Academy(ASO) - 2026 Q2 - Quarterly Results

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