, and by **14.0%** to **$322.2 million** for the twenty-six weeks ended August 2, 2025, compared to the prior year periods[123](index=123&type=chunk) [Adjusted Net Income and Adjusted Earnings per Share](index=29&type=section&id=Adjusted%20Net%20Income%20and%20Adjusted%20Earnings%20per%20Share) Details adjusted net income and adjusted earnings per share, offering a normalized view of profitability by excluding specific adjustments | Metric | Thirteen Weeks Ended August 2, 2025 | Thirteen Weeks Ended August 3, 2024 | Twenty-Six Weeks Ended August 2, 2025 | Twenty-Six Weeks Ended August 3, 2024 | | :-------------------------------- | :---------------------------------- | :---------------------------------- | :------------------------------------ | :------------------------------------ | | Net income (in thousands) | $125,434 | $142,588 | $171,518 | $219,053 | | Adjusted Net Income (in thousands) | $131,319 | $148,642 | $182,917 | $230,262 | | Adjusted Earnings per Share: Basic | $1.97 | $2.07 | $2.74 | $3.16 | | Adjusted Earnings per Share: Diluted | $1.94 | $2.03 | $2.69 | $3.08 | - Diluted Adjusted Earnings per Share decreased from **$2.03** to **$1.94** for the thirteen weeks ended August 2, 2025, and from **$3.08** to **$2.69** for the twenty-six weeks ended August 2, 2025, compared to the prior year periods[124](index=124&type=chunk) [Adjusted Free Cash Flow](index=30&type=section&id=Adjusted%20Free%20Cash%20Flow) Reports adjusted free cash flow, indicating the cash generated from operations after accounting for capital expenditures | Metric | Thirteen Weeks Ended August 2, 2025 (in thousands) | Thirteen Weeks Ended August 3, 2024 (in thousands) | Twenty-Six Weeks Ended August 2, 2025 (in thousands) | Twenty-Six Weeks Ended August 3, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------------- | :------------------------------------------------- | :-------------------------------------------------- | :-------------------------------------------------- | | Net cash provided by operating activities | $78,575 | $91,346 | $236,047 | $291,023 | | Net cash used in investing activities | $(56,911) | $(41,384) | $(107,899) | $(73,739) | | Adjusted Free Cash Flow | $21,664 | $49,962 | $128,148 | $217,284 | - Adjusted Free Cash Flow decreased by **56.6%** to **$21.7 million** for the thirteen weeks ended August 2, 2025, and by **41.1%** to **$128.1 million** for the twenty-six weeks ended August 2, 2025, compared to the prior year periods[126](index=126&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) Examines the company's ability to meet short-term and long-term financial obligations, including sources and uses of cash and debt structure [Sources and Uses of Liquidity](index=30&type=section&id=Sources%20and%20Uses%20of%20Liquidity) Identifies the primary liquidity requirements and funding sources, including cash, operating activities, and debt facilities - The Company's primary liquidity requirements are for working capital, capital expenditures, debt obligations, interest expense, dividends, and common stock repurchases. These are funded by cash and cash equivalents, operating activities, debt issuances, and ABL Facility borrowings[127](index=127&type=chunk) - As of August 2, 2025, cash and cash equivalents totaled **$300.9 million**. Management believes current liquidity, including ABL Facility availability, is sufficient for the next 12 months and foreseeable future[127](index=127&type=chunk) [Long-Term Debt](index=30&type=section&id=Long-Term%20Debt) Details the company's long-term debt structure, including fixed and variable rate notes, term loans, and the ABL facility - As of August 2, 2025, the Company's long-term debt included **$400 million** in **6.00%** fixed-rate senior secured Notes due November 2027, and an **$87.3 million 8.19%** variable-rate Term Loan due November 2027[130](index=130&type=chunk) - The ABL Facility has a **$1.0 billion** commitment with no principal outstanding as of August 2, 2025, maturing March 8, 2029, and an available borrowing capacity of **$990.9 million**[130](index=130&type=chunk)[131](index=131&type=chunk) | Fiscal Year | Term Loan and related interest (in thousands) | Notes and related interest (in thousands) | ABL Facility and related interest (in thousands) | | :---------- | :------------------------------------------ | :---------------------------------------- | :--------------------------------------------- | | 2025 | $4,691 | $12,000 | $1,243 | | 2026 | $9,159 | $24,000 | $2,500 | | 2027 | $87,725 | $424,000 | $2,500 | | 2028 | — | — | $2,500 | | 2029 | — | — | $268 | | Total | $101,575 | $460,000 | $9,011 | [Leases](index=31&type=section&id=Leases) Outlines the company's operating lease obligations for store locations, distribution centers, office space, and equipment | Fiscal Year | Operating Lease Payments (in thousands) | | :---------- | :-------------------------------------- | | 2025 | $103,999 | | 2026 | $251,562 | | 2027 | $239,231 | | 2028 | $222,069 | | 2029 | $205,355 | | After 2029 | $1,130,983 | | Total | $2,153,199 | - The Company predominantly leases store locations, distribution centers, office space, and equipment under operating leases expiring between fiscal years 2024 and 2044, with total remaining obligations of **$2,153.2 million** as of August 2, 2025[132](index=132&type=chunk) [Share Repurchases](index=31&type=section&id=Share%20Repurchases) Details the company's share repurchase programs, including authorized amounts, shares purchased, and remaining availability - The Company's Board of Directors approved a new share repurchase program on December 4, 2024, authorizing up to **$700 million** in repurchases over three years. As of August 2, 2025, **$536.5 million** remained available[134](index=134&type=chunk) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Amount Repurchased (in thousands) | | :-------------------------------- | :------------------------------- | :--------------------------- | :-------------------------------------- | | First Quarter (Feb 2, 2025 to May 3, 2025) | 2,080,772 | $47.59 | $99,031 | | Second Quarter (May 4, 2025 to Aug 2, 2025) | — | — | — | | Total Share Repurchase Activity | 2,080,772 | $47.59 | $99,031 | [Dividends](index=32&type=section&id=Dividends) Reports quarterly cash dividends declared and paid, including the per-share amount and payment dates | Quarter | Dividend per Share | Total Dividends Paid (in thousands) | Stockholder Date of Record | | :-------------------------------- | :----------------- | :---------------------------------- | :------------------------- | | First Quarter (Feb 2, 2025 to May 3, 2025) | $0.13 | $8,716 | March 25, 2025 | | Second Quarter (May 4, 2025 to Aug 2, 2025) | $0.13 | $8,649 | June 19, 2025 | | Total Dividends Paid | | $17,365 | | - On August 28, 2025, the Board of Directors declared a quarterly cash dividend of **$0.13 per share** for the fiscal quarter ended August 2, 2025, payable on October 9, 2025[136](index=136&type=chunk) [Capital Expenditures](index=32&type=section&id=Capital%20Expenditures) Breaks down capital expenditures by category, including new stores, corporate, e-commerce, IT, and existing store updates, along with future forecasts | Category | Twenty-Six Weeks Ended August 2, 2025 (in thousands) | Twenty-Six Weeks Ended August 3, 2024 (in thousands) | | :------------------------------------------ | :------------------------------------------------- | :------------------------------------------------- | | New stores | $49,368 | $37,504 | | Corporate, e-commerce and information technology programs | $20,522 | $21,115 | | Existing stores, distribution centers and other | $37,686 | $14,806 | | Total capital expenditures | $107,576 | $73,425 | - Total capital expenditures increased by **$34.2 million** to **$107.6 million** for the twenty-six weeks ended August 2, 2025, primarily driven by increased spending on new stores and updates for existing stores and distribution centers[137](index=137&type=chunk)[139](index=139&type=chunk) - Forecasted capital expenditures for fiscal year 2025 are between **$180 million** and **$220 million**, with **60%** allocated to new stores, **20%** to corporate, e-commerce, and IT programs, and **20%** to existing stores, distribution centers, and other[137](index=137&type=chunk) [Cash Flows for the Twenty-Six Weeks Ended August 2, 2025 and August 3, 2024](index=33&type=section&id=Cash%20Flows%20for%20the%20Twenty-Six%20Weeks%20Ended%20August%202%2C%202025%20and%20August%203%2C%202024) Analyzes cash flow activities for the twenty-six-week periods, detailing changes in operating, investing, and financing cash flows | Cash Flow Activity | Twenty-Six Weeks Ended August 2, 2025 (in thousands) | Twenty-Six Weeks Ended August 3, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------------- | :------------------------------------------------- | | Net cash provided by operating activities | $236,047 | $291,023 | | Net cash used in investing activities | $(107,899) | $(73,739) | | Net cash used in financing activities | $(116,217) | $(240,636) | | Net increase (decrease) in cash and cash equivalents | $11,931 | $(23,352) | - Cash provided by operating activities decreased by **$55.0 million**, primarily due to a **$47.5 million** decrease in net income and a **$42.3 million** net decrease in cash flows from operating assets and liabilities, partially offset by a **$34.8 million** net increase in non-cash charges[139](index=139&type=chunk) - Cash used in financing activities decreased by **$124.4 million**, mainly driven by a **$121.3 million** decrease in cash outflows for common stock repurchases[139](index=139&type=chunk) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Highlights key accounting policies and estimates requiring significant management judgment, such as inventory valuation and asset impairment - The preparation of financial statements requires management to make significant estimates and assumptions, particularly concerning the valuation of merchandise inventories and impairment analyses for goodwill, intangible, and long-lived assets[140](index=140&type=chunk)[142](index=142&type=chunk) [Recent Accounting Pronouncements](index=34&type=section&id=Recent%20Accounting%20Pronouncements) Discusses the impact of recently enacted accounting pronouncements, specifically the One Big Beautiful Bill Act, on tax expense - The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, is expected to materially decrease current tax expense and increase deferred tax expense for fiscal year ending January 31, 2026, with no net impact on the effective tax rate[144](index=144&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Confirms no material changes in the company's primary risk exposures or market risk management since the Annual Report - No material changes in primary risk exposures or market risk management have occurred since the Annual Report[145](index=145&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Details the evaluation of disclosure controls and procedures, confirming no material changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=34&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Reports management's conclusion on the effectiveness of the company's disclosure controls and procedures at a reasonable assurance level - Management, with CEO and CFO participation, concluded that the Company's disclosure controls and procedures were effective at a reasonable assurance level as of the end of the reporting period[146](index=146&type=chunk) [Changes in Internal Control over Financial Reporting](index=34&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Confirms that no material changes in internal control over financial reporting occurred during the reporting period - No changes in internal control over financial reporting occurred during the period that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[147](index=147&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) Confirms no material developments in legal proceedings during the quarter, with no expected adverse financial impact - No material developments in legal proceedings occurred during the fiscal quarter ended August 2, 2025[150](index=150&type=chunk) - The Company is not currently party to any legal proceedings believed to have a material adverse effect on its financial position, results of operations, or cash flows[150](index=150&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) Refers to risk factors in the Annual Report, confirming no material changes to those previously disclosed - No material changes to the risk factors discussed in the Annual Report have occurred[151](index=151&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds to report[152](index=152&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms no defaults upon senior securities occurred during the reporting period - No defaults upon senior securities to report[153](index=153&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[154](index=154&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) Reports no director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended August 2, 2025[155](index=155&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents, compensation policy, and certifications - The report includes exhibits such as the Restated Certificate of Incorporation, Amended and Restated Bylaws, Non-Employee Director Compensation Policy, and various certifications (CEO, CFO under Sarbanes-Oxley Act)[156](index=156&type=chunk) [SIGNATURES](index=38&type=section&id=SIGNATURES)

Financial Data and Key Metrics Changes - Net sales for Q2 were approximately $1.6 billion, up 3.3% year-over-year, with a comparable sales increase of 0.2% [24][26] - Gross margin was 36%, down 2 basis points from the previous year, while merchandise margin improved by 40 basis points [26][28] - Operating income was $172 million, and diluted earnings per share were $1.85, with adjusted earnings per share at $1.94 [27][28] - Inventory per store increased, with units per store up 4.6% and dollars per store up 8.2% [28] Business Line Data and Key Metrics Changes - The e-commerce channel saw a positive comparable sales increase of approximately 18% during Q2, building on a 10% increase in Q1 [24][10] - Performance across major business categories was consistent, with footwear, apparel, sports and recreation, and outdoor all showing low single-digit increases [10][11] - Seasonal categories like swim and summer footwear experienced a slow start but rebounded in late June and July [11] Market Data and Key Metrics Changes - Strong double-digit growth in foot traffic was observed among customers in the top two income quintiles (households making over $100,000) [12][13] - Traffic share remained flat among middle-income consumers (households making $50,000 to $100,000), while there was erosion in lower-income cohorts (households making less than $50,000) [12][13] - Market share data indicated meaningful gains across key businesses such as apparel, footwear, and sporting goods [13] Company Strategy and Development Direction - The primary growth strategy involves opening new stores, with three new locations opened in Q2, bringing the total to 306 stores across 21 states [15] - The company aims to grow its e-commerce business by improving site navigation, order fulfillment, and expanding product assortment [16][18] - Initiatives to enhance store productivity include adding desirable brands and implementing new technology like RFID scanners [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of inflation on consumer behavior, noting a trade-down effect among lower-income consumers [12][13] - The company remains optimistic about future performance, citing positive momentum and the effectiveness of strategic initiatives [30][31] - Management is closely monitoring tariff impacts and has implemented strategies to mitigate these effects [23][46] Other Important Information - The company has maintained strong liquidity with $300 million in cash and an undrawn $1 billion revolver [28] - Capital allocation remains disciplined, with investments in inventory, dividends, and strategic initiatives totaling approximately $148.7 million in Q2 [29] Q&A Session Summary Question: Insights on consumer behavior post back-to-school period - Management noted episodic shopping patterns and expressed optimism about momentum continuing into the remainder of the quarter [34][35] Question: Impact of tariff pricing on average ticket - Average unit retails (AURs) were up low to mid-single digits, with expectations for further price adjustments in the back half of the year [36][37] Question: Guidance on SG&A and operating leverage - Management indicated expectations for continued moderation of SG&A deleverage, with a focus on maintaining investment in growth initiatives [41][42] Question: Promotional environment and merchandise margin - The promotional environment remains competitive, with higher take rates observed during promotional events [84] Question: Performance of higher-income consumers - The top two income quintiles showed double-digit growth in traffic, offsetting declines in lower-income segments [86][87] Question: Expansion of Nike and Jordan assortments - The company has significantly expanded its Jordan brand assortment and is seeing strong performance from both Nike and Jordan products [92][100]

Financial Data and Key Metrics Changes - Net sales for Q2 2025 were approximately $1.6 billion, up 3.3% year-over-year, with a comparable sales increase of 0.2% [5][18] - Gross margin was 36%, down two basis points from the previous year, while merchandise margin improved by 40 basis points [19][20] - Operating income was $172 million, and diluted earnings per share was $1.85, with adjusted earnings per share at $1.94 [19][20] Business Line Data and Key Metrics Changes - The dot-com business grew approximately 18% during Q2, contributing positively to overall sales [5][18] - Performance across major categories was consistent, with low single-digit increases in footwear, apparel, sports and recreation, and outdoor categories [6][10] - Seasonal categories like swim and summer footwear experienced a slow start but rebounded in late June and July [6][10] Market Data and Key Metrics Changes - Strong double-digit growth in foot traffic was observed among consumers in the top two income quintiles (households making over $100,000) [8][9] - Traffic share remained flat in the middle-income segment ($50,000 to $100,000), while there was erosion in the lower-income cohort (under $50,000), though at a slower pace than in Q1 [9][10] Company Strategy and Development Direction - The company’s primary growth strategy includes opening new stores, with three new locations opened in Q2, bringing the total to 306 stores [10][11] - Focus on enhancing the dot-com business through improved site navigation, order fulfillment, and expanded product assortment [12][15] - Initiatives to improve existing store productivity include adding popular brands and implementing new technology like RFID handheld scanners [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business momentum, particularly in light of positive comp sales and market share gains [10][23] - The company is closely monitoring consumer behavior in response to inflation and pricing adjustments, with a focus on maintaining a strong value proposition [8][32] - Future guidance indicates a tightening of the low end of comp sales expectations, now ranging from negative 3% to positive 1% for the year [22][23] Other Important Information - The company has taken measures to mitigate tariff impacts, including adjusting unit buys and optimizing pricing strategies [17][39] - Inventory levels are expected to normalize as the year progresses, with a current elevated inventory per store [20][22] Q&A Session Summary Question: Insights on consumer behavior post back-to-school period - Management noted continued episodic shopping patterns, with positive comps during back-to-school but a slight pullback afterward attributed to less clearance activity [26][27] Question: Impact of tariff pricing on average ticket - Average unit retails (AURs) were up low to mid-single digits, with expectations for further price adjustments in the back half of the year [29][30] Question: Guidance on SG&A and operating leverage - SG&A is expected to deleverage by approximately 100 basis points for the full year, with continued investments in growth initiatives [35][36] Question: Promotional environment and merchandise margin - The promotional environment remains competitive, with higher take rates on promotions, but merchandise margin has not significantly benefited from product mix changes [73][74] Question: Performance of higher-income consumers - The top two income quintiles showed double-digit traffic growth, which is expected to continue driving comp growth [75][76] Question: Expansion of Nike and Jordan assortments - The company has significantly expanded its Jordan assortment since launch, with plans for further expansion in the coming year [80][86]

Financial Data and Key Metrics Changes - Net sales for Q2 2025 were approximately $1.6 billion, an increase of 3.3% year-over-year, with a comparable sales increase of 0.2% [7][23] - Gross margin was 36%, down 2 basis points from the previous year, while merchandise margin improved by 40 basis points [24][10] - Operating income was $172 million, and diluted earnings per share were $1.85, with adjusted earnings per share at $1.94 [25][26] Business Line Data and Key Metrics Changes - The e-commerce channel saw a positive comparable sales increase of approximately 18% during Q2, building on a 10% increase in Q1 [8][23] - Performance across major categories was consistent, with footwear, apparel, sports and recreation, and outdoor categories all showing low single-digit increases [8][10] - Seasonal categories like swim and summer footwear experienced a slow start but rebounded in late June and July [9][10] Market Data and Key Metrics Changes - Strong double-digit growth in foot traffic was observed among consumers in the top two income quintiles (households earning over $100,000) [12] - Traffic share remained flat among middle-income consumers (households earning $50,000 to $100,000), while there was erosion in lower-income cohorts (households earning less than $50,000) [12][13] - Market share gains were noted across key businesses such as apparel, footwear, sporting goods, fishing, and outdoor cooking [12][13] Company Strategy and Development Direction - The company’s primary growth strategy includes opening new stores, with three new locations opened in Q2, bringing the total to 306 stores across 21 states [14] - The focus on enhancing the e-commerce business includes streamlining site navigation, improving order fulfillment, and expanding product assortment [15][20] - Initiatives to improve existing store productivity include adding desirable brands and implementing new technology like RFID scanners [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of inflation on consumer behavior, noting a trade-down effect where consumers are seeking value [11][12] - The company remains optimistic about the momentum in the business, expecting continued positive trends in sales and market share [28][29] - Management is confident in their strategies to mitigate tariff impacts and maintain a strong value proposition for customers [22][46] Other Important Information - The company ended the quarter with $300 million in cash and maintained strong liquidity with an undrawn $1 billion revolver [26] - Free cash flow for Q2 was $21.7 million, with significant investments made in inventory and strategic initiatives [27] - The company has over $530 million remaining on its current share repurchase authorization [28] Q&A Session Summary Question: Insights on consumer behavior post back-to-school period - Management noted episodic shopping patterns and expressed optimism about momentum continuing into the remainder of the year despite a slight pullback after back-to-school [31][33] Question: Impact of tariff pricing on average ticket - Average unit retails (AURs) were up low to mid-single digits, with expectations for further price adjustments in the back half of the year [35][36] Question: Guidance on SG&A and operating leverage - Management indicated a commitment to disciplined spending, with expectations for SG&A deleverage to moderate in the back half of the year [40][50] Question: Promotional environment and merchandise margin - The promotional environment remains competitive, with higher take rates observed during promotional events, while merchandise margins are expected to benefit from a favorable mix [79][80] Question: Performance of higher income consumer segments - The top two income quintiles showed double-digit growth in traffic, which is expected to continue driving comp growth [81][83] Question: Expansion of Nike and Jordan assortments - The company has significantly expanded its Jordan brand assortment and is seeing strong performance from both Nike and Jordan products [87][90]

Financial Performance - Academy Sports and Outdoors, Inc. reported quarterly earnings of $1.94 per share, missing the Zacks Consensus Estimate of $2.12 per share, and down from $2.03 per share a year ago, representing an earnings surprise of -8.49% [1] - The company posted revenues of $1.6 billion for the quarter ended July 2025, missing the Zacks Consensus Estimate by 0.67%, and up from $1.55 billion year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once and topped consensus revenue estimates only once [2] Stock Performance - Academy Sports and Outdoors shares have lost about 6.9% since the beginning of the year, while the S&P 500 has gained 9.8% [3] - The current status translates into a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $1.08 on revenues of $1.39 billion, and for the current fiscal year, it is $5.83 on revenues of $6.1 billion [7] - The estimate revisions trend for Academy Sports and Outdoors was unfavorable ahead of the earnings release, which may impact future stock movements [5][6] Industry Context - The Leisure and Recreation Products industry, to which Academy Sports and Outdoors belongs, is currently in the bottom 30% of the Zacks Industry Rank, indicating potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can materially impact stock performance [5][8]

Q2 FY25 Financial Performance - Net sales reached $16 billion, a 33% year-over-year increase[30] - Comparable sales increased by 02% marking the first positive quarterly comp since 2021[30,32] - Gross margin was 360%[30] - GAAP EPS was $185, while adjusted EPS was $194[30] Fiscal Year 2025 Guidance - Net sales guidance is revised to a range of negative 30% to positive 10%, translating to $60 billion to $6265 billion[40,41] - GAAP net income is projected between $360 million and $410 million[41] - Adjusted net income is expected to be between $380 million and $430 million[41] - Adjusted free cash flow is estimated to be between $250 million and $320 million[41] Strategic Growth Initiatives - The company opened 3 new stores in Q2 2025 and plans to open an additional 11 stores in Q3[13] - ASO aims to expand its store base by 50%+ in existing and new markets[11] - New store targets include year-one sales of $12 million - $16 million with a spend of $4 million - $5 million per store in FY25 and a targeted ROIC of 20%+[15]

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Second Quarter Fiscal 2025 Highlights](index=1&type=section&id=Second%20Quarter%20Fiscal%202025%20Highlights) Academy Sports + Outdoors reported positive sales growth and comparable sales in Q2 FY25, driven by strategic initiatives and customer value proposition, leading to an updated full-year guidance - Sales increased **3.3%** and comparable sales increased **0.2%** in the second quarter[1](index=1&type=chunk) - eCommerce sales saw a significant increase of **17.7%**[1](index=1&type=chunk) - Diluted GAAP EPS for the second quarter was **$1.85**[1](index=1&type=chunk) - The company opened **three new stores** during the quarter[1](index=1&type=chunk) - CEO Steve Lawrence noted that sales inflected to a positive comparable, driven by steady improvements from strategic initiatives and a resonating value proposition, leading to market share gains[2](index=2&type=chunk) - CFO Carl Ford highlighted improved Q2 sales, acceleration in strategic initiatives, and better visibility into tariff impacts, which led to narrowing the low end of the sales guidance range[11](index=11&type=chunk) [Financial Results](index=1&type=section&id=Financial%20Results) [Second Quarter Operating Results](index=1&type=section&id=Second%20Quarter%20Operating%20Results) For the thirteen weeks ended August 2, 2025, Academy Sports + Outdoors reported a 3.3% increase in net sales and a positive comparable sales growth of 0.2%, though net income and diluted GAAP EPS declined Second Quarter Operating Results | Metric | August 2, 2025 | August 3, 2024 | Change (%) | | :-------------------------------- | :------------- | :------------- | :--------- | | Net sales (in millions) | $1,599.8 | $1,549.0 | 3.3% | | Comparable sales | 0.2% | (6.9)% | - | | Income before income tax (in millions) | $164.8 | $186.5 | (11.6)% | | Net income (in millions) | $125.4 | $142.6 | (12.1)% | | Diluted GAAP EPS | $1.85 | $1.95 | (5.1)% | | Adjusted diluted EPS | $1.94 | $2.03 | (4.4)% | - Gross margin for Q2 FY25 was **36.0%**, a slight decrease from **36.1%** in Q2 FY24[22](index=22&type=chunk) - Selling, general and administrative expenses increased to **25.3%** of sales in Q2 FY25, up from **23.8%** in Q2 FY24[22](index=22&type=chunk) [Year-to-Date Operating Results](index=1&type=section&id=Year-to-Date%20Operating%20Results) For the twenty-six weeks ended August 2, 2025, net sales increased by 1.3%, but comparable sales remained negative at (1.7)%, with net income and diluted GAAP EPS experiencing more significant declines Year-to-Date Operating Results | Metric | August 2, 2025 | August 3, 2024 | Change (%) | | :-------------------------------- | :------------- | :------------- | :--------- | | Net sales (in millions) | $2,951.2 | $2,913.2 | 1.3% | | Comparable sales | (1.7)% | (6.4)% | - | | Income before income tax (in millions) | $227.9 | $284.2 | (19.8)% | | Net income (in millions) | $171.5 | $219.1 | (21.7)% | | Diluted GAAP EPS | $2.52 | $2.93 | (14.0)% | | Adjusted diluted EPS | $2.69 | $3.08 | (12.7)% | - Gross margin for YTD FY25 was **35.1%**, an increase from **34.8%** in YTD FY24[24](index=24&type=chunk) - Selling, general and administrative expenses increased to **26.9%** of sales in YTD FY25, up from **24.8%** in YTD FY24[24](index=24&type=chunk) [Balance Sheet Overview](index=3&type=section&id=Balance%20Sheet%20Overview) As of August 2, 2025, the company's cash and cash equivalents decreased, while merchandise inventories significantly increased, and long-term debt remained relatively stable Balance Sheet Highlights | Metric (in millions) | August 2, 2025 | August 3, 2024 | Change (%) | | :------------------- | :------------- | :------------- | :--------- | | Cash and cash equivalents | $300.9 | $324.6 | (7.3)% | | Merchandise inventories, net | $1,587.6 | $1,366.6 | 16.2% | | Long-term debt, net | $481.7 | $483.6 | (0.4)% | - Inventory per store was up **4.5%** in units and **8.2%** in dollars as of August 2, 2025[5](index=5&type=chunk) - Total assets increased to **$5,275.983 million** as of August 2, 2025, from **$4,874.358 million** as of August 3, 2024[26](index=26&type=chunk) [Capital Allocation](index=3&type=section&id=Capital%20Allocation) The company significantly reduced share repurchases year-over-year while increasing dividends paid, and declared a quarterly cash dividend of $0.13 per share subsequent to the quarter end Year-to-Date Capital Allocation | Metric (in millions) | August 2, 2025 (YTD) | August 3, 2024 (YTD) | Change (%) | | :------------------- | :------------------- | :------------------- | :--------- | | Share repurchases | $99.9 | $222.3 | (55.1)% | | Dividends paid | $17.4 | $16.1 | 8.1% | - Subsequent to the end of the second quarter, a quarterly cash dividend of **$0.13 per share** of common stock was declared on August 28, 2025, payable on October 9, 2025[6](index=6&type=chunk) [Operational Updates](index=3&type=section&id=Operational%20Updates) [New Store Openings and Footprint](index=3&type=section&id=New%20Store%20Openings%20and%20Footprint) Academy opened three new stores in Q2 FY25, bringing the total to 306 locations across 21 states, with plans to open 20 to 25 new stores in fiscal 2025 - Three new stores were opened during the second quarter in Florida, Virginia, and West Virginia[1](index=1&type=chunk)[7](index=7&type=chunk) - The total store count reached **306 locations** across **21 states**[7](index=7&type=chunk) - The company plans to open a total of **20 to 25 stores** in fiscal 2025[7](index=7&type=chunk) Academy Store Footprint Update | Time Frame | Stores at beginning of the period | Number of stores opened during the period | Number of stores closed during the period | Total stores open at end of period | Total gross square feet at the end of period (thousands) | | :--------- | :-------------------------------- | :---------------------------------------- | :---------------------------------------- | :--------------------------------- | :------------------------------------------------------- | | FY 2024 | 282 | 16 | — | 298 | 20,604 | | 1st Quarter 2025 | 298 | 5 | — | 303 | 20,879 | | 2nd Quarter 2025 | 303 | 3 | — | 306 | 21,070 | [Tariff Mitigation Actions](index=3&type=section&id=Tariff%20Mitigation%20Actions) The company believes it has largely offset the impact of current incremental tariffs for fiscal 2025 through various tactics, including vendor partnerships, country of origin shifts, and pricing optimization - The Company believes it has mostly offset the impact of the current incremental tariffs on its business for fiscal 2025[9](index=9&type=chunk) - Tactics deployed include partnering with factories and vendors to absorb a portion of the incremental expense[10](index=10&type=chunk) - Other strategies involve working with overseas partners to shift country of origin, adjusting unit buys, pulling in additional inventory from domestic warehouses, and utilizing pricing optimization tools to drive higher Average Unit Retails (AUR's)[10](index=10&type=chunk) [Fiscal 2025 Outlook](index=5&type=section&id=Fiscal%202025%20Outlook) [Updated Fiscal 2025 Guidance](index=5&type=section&id=Updated%20Fiscal%202025%20Guidance) Academy updated its fiscal 2025 guidance, narrowing the low end of its net sales and comparable sales forecasts while maintaining the high end, and raising the low end of GAAP and Adjusted EPS guidance Updated Fiscal 2025 Guidance | Metric (in millions, except per share) | Previous Low | Previous High | Updated Low | Updated High | | :----------------------------------- | :----------- | :------------ | :---------- | :----------- | | Net sales | $5,970 | $6,265 | $6,000 | $6,265 | | Comparable sales | (4.0)% | 1.0% | (3.0)% | 1.0% | | Gross margin rate | 34.0% | 34.5% | 34.0% | 34.5% | | GAAP net income | $350 | $410 | $360 | $410 | | Adjusted net income | $375 | $435 | $380 | $430 | | GAAP diluted EPS | $5.10 | $5.90 | $5.30 | $6.00 | | Adjusted diluted EPS | $5.45 | $6.25 | $5.60 | $6.30 | | Diluted weighted average common shares | ~69 | ~69 | ~68 | ~68 | | Capital Expenditures | $180 | $220 | $180 | $220 | | Adjusted free cash flow | $250 | $320 | $250 | $320 | - The company expects the tax rate for fiscal 2025 to be **23.5%**[11](index=11&type=chunk) [Company Information & Disclosures](index=5&type=section&id=Company%20Information%20%26%20Disclosures) [About Academy Sports + Outdoors](index=5&type=section&id=About%20Academy%20Sports%20%2B%20Outdoors) Academy Sports + Outdoors is a leading full-line sporting goods and outdoor recreation retailer in the U.S., operating over 300 stores across 21 states with a localized merchandising strategy - Academy is a leading full-line sporting goods and outdoor recreation retailer in the United States[15](index=15&type=chunk) - Originally founded in 1938 as a family business in Texas, it has grown to more than **300 stores** across **21 states**[15](index=15&type=chunk) - The company's mission is to provide 'Fun for All' through a localized merchandising strategy and value proposition, with product assortment focusing on outdoor, apparel, sports & recreation, and footwear[15](index=15&type=chunk) [Non-GAAP Measures Explanation](index=6&type=section&id=Non-GAAP%20Measures%20Explanation) The report includes non-GAAP financial measures like Adjusted EBITDA and Adjusted EPS to provide additional insights into financial performance by excluding certain items that affect comparability, used for business planning and evaluation - Non-GAAP measures (Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Common Share, and Adjusted Free Cash Flow) are presented as supplemental measures not required by GAAP[16](index=16&type=chunk) - These measures are useful to investors as they provide additional information on comparisons between periods by excluding certain items that affect overall comparability[16](index=16&type=chunk) - The company uses these non-GAAP measures for business planning, understanding underlying trends, and measuring performance relative to market peers, emphasizing they should be considered in addition to, not as an alternative for, GAAP results[16](index=16&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) The press release contains forward-looking statements regarding fiscal 2025 outlook, tariff mitigation, strategic plans, growth, dividends, and share repurchases, which are subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are based on current expectations and are not guarantees of future performance[18](index=18&type=chunk) - These statements include the Company's fiscal 2025 outlook, tariff-mitigation actions, strategic plans, business growth, new store openings, dividends, and share repurchases[18](index=18&type=chunk) - Actual results may differ materially due to various risks, uncertainties, and changes in global, regional, or local economic, business, competitive, market, regulatory, and environmental factors, including macroeconomic challenges, inflation, interest rates, trade policy changes, and geopolitical tensions[18](index=18&type=chunk) [Investor and Media Contacts](index=6&type=section&id=Investor%20and%20Media%20Contacts) Contact information for investor relations and media inquiries is provided for stakeholders - Investor Contact: Dan Aldridge, VP, Investor Relations, 832-739-4102, dan.aldridge@academy.com[19](index=19&type=chunk)[20](index=20&type=chunk) - Media Contact: Meredith Klein, VP, Communications, 346-823-6615, meredith.klein@academy.com[19](index=19&type=chunk)[20](index=20&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Income (Thirteen Weeks Ended)](index=7&type=section&id=Consolidated%20Statements%20of%20Income%20(Thirteen%20Weeks%20Ended)) This section presents the unaudited consolidated statements of income for the thirteen weeks ended August 2, 2025, and August 3, 2024, detailing net sales, cost of goods sold, gross margin, operating expenses, and net income Consolidated Statements of Income (Thirteen Weeks Ended) | Metric (in thousands) | August 2, 2025 | % of Sales | August 3, 2024 | % of Sales | | :-------------------------------- | :------------- | :--------- | :------------- | :--------- | | Net sales | $1,599,838 | 100.0% | $1,548,980 | 100.0% | | Cost of goods sold | $1,023,105 | 64.0% | $990,255 | 63.9% | | Gross margin | $576,733 | 36.0% | $558,725 | 36.1% | | Selling, general and administrative expenses | $404,352 | 25.3% | $368,639 | 23.8% | | Operating income | $172,381 | 10.8% | $190,086 | 12.3% | | Income before income taxes | $164,833 | 10.3% | $186,546 | 12.0% | | Net income | $125,434 | 7.8% | $142,588 | 9.2% | | Diluted EPS | $1.85 | - | $1.95 | - | [Consolidated Statements of Income (Twenty-Six Weeks Ended)](index=8&type=section&id=Consolidated%20Statements%20of%20Income%20(Twenty-Six%20Weeks%20Ended)) This section provides the unaudited consolidated statements of income for the twenty-six weeks ended August 2, 2025, and August 3, 2024, showing year-to-date performance across key income statement metrics Consolidated Statements of Income (Twenty-Six Weeks Ended) | Metric (in thousands) | August 2, 2025 | % of Sales | August 3, 2024 | % of Sales | | :-------------------------------- | :------------- | :--------- | :------------- | :--------- | | Net sales | $2,951,247 | 100.0% | $2,913,200 | 100.0% | | Cost of goods sold | $1,915,645 | 64.9% | $1,898,681 | 65.2% | | Gross margin | $1,035,602 | 35.1% | $1,014,519 | 34.8% | | Selling, general and administrative expenses | $793,956 | 26.9% | $722,050 | 24.8% | | Operating income | $241,646 | 8.2% | $292,469 | 10.0% | | Income before income taxes | $227,861 | 7.7% | $284,198 | 9.8% | | Net income | $171,518 | 5.8% | $219,053 | 7.5% | | Diluted EPS | $2.52 | - | $2.93 | - | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) This section presents the unaudited consolidated balance sheets as of August 2, 2025, February 1, 2025, and August 3, 2024, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheets (Key Items, in thousands) | Metric | August 2, 2025 | February 1, 2025 | August 3, 2024 | | :--------------------------- | :------------- | :--------------- | :------------- | | Cash and cash equivalents | $300,860 | $288,929 | $324,568 | | Merchandise inventories, net | $1,587,624 | $1,308,840 | $1,366,616 | | Total current assets | $1,985,922 | $1,710,149 | $1,812,388 | | Total assets | $5,275,983 | $4,900,963 | $4,874,358 | | Total current liabilities | $1,212,008 | $960,881 | $1,091,275 | | Long-term debt, net | $481,738 | $482,679 | $483,617 | | Total liabilities | $3,200,833 | $2,896,928 | $2,921,964 | | Stockholders' equity | $2,075,150 | $2,004,035 | $1,952,394 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section provides the unaudited consolidated statements of cash flows for the twenty-six weeks ended August 2, 2025, and August 3, 2024, outlining cash flows from operating, investing, and financing activities Consolidated Statements of Cash Flows (Key Items, in thousands) | Metric | August 2, 2025 (YTD) | August 3, 2024 (YTD) | | :----------------------------------- | :------------------- | :------------------- | | Net cash provided by operating activities | $236,047 | $291,023 | | Net cash used in investing activities | $(107,899) | $(73,739) | | Net cash used in financing activities | $(116,217) | $(240,636) | | Net increase (decrease) in cash and cash equivalents | $11,931 | $(23,352) | | Cash and cash equivalents at end of period | $300,860 | $324,568 | - Capital expenditures increased to **$107,576 thousand** in YTD FY25 from **$73,425 thousand** in YTD FY24[28](index=28&type=chunk) - Repurchase of common stock for retirement decreased significantly to **$99,031 thousand** in YTD FY25 from **$220,325 thousand** in YTD FY24[28](index=28&type=chunk) [Reconciliations of GAAP to Non-GAAP Financial Measures](index=12&type=section&id=Reconciliations%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) [Adjusted EBITDA and Adjusted EBIT Reconciliation](index=12&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EBIT%20Reconciliation) This section provides the reconciliation of net income to Adjusted EBITDA and Adjusted EBIT for the thirteen and twenty-six weeks ended August 2, 2025, and August 3, 2024, highlighting adjustments for interest, taxes, depreciation, amortization, and equity compensation Adjusted EBITDA and Adjusted EBIT (in thousands) | Metric | Q2 FY25 | Q2 FY24 | YTD FY25 | YTD FY24 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | | Net income | $125,434 | $142,588 | $171,518 | $219,053 | | Interest expense, net | $9,028 | $9,071 | $18,072 | $18,557 | | Income tax expense | $39,399 | $43,958 | $56,343 | $65,145 | | Depreciation and amortization | $31,021 | $28,918 | $61,171 | $57,771 | | Equity compensation | $7,602 | $7,955 | $15,144 | $14,093 | | Adjusted EBITDA | $212,484 | $232,490 | $322,248 | $375,068 | | Adjusted EBIT | $181,463 | $203,572 | $261,077 | $317,297 | - Adjusted EBITDA decreased by **8.6%** for Q2 and **14.1%** for YTD[31](index=31&type=chunk) - Adjusted EBIT decreased by **10.9%** for Q2 and **17.7%** for YTD[31](index=31&type=chunk) [Adjusted Net Income and Adjusted EPS Reconciliation](index=13&type=section&id=Adjusted%20Net%20Income%20and%20Adjusted%20EPS%20Reconciliation) This section reconciles net income to Adjusted Net Income and Adjusted Earnings Per Common Share for the thirteen and twenty-six weeks ended August 2, 2025, and August 3, 2024, by adjusting for equity compensation and its tax effects Adjusted Net Income and Adjusted EPS (in thousands, except per share) | Metric | Q2 FY25 | Q2 FY24 | YTD FY25 | YTD FY24 | | :-------------------------------- | :-------- | :-------- | :-------- | :-------- | | Net income | $125,434 | $142,588 | $171,518 | $219,053 | | Equity compensation | $7,602 | $7,955 | $15,144 | $14,093 | | Tax effects of these adjustments | $(1,717) | $(1,901) | $(3,745) | $(3,333) | | Adjusted Net Income | $131,319 | $148,642 | $182,917 | $230,262 | | Diluted EPS | $1.85 | $1.95 | $2.52 | $2.93 | | Adjusted diluted EPS | $1.94 | $2.03 | $2.69 | $3.08 | - Adjusted Net Income decreased by **11.7%** for Q2 and **20.6%** for YTD[32](index=32&type=chunk) - Adjusted diluted EPS decreased by **4.4%** for Q2 and **12.7%** for YTD[32](index=32&type=chunk) Fiscal Year 2025 Guidance Reconciliation for Adjusted Net Income and Adjusted EPS (in millions, except per share) | Metric | Low Range (FY26) | High Range (FY26) | | :----------------------------------- | :--------------- | :---------------- | | Net Income | $360.0 | $410.0 | | Equity compensation | $20.0 | $20.0 | | Adjusted Net Income | $380.0 | $430.0 | | Diluted EPS | $5.30 | $6.00 | | Equity compensation | $0.30 | $0.30 | | Adjusted Diluted EPS | $5.60 | $6.30 | [Adjusted Free Cash Flow Reconciliation](index=14&type=section&id=Adjusted%20Free%20Cash%20Flow%20Reconciliation) This section reconciles net cash provided by operating activities to Adjusted Free Cash Flow for the thirteen and twenty-six weeks ended August 2, 2025, and August 3, 2024 Adjusted Free Cash Flow (in thousands) | Metric | Q2 FY25 | Q2 FY24 | YTD FY25 | YTD FY24 | | :----------------------------------- | :-------- | :-------- | :-------- | :-------- | | Net cash provided by operating activities | $78,575 | $91,346 | $236,047 | $291,023 | | Net cash used in investing activities | $(56,911) | $(41,384) | $(107,899) | $(73,739) | | Adjusted Free Cash Flow | $21,664 | $49,962 | $128,148 | $217,284 | - Adjusted Free Cash Flow decreased by **56.6%** for Q2 and **41.1%** for YTD[36](index=36&type=chunk)