Academy(ASO) - 2024 Q1 - Quarterly Report

Financial Performance - For the first quarter of 2023, net sales decreased by 7.3% compared to the same period in 2022[91]. - Net sales decreased by $84.1 million, or 5.7$54.3 million, or 10.4%, to $467.1 million in Q1 2023, with a gross margin percentage decrease from 35.5$25.0 million, or 7.9%, to 340.9 million in Q1 2023, with SG&A as a percentage of sales rising to 24.6%[111]. - Adjusted EBITDA for the thirteen weeks ended April 29, 2023, was 167.6 million, a decrease of 28.8% from $235.3 million for the same period in 2022[120]. - Adjusted Net Income for the thirteen weeks ended April 29, 2023, was$102.98 million, down from $152.49 million in the prior year, representing a decline of 32.5$1.19, compared to $1.69 for the same period in 2022, reflecting a decrease of 29.6$52.14 million for the thirteen weeks ended April 29, 2023, compared to $97.10 million in the prior year, indicating a decline of 46.3$11.59 million, significantly lower than $79.79 million for the same period in 2022, marking a decrease of 85.4$52.135 million, a decrease of $45.0 million compared to Q1 2022[140]. Store Operations - As of April 29, 2023, the company operated 269 stores, an increase from 260 stores in the prior year[87]. - The average store size is approximately 70,000 gross square feet, with locations primarily in the southern United States[86]. - The company plans to open 13 to 15 new stores in 2023 and 120 to 140 new stores over the next five years, expecting most to achieve profitability within the first twelve months[98]. - The company plans to open 13 to 15 new locations in 2023, having opened one new location in the thirteen weeks ended April 29, 2023[133]. - Pre-opening expenses for new stores were$1.6 million in Q1 2023, compared to $1.0 million in Q1 2022[102]. Sales and E-commerce - E-commerce sales are included in the comparable sales calculation, impacting overall sales performance[90]. - E-commerce net sales represented 8.2$295.5 million, which is expected to be sufficient to meet cash requirements for at least the next 12 months[127]. - The company's long-term debt includes $400 million in fixed-rate senior secured notes at 6.00$194 million at 8.60% maturing on November 6, 2027[128]. - The company's liquidity under the ABL Facility was $986.1 million as of April 29, 2023, compared to$954.5 million for the same period in 2022[131]. Capital Expenditures and Shareholder Returns - Total capital expenditures for Q1 2023 amounted to $40.464 million, a significant increase from$17.280 million in Q1 2022[138]. - The Company expects capital expenditures for fiscal year 2023 to be between $200 million and$250 million[138]. - The Company authorized a share repurchase program allowing for the purchase of up to $600 million of outstanding shares, with approximately$249.4 million available as of April 29, 2023[134]. - In Q1 2023, the Company repurchased 750,010 shares at an average price of $66.69, totaling$50.015 million[135]. - The Company declared a quarterly cash dividend of $0.09 per share, totaling$6.929 million for Q1 2023, payable on July 13, 2023[137]. Inventory and Risk Management - The company has implemented new tools for inventory management, improving handling and vendor relations[95]. - The decrease in gross margin was primarily due to increased clearance and promotional activity, along with higher inventory shrink[109]. - The Company changed its inventory accounting method from LIFO to the weighted average cost method effective January 29, 2023, to improve comparability with industry peers[144]. - There were no material changes in primary risk exposures or management of market risks compared to the previous Annual Report[146]. - The company continues to face risks related to consumer discretionary spending and competition in the retail industry[77].