Business Transformation & Strategy - The company is continuing its transformation strategy while strengthening retail fundamentals[6] - Key initiatives include omni-channel marketing reinvention, customer experience improvements, capital allocation and debt pay down, and investments in culture, people, tech and processes[7] - The company has reduced inventory by $12.7 million year-over-year and reduced debt by $27.3 million[7] 2025 Plan & Growth Focus - The company aims to drive growth by focusing on hunting, fishing, and personal protection markets[9, 10] - The company's current market share in hunting is 4% of a $12 billion total addressable market[13] - The company's current market share in fishing is 1% of a $13 billion total addressable market[14] Hunting & Fishing Market Growth - Hunting participation increased from 10.6 million in 2016 to 14.4 million in 2022, with a CAGR of +5.2%[17] - Fishing participation increased from 34.7 million in 2016 to 39.9 million in 2022, with a CAGR of +5.2%[22] Reinforcing Local Knowledge & Expertise - The company aims to be known as the leading local expert for hunting & fishing solutions[28] - The company will reinforce local knowledge through assortment and outfitters as influencers[49] - 72% of U.S. firearm owners cite protection as the major reason for ownership[63]

Core Viewpoint - Academy Sports and Outdoors, Inc. (NASDAQ: ASO) is given a hold rating due to concerns about the near-term outlook despite positive execution in store expansion, premium brand partnerships, and traction with higher-income customers [1] Group 1: Company Performance - The company shows encouraging execution on store expansion and premium brand partnerships [1] - There is a noted increase in traction with higher-income customers [1] Group 2: Market Challenges - Weakness is observed among core lower-income consumers, which poses a risk to the company's performance [1] - Inventory risks and macroeconomic uncertainties are highlighted as significant concerns for the company [1]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $1,350 million, down 0.9% year-over-year, resulting in a negative 3.7% comparable sales (comp) [11][25] - Operating income was $69.3 million, with diluted EPS at $0.68 and adjusted EPS at $0.76 [30] - Gross margin improved to 34%, a 60 basis point increase from the previous year, driven by merchandise margin expansion [28][29] Business Line Data and Key Metrics Changes - Footwear and apparel were the strongest categories, with athletic footwear posting a positive 4.5% comp, driven by brands like Nike and Brooks [26][27] - Outdoor category saw low single-digit declines primarily due to softer sales in ammunition, while fishing and firearms performed well [12][28] - E-commerce channel experienced a positive 10% comp for the quarter, with significant contributions from the Jordan brand [25][16] Market Data and Key Metrics Changes - Increased foot traffic from customers with household incomes over $100,000, indicating a shift towards value-seeking behavior [10][37] - The company noted a sequential improvement in sales throughout the quarter, with April finishing positively after a slow February [11][44] Company Strategy and Development Direction - The company is focused on reducing exposure to products made in China, aiming to decrease this from 9% to approximately 6% by year-end [8][10] - New store expansion remains a key growth engine, with plans to open 20 to 25 new stores in 2025 [14][15] - The company is leveraging technology, including RFID and handheld devices, to improve inventory accuracy and customer experience [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about navigating the current tariff environment while maintaining value for customers [5][24] - The company anticipates continued pressure on consumer spending due to inflation but believes its value proposition will attract more customers [24][108] - Guidance for 2025 was updated to reflect a range of sales outcomes based on potential tariff scenarios, with expected sales between $5.97 billion and $6.26 billion [35][36] Other Important Information - The company returned over $100 million of free cash flow to investors in Q1, including share repurchases and dividends [33] - Strategic investments in digital and supply chain technologies are expected to normalize SG&A expenses as the year progresses [30][32] Q&A Session Summary Question: Retention of higher-income consumers - Management noted that higher-income consumers are shopping more frequently and are retaining their loyalty, shopping across various product categories [40][41] Question: Performance in May and comp trends - May showed a slight decline in sales, but management remains optimistic about Q2 due to upcoming shopping events like Father's Day [44][45] Question: Impact of weather and consumer health - Management indicated that weather had a significant impact on sales, particularly in basketball and golf, and noted that consumers are cautious in their spending [94][50] Question: Tariff outlook for FY26 - Management emphasized the importance of diversifying sourcing to mitigate future tariff impacts, but specifics on the tariff situation remain uncertain [79][80] Question: Gross margin guidance - Management explained that gross margin guidance remains unchanged due to strategic inventory management and partnerships with suppliers to mitigate cost increases [54][56]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $249.1 million, a 2% increase from $244.2 million in the same period last year, marking a strong start to the year [15] - Gross margin for the quarter was 30.4%, up 20 basis points from 30.2% a year ago, driven by favorable mix and rate improvements in the Fishing business [16] - SG&A expenses were $95.3 million, or 38.2% of net sales, compared to 38.6% in the prior year, reflecting improved expense discipline [17] - Net loss for Q1 was $21.3 million, or negative $0.56 per diluted share, compared to a net loss of $18.1 million, or negative $0.48 per diluted share in the prior year [17] - Adjusted EBITDA for Q1 was negative $9 million, compared to negative $8.7 million in Q1 2024 [18] Business Line Data and Key Metrics Changes - Firearms unit sales increased nearly 7% year-over-year, significantly outpacing the adjusted NICS data, which declined by 5.4% [7] - Positive sales comps were achieved in most core categories, including firearms, clothing, footwear, and ammunition, which was up 3% [7] - Fishing sales were up 11%, validating the new merchandising strategy with a two-year comp stock growth of 12.3% [8] - E-commerce business posted a positive comp, up 8% over last year, driven by a new digital-first marketing strategy [9] Market Data and Key Metrics Changes - The company captured market share in firearms despite a decline in adjusted NICS, indicating strong performance relative to the industry [7] - The strategic shift to everyday low prices on core ammunition calibers drove a 12% increase in ammo unit sales during the quarter [9] Company Strategy and Development Direction - The company is focused on a turnaround plan to transform Sportsman's Warehouse for sustained profitability and growth, emphasizing inventory precision, local relevance, personal protection, and brand awareness [5][6] - The launch of the Safety Outpost on the website signals a commitment to personal protection, a major growth category [11] - The company aims to reduce total inventory by the end of the year while maintaining the right products in the right stores at the right time [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic plan despite ongoing macroeconomic challenges, highlighting improved comp trends and inventory execution [24] - The company anticipates generating positive free cash flow and using excess cash to reduce debt and strengthen the balance sheet [22][41] - Full year guidance for net sales is expected to range between down 1% to up 3.5% compared to 2024, with adjusted EBITDA projected between $33 million and $45 million [23] Other Important Information - Total inventory at the end of Q1 was $412.3 million, up from $391.6 million in the same period last year, reflecting a strategic decision to pull forward inventory ahead of rising tariffs [18] - The company reduced total active SKUs by approximately 20%, simplifying the assortment and improving inventory terms [20] Q&A Session Summary Question: Can you break down comp trends by month and extend that into May? - Management noted good trends in February, with a strong performance in April, and confirmed that May also showed positive comps [26][28] Question: Is the increase in sales due to foot traffic or inventory assortments? - Management indicated a mixture of better traffic trends, positive transaction trends, and higher basket sizes contributing to the increase [29] Question: Can you clarify the $20 million inventory pull forward? - Management confirmed the strategic decision to pull forward $20 million of inventory to address tariff uncertainties and ensure stock for key seasons [36] Question: Did sales mix negatively impact gross profit margin in Q1? - Management acknowledged that heavy penetration in firearms and ammo impacted gross profit margin but was aligned with their strategy [38] Question: What are the thoughts on debt repayment this year? - Management expressed confidence in generating positive free cash flow and applying excess cash to debt repayment [41] Question: What is the impact of tariffs on the P&L? - Management indicated that the pull forward in inventory would likely mitigate tariff impacts until at least the third quarter [49]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 were $249.1 million, a 2% increase from $244.2 million in the same period last year, marking a strong start to the year [17] - Gross margin for the quarter was 30.4%, up 20 basis points from 30.2% a year ago, driven by favorable mix and rate improvements in the Fishing business [18] - SG&A expenses were $95.3 million, or 38.2% of net sales, compared to 38.6% in the prior year, reflecting continued focus on expense discipline [19] - Net loss for Q1 was $21.3 million, or negative $0.56 per diluted share, compared to a net loss of $18.1 million, or negative $0.48 per diluted share in the prior year [19] - Adjusted EBITDA for Q1 was negative $9 million, compared to negative $8.7 million in Q1 2024 [20] Business Line Data and Key Metrics Changes - Firearms unit sales increased nearly 7% year-over-year, significantly outpacing the adjusted NICS data, which declined by 5.4% [8] - Positive sales comps were achieved in most core categories, including firearms, clothing, footwear, and ammunition, which was up 3% [8] - Fishing sales were up 11%, validating the new merchandising strategy with a two-year comp stock growth of 12.3% [9] Market Data and Key Metrics Changes - E-commerce business posted a positive comp, up 8% over last year, outpacing the overall business [11] - The company experienced a 12% increase in ammo unit sales during the quarter, driven by strategic pricing and inventory management [11] Company Strategy and Development Direction - The company is focused on a turnaround plan to transform Sportsman's Warehouse for sustained profitability and growth, emphasizing inventory precision, local relevance, personal protection, and brand awareness [6][7] - A new omni-channel brand campaign is being launched to reestablish Sportsman's Warehouse as the preferred destination for outdoor gear [14] - The company aims to reduce total inventory by the end of the year while maintaining the right products in the right stores at the right time [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic plan despite ongoing consumer macroeconomic challenges, highlighting the unique competitive advantage of local expertise [15] - The company anticipates generating positive free cash flow and reducing debt throughout 2025 [23][24] - Full year guidance for net sales is expected to range between down 1% to up 3.5% compared to 2024, with adjusted EBITDA projected between $33 million and $45 million [24] Other Important Information - Total inventory at the end of Q1 was $412.3 million, up from $391.6 million in the same period last year, reflecting a strategic decision to pull forward inventory ahead of rising tariffs [20] - The company reduced total active SKUs by approximately 20%, simplifying the assortment and improving inventory terms [22] Q&A Session Summary Question: Can you break down comp trends by month and extend into May? - Management noted good trends in February, with a strong performance in April and positive comp for May [27][29] Question: Is the increase in sales due to foot traffic or inventory assortments? - Management indicated a mixture of better traffic trends and higher basket sizes due to improved inventory strategies [30] Question: Can you elaborate on the $20 million inventory pull forward? - The company confirmed the strategic decision to pull forward inventory to mitigate tariff impacts and ensure stock for key seasons [38] Question: Did sales mix negatively impact gross profit margin in Q1? - Management acknowledged that heavy penetration in firearms and ammo impacted gross profit margin [39] Question: What are the thoughts on debt repayment this year? - Management expressed confidence in generating positive free cash flow to apply towards debt repayment [43] Question: What is the expected impact of tariffs on the P&L? - Management indicated that the pull forward in inventory may mitigate tariff impacts until at least the third quarter [50] Question: What is driving the outperformance relative to the industry? - The company is significantly outperforming NICS on a unit basis, driven by strategic inventory management and customer value [53]

Financial Data and Key Metrics Changes - Q4 net sales were $340.4 million, down from $370.4 million in the prior year, which included a 53rd week contributing $27.1 million [24][25] - Adjusted EBITDA for Q4 was $14.6 million, compared to $5.3 million in the same quarter last year, marking a nearly 300% increase in profitability [30] - The company ended the year with liquidity of $131.1 million, an increase of $40 million compared to the end of the previous year [9][31] - Net loss for Q4 was $8.7 million, unchanged from the prior year, but adjusted net income was $1.6 million compared to an adjusted net loss of $7.5 million last year [30] Business Line Data and Key Metrics Changes - Firearms unit sales increased mid-single digits in Q4, despite a 1.7% year-over-year decline in the hunting and shooting sports department [28][10] - Fishing department sales were up 10.3% in Q4, while camping sales increased by 5.2% [26][27] - E-commerce sales were up double digits in Q4, driven by improved marketing and user experience [11] Market Data and Key Metrics Changes - The adjusted NICS data showed a 4.5% decline in the firearms industry, but the company outperformed this trend [9][10] - Fishing continues to grow steadily, with a ten-year CAGR of about 5% [13] Company Strategy and Development Direction - The company aims to return to same-store sales growth in 2025 by focusing on core hunting and fishing solutions [12] - Four strategic initiatives for 2025 include narrowing inventory focus, leveraging local connections, becoming an authority in personal protection, and strengthening brand awareness [14][21] - The company is committed to improving inventory management and operational efficiency to enhance profitability [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in improving sales trends and the effectiveness of the turnaround strategy [9][12] - The company anticipates challenges in Q1 due to calendar shifts but expects stronger performance in Q2 and Q3 [42][43] - Management noted that consumer behavior has not significantly changed due to tariff headlines, attributing any sales fluctuations to timing rather than a slowdown [61][62] Other Important Information - The company ended the year with a net debt balance of $98.7 million and generated $19.7 million of free cash flow [31][33] - Capital expenditures for 2024 were approximately $14.6 million, primarily for store maintenance and technology investments [32] Q&A Session Summary Question: Trends in same-store sales and performance in February - Management noted positive trends in February, continuing from January, despite a shift in holiday timing affecting Q1 [39][40] Question: Store opening plans and timing - One new store is planned to open at the end of Q3 or beginning of Q4 [44] Question: Free cash flow conversion from EBITDA guidance - Management expressed confidence in generating positive free cash flow through improved top-line profitability and inventory efficiency [46][48] Question: Trade down in firearms and market share opportunities - Management indicated that while average unit prices are down, they are focused on being in stock with the right products to meet customer demand [56][57] Question: Impact of tariffs on consumer behavior - Management stated that they have not seen significant changes in consumer behavior due to tariffs, attributing sales fluctuations to timing of promotions [61][62] Question: E-commerce growth and fulfillment - E-commerce sales accounted for over 17% of total business, with 75% of e-commerce demand fulfilled at store locations [91] Question: Gross margin outlook for 2025 - Management did not provide specific gross margin guidance but indicated potential for improvement through better inventory management and focus on core goods [94][96]