Store Operations - As of November 1, 2025, the company operated 317 stores, an increase from 293 stores as of November 2, 2024, representing an 8.2% growth in store count[85]. - The company opened 11 new stores in the third quarter of 2025, contributing $48.6 million in net sales, with a total of 24 new stores opened since the end of the third quarter of 2024[107]. - 24 new stores opened since the end of Q3 2024, generating $110.3 million in net sales year-to-date 2025, with 58 new stores opened since 2022[116]. - The company expects new stores to be a key driver of growth in net sales and gross margin, with a focus on off-mall locations[97]. Sales Performance - Net sales for the 2025 third quarter were influenced by a product assortment focusing on outdoor, sports, recreation, apparel, and footwear, which accounted for 32%, 21%, 25%, and 22% of net sales respectively[82]. - The company reported an increase in comparable sales, which includes both in-store and e-commerce sales, reflecting positive consumer trends and effective inventory management[88]. - Net sales increased by $40.4 million, or 3.0%, in the third quarter of 2025 compared to the same period in 2024, driven by a 5.6% increase in the sports and recreation merchandise division[106]. - For the year-to-date 2025, net sales increased by $78.4 million, or 1.8%, compared to year-to-date 2024, with growth in all merchandise divisions[115]. E-commerce Performance - E-commerce sales are a significant component of the company's revenue, with all transactions through the website or mobile app counted towards comparable sales[89]. - E-commerce net sales represented 10.4% of merchandise sales in the third quarter of 2025, up from 8.8% in the prior year, with a 22.2% increase in e-commerce net sales year-over-year[108]. - E-commerce net sales increased by 16.1% year-to-date 2025, representing 10.5% of merchandise sales compared to 9.2% in year-to-date 2024[117]. Financial Metrics - Adjusted EBITDA and other non-GAAP metrics are used to evaluate business performance and inform strategic decisions[91]. - Gross margin increased by $36.7 million, or 8.0%, to $493.4 million in the third quarter of 2025, with gross margin as a percentage of net sales rising from 34.0% to 35.7%[109]. - Gross margin increased by $57.8 million, or 3.9%, to $1,529.0 million for year-to-date 2025, with a gross margin percentage increase of 70 basis points to 35.3%[118]. - Adjusted Net Income for the thirty-nine weeks ended November 1, 2025, was $260.2 million, down from $300.7 million for the same period in 2024[129]. Expenses - Selling, general and administrative (SG&A) expenses increased by $27.8 million, or 7.6%, to $393.0 million in the third quarter of 2025, primarily due to strategic investments in new stores and technology[109]. - SG&A expenses rose by $99.7 million, or 9.2%, to $1,187.0 million for year-to-date 2025, primarily due to strategic investments of $85.0 million[119]. Cash Flow and Capital Expenditures - Net cash provided by operating activities for the thirty-nine weeks ended November 1, 2025, was $285.066 million, a decrease of $102.8 million compared to the same period in 2024[143][144]. - Total capital expenditures for the thirty-nine weeks ended November 1, 2025, amounted to $170.154 million, an increase from $135.866 million in the same period of 2024[142]. - The company expects capital expenditures for fiscal 2025 to be between $180 million and $210 million, with 60% allocated to new stores[142]. Debt and Liquidity - As of November 1, 2025, the company's total long-term debt is $99.213 million for term loans and $460 million for notes, with a total of $8.386 million from the ABL Facility[133][135]. - The company has a minimum available borrowing capacity of $953.921 million as of November 1, 2025, with no outstanding borrowings on the ABL Facility[136]. - Interest expense remained relatively constant in the third quarter of 2025 compared to the same period in 2024[110]. - Interest expense decreased by $0.6 million, or 2.3%, for year-to-date 2025, attributed to lower interest rates and a reduced outstanding balance on the Term Loan[121]. Shareholder Returns - The company repurchased 2,080,772 shares at an average price of $47.59 per share, totaling $99.031 million in the first quarter of 2025[140]. - Quarterly dividends paid for the year-to-date 2025 totaled $26.028 million, with a dividend of $0.13 per share declared for the fiscal quarter ended November 1, 2025[141]. - The company had $536.5 million remaining for share repurchases under the 2024 Share Repurchase Program as of November 1, 2025[139].

Core Insights - Academy Sports and Outdoors, Inc. (ASO) is a prominent player in the Leisure and Recreation Products industry, focusing on delivering value through a wide range of sporting goods and outdoor equipment [1] Financial Performance - ASO reported an EPS of $1.14, exceeding the forecasted $1.07, marking a 6.54% earnings surprise and an improvement from the previous year's EPS of $0.98 [2][6] - Revenue reached $1.38 billion, slightly below the anticipated $1.41 billion by 1.2%, but still an increase from $1.34 billion the previous year [3][6] - Overall sales increased by 3%, although comparable sales saw a slight decline of 0.9% [3] - eCommerce sales experienced significant growth of 22.2%, indicating effective implementation of the company's digital strategy [3][6] Strategic Initiatives - ASO is expanding its footprint with the opening of eleven new stores across ten states, contributing to high single-digit growth [4] - The company had a strong start to the holiday season, highlighted by a record Black Friday event, reinforcing its market leadership and share gains [4] Valuation Metrics - ASO has a price-to-earnings (P/E) ratio of approximately 9, reflecting investor confidence [5] - The price-to-sales ratio is about 0.56, and the enterprise value to sales ratio is around 0.75, indicating the company's valuation relative to its sales [5] - The debt-to-equity ratio stands at approximately 0.65, and the current ratio is about 1.71, demonstrating a balanced financial structure [5]

Core Insights - Academy Sports + Outdoors is experiencing strong performance in the footwear segment, particularly in performance running shoes from brands like Nike, Brooks, Asics, and New Balance [1] - The athletic slide category has seen a significant resurgence, with double-digit growth driven by ultra-comfort options like Nike Reactx Rejuven8 and Adidas Adilette Comfort Slide [2] - The affordability of slides, priced around $30, appeals to consumers facing financial constraints, making them a popular choice [3] - The company is positioned well in the K-shaped economy, attracting both affluent customers and value-oriented consumers, as noted by Jefferies analyst Jonathan Matuszewski [4] - Promotions are influencing purchasing patterns, with sales aggregating around promotional events [5] - Anticipation for the next year's World Cup is expected to boost sales in specific categories, particularly soccer-related footwear and equipment [6]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were approximately $1.4 billion, up 3% year-over-year, with a comparable store sales (comp) decrease of 0.9% [27][31] - Gross margin increased to 35.7%, up 170 basis points from the previous year, driven by merchandise margin growth and improved freight costs [10][28] - Operating income grew 9.7% to approximately $100 million, and diluted earnings per share increased over 14% to $1.05 [31][32] Business Line Data and Key Metrics Changes - Sports and recreation division saw a 6% increase, driven by growth in baseball, outdoor cooking, fitness equipment, and bicycles [10] - Apparel sales grew 3%, supported by strong performance from national brands like Nike and Jordan, as well as private brands [10] - Footwear business grew 2%, with strong contributions from performance running brands [11] Market Data and Key Metrics Changes - The top two income quintiles (households earning over $100,000) now represent roughly 40% of sales, with high single-digit growth in traffic from these cohorts [12][13] - The company continues to see market share gains across key categories, including apparel, footwear, and sporting goods [15] - Firearms market share has grown for over 18 consecutive months, despite softness in the ammunition segment [15] Company Strategy and Development Direction - The company plans to open 20-25 new stores in 2026, focusing on legacy and existing markets [18][17] - E-commerce sales grew 22% in Q3, with a penetration rate of 10.4% of total sales, indicating a strong omnichannel strategy [18][19] - The company is enhancing its product assortment and technology in stores, including RFID scanners to improve inventory accuracy [24][20] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are shopping more selectively, with a focus on value amid rising prices [5][7] - The company is optimistic about the upcoming holiday season, supported by strong promotional pricing and inventory management [10][34] - Management highlighted the importance of adapting to consumer behavior and maintaining competitive pricing strategies [10][38] Other Important Information - Free cash flow was negative $9 million due to tariff payments, but the company maintains strong liquidity with $290 million in cash [32][31] - The company is committed to balanced capital allocation, having paid $8.7 million in dividends and invested $54 million in strategic initiatives during the quarter [32] Q&A Session Summary Question: Can you discuss the average ticket increase and pricing dynamics? - Management indicated that average unit retails (AUR) were up mid- to high-single digits, while units per transaction (UPT) were down mid-single digits, reflecting a trade-off between AUR and unit sales [36][37] Question: What is the contribution of the Jordan brand at the store level? - The Jordan and Nike brands combined saw high single-digit comp growth, with plans to expand apparel and footwear offerings in stores [44][45] Question: How does the company view the health of its customer base? - Management noted that upper-income customers continue to grow, while lower-income customers are pulling back, but the overall customer base is becoming healthier [58][60] Question: What are the expectations for e-commerce growth and new store openings? - E-commerce growth of 22% exceeded expectations, and the company plans to continue leveraging new stores to drive online demand [62][63] Question: How do Black Friday promotions compare to last year? - Promotions were consistent with last year, and management is optimistic about customer engagement with promotions during the holiday season [77][78]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were approximately $1.38 billion, up 3% year-over-year, with a comparable store sales (comp) decrease of 0.9% [25][28] - Gross margin increased to 35.7%, up 170 basis points from the previous year, driven by merchandise margin growth and improved freight costs [9][26] - Operating income grew 9.7% to approximately $100 million, and diluted earnings per share increased over 14% to $1.05 [28][30] Business Line Data and Key Metrics Changes - Sports and recreation division saw a 6% increase, driven by growth in baseball, outdoor cooking, fitness equipment, and bicycles [9] - Apparel sales grew 3%, supported by strong performance from national brands like Nike and Jordan, as well as private brands [9] - Footwear business grew 2%, with strong sales from performance running brands [10] Market Data and Key Metrics Changes - The top two income quintiles (households earning over $100,000) now represent approximately 40% of sales, with traffic from these cohorts growing in the high single digits [12] - The company continues to see market share growth across key categories, including apparel, footwear, and sporting goods [13] - Firearms market share has grown for over 18 consecutive months, despite softness in the ammunition segment [13] Company Strategy and Development Direction - The company plans to open 20-25 new stores in 2026, focusing on legacy and existing markets [16][15] - E-commerce sales grew 22% in Q3, with a penetration rate of 10.4% of total sales, indicating a strong omnichannel strategy [16][25] - The company is investing in technology and talent to enhance the customer experience and drive growth in the dot-com business [17][18] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are shopping episodically and seeking value due to rising prices [4] - The company is optimistic about the upcoming holiday season, with strong promotional pricing and inventory management strategies in place [9][31] - Management expects trends of upper-income consumers trading into Academy to continue, despite challenges in the lower-income segments [50][51] Other Important Information - Free cash flow was negative $9 million due to tariff payments, but the company maintains strong liquidity with $290 million in cash [29][30] - The company has over $530 million remaining on its share repurchase authorization and plans to resume repurchases in Q4 [30] Q&A Session Summary Question: Can you discuss the average ticket increase and pricing dynamics? - Management indicated that average unit retails (AUR) were up mid- to high-single digits, while units per transaction (UPT) were down mid-single digits, reflecting a trade-off between AUR and unit sales [34][35] Question: What is the contribution of the Jordan brand at the store level? - The Jordan and Nike brands combined saw high single-digit comp growth, with plans to roll out more apparel and footwear in spring [42] Question: How does the company view the health of its customer base? - The company is seeing continued growth in upper-income consumers, while lower-income consumers are pulling back, but the overall customer base is becoming healthier [50][51] Question: How did Black Friday promotions compare to last year? - Promotions were consistent with last year, and the company is monitoring customer response to promotions as a key factor for the holiday season [65] Question: What are the potential pressure points for Q4 gross margin? - The health of the consumer and their response to promotions will be critical for Q4 gross margin outlook [61]

Core Insights - Academy Sports and Outdoors, Inc. (ASO) reported quarterly earnings of $1.14 per share, exceeding the Zacks Consensus Estimate of $1.07 per share, and up from $0.98 per share a year ago, representing an earnings surprise of +6.54% [1] - The company posted revenues of $1.38 billion for the quarter ended October 2025, which was 1.2% below the Zacks Consensus Estimate, and an increase from $1.34 billion year-over-year [2] - The stock has underperformed the market, losing about 15.1% since the beginning of the year compared to the S&P 500's gain of 16.4% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.06 on revenues of $1.75 billion, and for the current fiscal year, it is $5.78 on revenues of $6.1 billion [7] - The estimate revisions trend for Academy Sports and Outdoors was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Leisure and Recreation Products industry, to which Academy Sports and Outdoors belongs, is currently in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net sales for Q3 2025 reached $14 billion, a 30% year-over-year increase[31] - E-commerce sales experienced substantial growth of 222%[31] - Gross margin expanded by 170 basis points[31] - GAAP EPS stood at $105, while adjusted EPS reached $114[31] - For the thirty-nine weeks ended November 1, 2025, net income was $24308 million, compared to $284816 million for the thirty-nine weeks ended November 2, 2024[45] Store Expansion and Growth Strategy - The company opened 11 new stores in Q3 2025[31] and a total of 24 stores in fiscal year 2025[14] - The company plans to open an additional 20-25 stores in 2026[14] - 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%+[16] - The company has opened 59 new stores over the past three+ years[14] Fiscal Year 2025 Guidance - The company updated its fiscal 2025 sales guidance to a range of -20% to flat[41] - The company anticipates a tax rate of 235% for the year[41] - The company projects GAAP net income between $365 million and $400 million, and adjusted net income between $385 million and $420 million[42]

Core Viewpoint - Academy Sports and Outdoors, Inc. has revised its financial guidance for fiscal 2025 based on third-quarter results and expectations for the remainder of the year [1]. Financial Guidance - The company now projects earnings per share between $5.35 and $5.85, with adjusted earnings per share ranging from $5.65 to $6.15 [2]. - Net sales are expected to be between $6.025 billion and $6.20 billion, while comparable sales are projected to decline by 2.0% to remain flat [2]. Previous Expectations - Previously, the company anticipated earnings per share in the range of $5.30 to $6.00 and adjusted earnings per share between $5.60 and $6.30 [3]. - Net sales were expected to be between $6.0 billion and $6.265 billion, with comparable sales projected to decline by 3.0% to grow by 1.0% [3]. Analyst Expectations - Analysts polled expect the company to report earnings of $5.77 per share on net revenues of $6.11 billion for the year, excluding special items [3]. Dividend Declaration - The Board of Directors declared a quarterly cash dividend of $0.13 per share, payable on January 15, 2026, to stockholders of record as of December 18, 2025 [4].

Financial Performance - Third quarter net sales increased by 3.0% to $1,383.7 million, while comparable sales decreased by 0.9%[2] - Third quarter diluted GAAP EPS was $1.05, reflecting a 14.1% increase compared to the previous year[2] - Year-to-date net sales reached $4,334.9 million, a 1.8% increase, with comparable sales down 1.4%[3] - Net sales for the thirteen weeks ended November 1, 2025, were $1,383,696, an increase from $1,343,330 for the same period in 2024, representing a growth of 3.0%[19] - Net income for the thirty-nine weeks ended November 1, 2025, was $243,080, down from $284,816 for the same period in 2024, reflecting a decrease of 14.7%[21] - Adjusted Net Income for the thirty-nine weeks ended November 1, 2025, was $260.24 million, a decrease of 13.4% from $300.73 million for the same period in 2024[29] - Adjusted EBITDA for the thirty-nine weeks ended November 1, 2025, was $463.74 million, down 8.8% from $508.58 million in the prior year[28] - Basic earnings per share for the thirteen weeks ended November 1, 2025, increased to $1.07, compared to $0.94 for the same period in 2024, a rise of 13.8%[19] Sales and Store Expansion - eCommerce sales rose by 22.2%, and new stores are comping high single digits[1] - The company opened eleven new stores in the third quarter, totaling 317 locations across 21 states, with plans for an additional 20-25 new stores in fiscal 2026[6] - The company expects to continue expanding its business and operations, including the opening of new stores and entering new markets[16] Guidance and Projections - The company narrowed its fiscal 2025 sales guidance, now expecting net sales between $6,025 million and $6,200 million[9] - Gross margin guidance for fiscal 2025 was raised to a low end of 34.3%[9] - The company expects Adjusted Net Income for the fiscal year ending January 31, 2026, to be in the range of $385.0 million to $420.0 million[31] - The projected Adjusted Earnings Per Common Share, Diluted, for the fiscal year ending January 31, 2026, is expected to be between $5.65 and $6.15[31] Cash Flow and Investments - Cash and cash equivalents as of November 1, 2025, were $289.5 million, a decrease of 2.2% from the previous year[4] - Net cash provided by operating activities for the thirty-nine weeks ended November 1, 2025, was $285.07 million, compared to $387.91 million in the same period of 2024, reflecting a decline of 26.4%[25] - Net cash used in investing activities for the thirty-nine weeks ended November 1, 2025, was $166.03 million, an increase from $136.45 million in the prior year[25] - Adjusted Free Cash Flow for the thirty-nine weeks ended November 1, 2025, was $119.04 million, down from $251.47 million in the same period of 2024[33] - Capital expenditures for the thirty-nine weeks ended November 1, 2025, were $170.15 million, compared to $135.87 million in the prior year, indicating increased investment[25] Inventory and Expenses - Merchandise inventories, net, rose to $1,701,163 as of November 1, 2025, compared to $1,524,978 as of November 2, 2024, indicating an increase of 11.5%[23] - Selling, general and administrative expenses for the thirty-nine weeks ended November 1, 2025, were $1,186,973, up from $1,087,287 for the same period in 2024, a rise of 9.1%[21] - Current liabilities increased to $1,227,029 as of November 1, 2025, from $1,212,014 as of November 2, 2024[23] - Gross margin improved to 35.7% for the thirteen weeks ended November 1, 2025, compared to 34.0% for the same period in 2024[19] - Operating income for the thirteen weeks ended November 1, 2025, was $100,392, compared to $91,474 for the same period in 2024, reflecting an increase of 9.9%[19] Share Repurchases - Share repurchases in the year-to-date totaled $99.9 million, a significant decrease of 63.9% compared to $276.6 million in the previous year[5]

Core Insights - Academy Sports and Outdoors, Inc. reported a 3.0% increase in net sales for the third quarter, reaching $1,383.7 million, while comparable sales decreased by 0.9% [1][2] - The company achieved a diluted GAAP EPS of $1.05, reflecting a 14% increase compared to the previous year [1][2] - eCommerce sales saw a significant increase of 22.2%, and the company opened eleven new stores across ten states [1][2][7] Financial Performance - **Third Quarter Results**: - Net sales: $1,383.7 million (up 3.0% from $1,343.3 million) - Comparable sales: (0.9)% (improved from (4.9)%) - Net income: $71.6 million (up 8.8% from $65.8 million) - Adjusted net income: $77.3 million (up 9.6% from $70.5 million) - Diluted EPS: $1.05 (up 14.1% from $0.92) [2][3] - **Year-to-Date Results**: - Net sales: $4,334.9 million (up 1.8% from $4,256.5 million) - Comparable sales: (1.4)% (improved from (5.9)%) - Net income: $243.1 million (down 14.6% from $284.8 million) - Adjusted net income: $260.2 million (down 13.5% from $300.7 million) - Diluted EPS: $3.57 (down 7.5% from $3.86) [3][4] Balance Sheet Highlights - As of November 1, 2025: - Cash and cash equivalents: $289.5 million (down 2.2% from $296.0 million) - Merchandise inventories: $1,701.2 million (up 11.6% from $1,525.0 million) - Long-term debt: $481.3 million (down 0.4% from $483.1 million) [4][5] Store Expansion - Academy opened eleven new stores in the third quarter, increasing its total to 317 locations across 21 states, with plans to open an additional 20-25 stores in fiscal 2026 [7][8] Guidance and Outlook - The company narrowed its sales guidance for fiscal 2025, adjusting the low end from -3.0% to -2.0% and the high end from +1.0% to flat. The gross margin guidance was raised to a low end of 34.3% from 34.0% [9][10]