Core Insights - Academy Sports + Outdoors aims to be the leading sports and outdoor retailer in the U.S., focusing on growth through new store openings, enhanced e-commerce, and technological investments [1][2] Business Growth - Since going public in 2020, Academy has expanded its store count to over 300 across 21 states, including new markets like Pennsylvania, Maryland, West Virginia, Virginia, and Ohio [5] - Revenue increased from $4.8 billion in 2019 to $5.9 billion by the end of fiscal year 2024, reflecting a strong growth trajectory [5] - Total Shareholder Return has risen over 300% since the IPO, indicating robust investor confidence [5] Strategic Initiatives - The company has bought back over a third of its shares, demonstrating confidence in its business model [5] - Academy has retired approximately $1 billion in debt, enhancing its financial stability [5] - The launch of the Jordan Brand in 145 stores marks the largest brand rollout in the company's history [5] Partnerships and Community Engagement - Collaborations with Fanatics and DoorDash have expanded product offerings and improved customer service through same-day delivery [5] - The introduction of the R.O.W.™ private brand emphasizes community empowerment and inclusivity [5] - Academy has donated over $2.2 million to St. Jude Children's Research Hospital from 2021 to 2025, showcasing its commitment to social responsibility [5]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgency to invest in AI technologies now [1][13] - The energy demands of AI technologies are highlighted, with data centers consuming as much energy as small cities, leading to concerns about power grid strain and rising electricity prices [2][3] Company and Industry Analysis - A specific company is positioned as a critical player in the AI energy landscape, owning essential energy infrastructure assets that will benefit from the increasing energy demands of AI data centers [3][7] - This company is not a chipmaker or cloud platform but is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and benefiting from the onshoring trend driven by tariffs [5][6] - The company is noted for its debt-free status and significant cash reserves, equating to nearly one-third of its market capitalization, which positions it favorably compared to other energy firms burdened by debt [8][10] - It holds a substantial equity stake in another AI-related company, providing investors with indirect exposure to multiple AI growth engines without the associated premium costs [9][10] - The company is involved in large-scale engineering, procurement, and construction (EPC) projects across various energy sectors, including nuclear energy, which is crucial for America's future power strategy [7][14] - The overall investment thesis suggests that the company is undervalued, trading at less than seven times earnings, and is poised for significant growth as AI continues to disrupt traditional industries [10][11]

Core Idea - The article emphasizes the investment philosophy of Thomas W. Phelps, particularly his book "100 to 1 in the Stock Market," which advocates for buying exceptional companies early, holding them with discipline, and allowing compounding to generate wealth [1][4][6]. Phelps's Investment Framework - Phelps's framework focuses on identifying companies with durable advantages, such as network effects, proprietary know-how, and advantageous cost structures [8]. - The importance of verifying a large addressable market that allows for long-term compounding without hitting a wall is highlighted [8]. - Present-tense profitability is essential; Phelps preferred companies that generate cash rather than speculative ventures [8]. - The article suggests buying companies when their narratives are still forming, favoring modest valuations over those priced for perfection [8]. - A strategy of doing less is recommended, as holding onto winning investments can lead to tax deferral and reduced errors [8]. Current Investment Candidates - The article lists 25 companies that fit Phelps's criteria, categorized by how they create competitive advantages rather than by index labels [9]. - Companies in the construction and infrastructure sector, such as EMCOR Group and Quanta Services, are noted for their execution capabilities and ability to convert backlog into cash [10][11]. - Precision manufacturers like Celestica and Fabrinet are recognized for their high returns on capital and asset-light models [12]. - In network infrastructure, Arista Networks and Super Micro Computer are highlighted for their strong positions in high-speed switching and AI hardware, respectively [13]. - Companies in the materials sector, such as Martin Marietta Materials, are noted for their pricing power and local monopolies [14]. - Engineering firms like WSP Global are recognized for their expertise and customer relationships in regulated markets [15]. - Consumer brands like e.l.f. Beauty and Academy Sports are mentioned for their market share growth and operational efficiency [16]. - Specialty finance companies like FirstCash and software firms like Agilysys are noted for their cash generation and growth potential [17]. - Internationally, utilities like Sabesp and fintechs like StoneCo are highlighted for their governance and profitability improvements [18]. - UK companies like Spectris and Halma are recognized for their consistent acquisition strategies and operational excellence [19]. Conclusion - The article concludes that the focus should be on finding real engines of growth and sizing investments appropriately to endure market volatility, allowing time to enhance value [22].

Group 1 - The article discusses the author's previous hold rating on Academy Sports and Outdoors, Inc. (ASO), indicating a desire for more clarity on tariff situations and macroeconomic conditions [1] - The author emphasizes a diverse investment background, incorporating fundamental, technical, and momentum investing strategies to enhance their investment process [1] - The purpose of writing on Seeking Alpha is to track investment ideas' performance and connect with like-minded investors [1] Group 2 - There are no disclosed stock, option, or derivative positions in any mentioned companies, nor plans to initiate such positions within the next 72 hours [2] - The article expresses the author's personal opinions and is not compensated for it, aside from Seeking Alpha [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the platform's overall stance [3]

Core Insights - The year 2025 has been characterized as interesting for the retail sector, with ongoing challenges and changes impacting operations [2] - The changing trade war has influenced the company's navigation strategies, but positive initiatives are yielding results [2] - New store growth has led to positive comparable store sales in the mid-single digits for recently opened locations [2] - The company's dot-com business is experiencing acceleration due to a back-to-basics approach that enhances site navigation [3]

Financial Data and Key Metrics Changes - The company reported a positive comparable store sales growth in Q2, with mid-single-digit increases 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 improved by 30 basis points year-to-date, with a full-year guidance of an increase between 10 to 60 basis points [41][42] 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 [17] - The company has expanded its Nike assortment, increasing the square footage dedicated to Nike products by 10-15% in 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 [10][11] Market Data and Key Metrics Changes - Traffic from the lowest two income quintiles (under $50,000) has declined in high single digits, while the middle income quintile remains stable [8][9] - The company has successfully attracted higher-income customers, with a notable increase in sales from those making over $100,000 [10][11] Company Strategy and Development Direction - The company is focused on long-term growth through new store openings and enhancing its e-commerce platform, aiming for a 20% penetration in omni-channel sales [48] - The strategy includes expanding the Jordan brand presence in stores and leveraging customer feedback to enhance product offerings [20][21] - The company aims to maintain its core value proposition while also catering to higher-end consumers through new brand introductions [39][40] 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 [37][38] - The company is navigating challenges related to tariffs and inflation, but believes its value positioning will help retain customers [63][64] - Management anticipates some market consolidation due to the financial pressures on companies with weaker balance sheets [80] Other Important Information - The company has successfully pulled forward inventory to mitigate tariff impacts, with inventory up 8% in dollars and 4.5% in units per store [71][72] - The capital allocation strategy remains focused on stability, with a significant portion of cash flow reinvested into the business and share buybacks [59][60] Q&A Session Summary Question: Expectations for the consumer environment in FY '5 compared to FY '4 - Management expects the environment to remain the same but acknowledges potential challenges from tariffs and inflation [63] Question: Pricing and elasticity response - Management noted varied responses to price increases, with some categories experiencing unit erosion while others remained stable [65][66] Question: Inventory growth expectations for the second half - Inventory is expected to taper off as the company manages elevated average unit retail prices [72][74] Question: Margins outlook outside of tariff costs - Management sees upside opportunities in supply chain efficiencies and cost management [75][78] Question: Competitive landscape and market share consolidation - Management anticipates some consolidation in the market due to financial pressures on weaker companies [80]

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)