ASO
T3Academy Sports and Outdoors, Inc.
High Tax Refund '26: Recreation & ExperiencesRecreation '24: Sporting Goods RetailersShoes '26: Athletic Shoe RetailersShrinkage Long '25: Retailers Helped by SolutionsSporting Goods '26: Sports EquipmentStagflation Short '25: Consumer Demand CompressionWorld Cup '26: Sport & Americana Suppliers
OverviewAcademy Sports and Outdoors, Inc. is a U.S. retailer offering sporting goods, outdoor recreation products, apparel, and footwear through 324 stores across 21 st
Academy Sports and Outdoors, Inc. is a U.S. retailer offering sporting goods, outdoor recreation products, apparel, and footwear through 324 stores across 21 states and an e-commerce platform. It serves a broad customer base, with recent growth in higher-income consumers, while maintaining its value proposition. Key offerings span outdoor, sports & recreation, apparel, and footwear categories.
- What They Do (Plain English & Analogies)
- Academy Sports and Outdoors is a large retail store, much like a superstore for active lifestyles. Imagine a place where you can find almost everything you need for sports, outdoor adventures, and casual living. This includes equipment for team sports like baseball and basketball, gear for hunting, fishing, and camping, and a wide variety of athletic and everyday clothing, shoes, and accessories for the whole family. Essentially, they help people find the products to enjoy their hobbies and daily activities related to sports and the outdoors, acting as a one-stop shop for 'fun for all'.
- Very Brief History
- Academy Sports and Outdoors, Inc. was founded in 1938 as a family business in Texas. Over the decades, it has grown into a significant sporting goods and outdoor recreational products retailer in the United States, expanding its physical store presence and developing a robust e-commerce platform.
- "Street Stereotype"
- The 'street stereotype' for Academy Sports and Outdoors is often that of a value-oriented, regional sporting goods retailer primarily serving lower to middle-income consumers in its Southern and Midwestern footprint. Investors and analysts perceive it as a company navigating a challenging discretionary spending environment, particularly for its core customer base, but with promising self-help initiatives like new store expansion, e-commerce growth, and loyalty program enhancements aimed at driving consistent positive comparable store sales and attracting a broader customer demographic, including higher-income households.
- Subsidiaries On Linked In*
- Academy, Ltd. — Legal entity mentioned in financial context, not a distinct consumer-facing brand or division with a separate LinkedIn presence.; LinkedIn: n/m
- Customer Sectors & Example Clients
- Academy Sports and Outdoors primarily serves individual consumers across various demographics who are interested in sporting goods, outdoor recreation, and active lifestyle products. They do not have 'clients' in the traditional B2B sense, as their business model is direct-to-consumer. They are increasingly targeting higher-income consumers, while also focusing on their core 'AlwaysGain family' customer base.
- New Customers / Segments They'Re Targeting
- Academy Sports and Outdoors is actively targeting higher-income consumers, a segment that has been their largest and fastest-growing cohort since late 2024. They are attracting these customers by emphasizing value and expanding their assortment with premium brands like Jordan and Nike. Additionally, they are expanding into new product categories such as suppressors for shooting sports and leaning into lifestyle trends like work and western wear with brands like Ariat and Marriott shops, which appeal to a broader customer base beyond traditional sporting goods enthusiasts. The relaunch of their loyalty program with a co-branded Mastercard also aims to attract new members and increase engagement across all income levels.
- Supply Chain And Sourcing Geographies
- Academy Sports and Outdoors' supply chain involves importing a significant portion of its goods from overseas. The company has faced incremental tariffs on imported goods, particularly impacting costs in the first half of fiscal 2026. They have implemented mitigation strategies such as sourcing country diversification and inventory pull-forward. While specific countries are not named, the 'overseas' and 'tariffs' comments strongly suggest sourcing from various Asian manufacturing hubs, a common practice in the retail industry. The company also utilizes three distribution centers to support its operations.
- Sales Geographies And Expansion Plans
- Academy Sports and Outdoors currently operates more than 300 stores across 21 states in the United States. They also sell merchandise to customers nationwide through their e-commerce website, academy.com. The company plans to open 20 to 25 new stores in fiscal year 2026. In the first quarter of fiscal 2026, they opened two new stores in Canton, Ohio, and Muskogee, Oklahoma. For the second quarter, they plan to open three more stores in Altoona, Pennsylvania, North Knoxville, Tennessee, and Morristown, Tennessee. The remaining 15 to 20 stores are expected to open in the back half of the year, with a heavy focus on 'infill within our legacy and existing markets' (Texas, Oklahoma, Louisiana, Arkansas) and existing markets (states where Academy has been present for more than five years), rather than primarily expanding into entirely new states.
- How Key Themes May Help/Hurt
- The theme 'Retailers Helped by Solutions' is a significant tailwind for Academy Sports and Outdoors. Their expanded utilization of RFID technology, which now covers private branded apparel and footwear, is expected to improve in-stocks and mitigate shrink, directly contributing to gross margin improvement. This aligns with the 'Bull2: Early Tech Adoption' point, as they are proactively investing in modern security infrastructure. The 'Stagflation Short '25: Consumer Demand Compression' theme, however, presents a headwind. Persistent high gas prices and inflationary pressures are negatively impacting discretionary spending, particularly for lower- and middle-income consumers, leading to cautious shopping behavior and a focus on promotions. This aligns with 'Bull2: Consumer Fatigue in Non-Essentials' and 'Bull1: Pricing Pressure + Weakening Margins' as they navigate a challenging consumer environment where maintaining value is crucial to offset reduced purchasing power.
3 Main Long-Term Bull Details
- New Store Expansion and Performance: Academy's new stores are performing well, with those opened from 2022-2024 driving mid-single-digit comparable sales increases. The company plans to open 20-25 new stores in fiscal 2026, primarily infill locations in existing markets, which are expected to be strong performers and provide a growing tailwind to comparable sales as they mature.
- Omnichannel and Digital Transformation: The company is accelerating its digital transformation, with its .com business growing 17% in Q1 fiscal 2026. Key initiatives include expanding same-day delivery platforms (Uber Eats, Instacart, DoorDash) and migrating their search platform to be powered by Google's AI commerce search and Gemini Enterprise customer experience, which are expected to further propel digital sales and customer engagement.
- Unified Loyalty Program and Brand Expansion: The relaunch of the My Academy Rewards program, integrated with a new tiered credit card structure including a co-branded Mastercard, is designed to drive customer engagement, attract new customers, and increase share of wallet by offering significant value. This, coupled with the continued expansion of premium brands like Jordan and Nike, and growth in trending categories like work/western wear and suppressors, is expected to fuel growth.
3 Main Long-Term Bear Details
- Persistent Macroeconomic Headwinds: The company anticipates a 'challenging economic backdrop' and 'muted backdrop for discretionary consumer spending' to continue into 2026, particularly affecting lower- and middle-income consumers due to inflationary pressures and concerns about consumer financial health, including rising credit card delinquencies. High gas prices are a significant headwind, pulling billions from discretionary spending monthly.
- Tariff and Sourcing Cost Pressures: Inflationary pressures on goods imported from overseas, driven by tariffs, are expected to continue through the first half of 2026. While the company has implemented mitigation strategies, these ongoing costs can impact gross margins and necessitate strategic average unit retail (AUR) increases, potentially affecting value perception if not carefully managed.
- Dependence on Discretionary Spending: As a retailer of sporting goods and outdoor recreational products, Academy's performance is highly sensitive to consumer discretionary spending. Prolonged economic uncertainty, high gas prices, or other factors that reduce disposable income could continue to suppress demand, making it challenging to achieve consistent positive comparable sales growth despite internal initiatives. The company notes a 'bifurcated consumer environment' where lower-income consumers remain under pressure.
- Competitors And Differentiation
- Academy Sports and Outdoors competes with other sporting goods retailers and general merchandise stores. Their differentiation strategy centers on being a 'steward of value' for their customers, offering compelling assortments at strong value. They aim to maintain their position as a value provider in the sports and outdoor space. Key differentiators include their relaunched My Academy Rewards loyalty program, which offers a tiered structure including a co-branded Mastercard that provides 5% off Academy purchases and 2% back on all outside spend redeemable at Academy, a feature they highlight as 'best in market' compared to competitors. They also focus on exclusive partnerships, such as being the exclusive brick-and-mortar partner in the U.S. for 80 races training equipment, and expanding 'better/best' brands like Jordan and Nike.
- Recent Performance & What The Market'S Focused On
- Academy Sports and Outdoors reported a solid start to fiscal Q1 2026, with net sales of $1.44 billion, up 6.7%, and comparable sales up 2.9%. This was driven by positive traffic and an increase in average unit retail. E-commerce sales grew 17%. Gross margin was 33.2%, down 71 basis points year-over-year, primarily due to tariffs. Diluted EPS was $0.80, and adjusted EPS was $0.93. The company raised its annual sales guidance to +3% to +5% (or flat to +2% comp sales) for fiscal 2026. The market is focused on the ongoing impact of high gas prices and inflationary pressures on consumer discretionary spending, particularly for lower-income households. Key initiatives being watched include the relaunch of the My Academy Rewards program, new store expansion, e-commerce growth driven by AI-powered search, and the tailwinds from events like the World Cup and America's 250th birthday.
- Revenue Segments And Estimated Mix
- Outdoor — Mix: n/m; Source: Q1 Fiscal 2026 earnings transcript; Trend: Up 12% in Q1 Fiscal 2026, driven by strength in fishing and shooting sports categories (ammo and firearms).
- Sports and Recreation — Mix: n/m; Source: Q1 Fiscal 2026 earnings transcript; Trend: Up 6% in Q1 Fiscal 2026, driven by solid gains in baseball and collectible trading cards.
- Apparel — Mix: n/m; Source: Q1 Fiscal 2026 earnings transcript; Trend: Up 5% in Q1 Fiscal 2026, with strength in outdoor and work businesses, supported by expanded assortments from Carhartt, Berlevo, Levi's, and Magellan Outdoors.
- Footwear — Mix: n/m; Source: Q1 Fiscal 2026 earnings transcript; Trend: Up 3% in Q1 Fiscal 2026, driven by cleated business (baseball) and summer seasonal businesses (Crocs and Birkenstock), with momentum in performance running.
- Product Brands
- Academy Sports + Outdoors
- Magellan Outdoors
- BCG
- O'rageous
- Outdoor Gourmet
- Freely
- Roll
- Jordan
- Nike
- Nike Vomero
- Adidas EVO SL
- New Balance Ellipse
- Brooks Glycerin
- Crocs
- Birkenstock
- Carhartt
- Berlevo
- Levi's
- Ariat
- Hoka
- Brunt
- Turtlebox
- 80 races
Bull / Bear DetailsAcademy Sports and Outdoors delivered a strong Q1, raising annual guidance, yet faces persistent macroeconomic headwinds from high gas prices and bifurcated con
Thesis
Academy Sports and Outdoors delivered a strong Q1, raising annual guidance, yet faces persistent macroeconomic headwinds from high gas prices and bifurcated consumer confidence. While strategic initiatives like new store expansion and loyalty program enhancements show promise, the expected deceleration in comparable sales post-Q1 and ongoing tariff impacts suggest these efforts may be insufficient to fully offset a cautious discretionary spending environment. The bear case remains more compelling as of 2026-06-11.
Bull case
New store expansion remains a key growth driver, with 2 new stores opened in Q1 and 15-20 more planned for the back half of 2026. These new vintages continue to perform well, with sales comping in the high single digits, providing a tangible and accelerating tailwind for future growth.
The e-commerce business demonstrated strong 17% growth in Q1, supported by expanding same-day delivery platforms (Uber Eats, Instacart) and the upcoming migration to Google's AI commerce search. The relaunched My Academy Rewards program is also seeing an uplift in sales and aims to add 2 million new members this year.
Strategic category and brand expansions, such as the rollout of suppressors (100% accretive) to over 100 stores and approximately 100 Ariat shops, coupled with continued mid-single-digit growth in the combined Nike and Jordan business, are driving market share gains and attracting new customers.
Bear case
Persistent high gas prices and other inflationary pressures are expected to negatively impact discretionary spending for the American consumer throughout the year. The consumer environment remains bifurcated, with lower-income cohorts still under pressure, leading to a cautious spending approach and a slowdown in Q2.
Gross margin compression remains a significant concern, with Q1 experiencing a 110 basis point headwind from tariffs. While this impact is expected to subside, the need to attract cautious consumers through promotions could continue to pressure profitability despite the anticipated $10.5 million tariff refund.
Despite a strong Q1, management expects it to be the strongest comp quarter of the year, implying a deceleration in comparable sales for the remaining quarters. The effectiveness of strategic initiatives in fully offsetting external headwinds and the potential for execution risks in new programs remain key uncertainties.
Bull / Bear Case
- Bear Case
- Academy Sports and Outdoors faces persistent macroeconomic headwinds, with high gas prices and inflationary pressures expected to negatively impact discretionary spending throughout the year, particularly for lower-income consumers. Management noted a slowdown in Q2, with comparable sales tracking flat through Memorial Day, indicating a significant deceleration from Q1. Gross margin compression remains a concern, with Q1 experiencing a 110 basis point headwind from tariffs, and while expected to subside, promotional activity to attract cautious consumers could continue to pressure profitability. The expectation that Q1 will be the strongest comp quarter implies a challenging environment for the remainder of the year, with execution risks for new initiatives in offsetting these broader economic pressures.
- Bull Case
- Academy Sports and Outdoors demonstrates strong internal momentum, evidenced by a 2.9% comparable sales increase in Q1 2026 and a raised annual sales guidance of +3% to +5%. New store expansion remains a key growth driver, with 2 new stores opened in Q1 and 15-20 more planned for the back half of the year, consistently delivering high single-digit comparable sales. The e-commerce business is robust, growing 17% in Q1, supported by expanded same-day delivery and upcoming AI-powered search. Strategic category and brand expansions, including suppressors and Ariat shops, along with continued mid-single-digit growth in Nike and Jordan, are driving market share gains. The relaunched My Academy Rewards program is seeing increased enrollment and is expected to significantly boost customer engagement and spending power.
- More Compelling & Why
- Bear. While the forward P/E of 8.33x (hypothetical) suggests a low valuation, the bear case is more compelling given management's explicit expectation that Q1's 2.9% comparable sales will be the strongest of the year, implying significant deceleration. The observed slowdown to flat comps in Q2 post-Memorial Day, coupled with persistent high gas prices and bifurcated consumer confidence, suggests that the market may still be underestimating the severity and duration of these macro pressures on discretionary spending. What would flip my view to Bull is if ASO reports Q2 comparable sales at the high end of its full-year guidance (closer to +2%) and shows clear evidence that its loyalty program and new store initiatives are significantly offsetting macro headwinds, leading to an upward revision of full-year comp guidance.
Key Factors
| Key Factor | Why It Matters | What To Watch | What It Signals | Where/How To Track | Free Alt Data | Paid Alt Data |
|---|---|---|---|---|---|---|
| Gross Margin Rate Compression from Tariffs and Promotions | Gross margin is a key profitability driver. Persistent tariff impacts, increased promotional activity due to cautious consumers, or inability to realize expected tariff refunds would compress margins and negatively impact earnings, confirming a bearish outlook. | Reported gross margin rate for Q2 2026. Management commentary on the actual impact of tariffs and promotional activity, and the realization of the $10.5 million tariff refund (expected in Q2 2026, with no recognition in Q1). | Bearish if Q2 2026 gross margin rate falls below expectations (given Q1 was 33.2% and H1 is expected to have pressure), or if management indicates higher-than-anticipated promotional intensity or further delays/reductions in the $10.5 million tariff refund. | Company Q2 2026 earnings release and conference call (expected August/September 2026). | Numerator / 1010Data: SKU-level price elasticity and promotions for ASO and competitors. | |
| Comparable Sales Growth Performance (Q2 Fiscal 2026) | Comparable sales directly reflect consumer demand and the effectiveness of ASO's growth initiatives. A slowdown or decline below guidance would confirm bearish macroeconomic headwinds and indicate deeper underlying demand issues. | Reported comparable sales figures for Q2 2026. Management commentary on comp trends for the remainder of Q2, especially post-Memorial Day and leading into Father's Day and July 4th, given the Q2 start was 'roughly flat comp' through Memorial Day. | Bearish if Q2 2026 comparable sales fall below the low end of the updated full-year guidance range (flat comp), or if management indicates further deceleration in comp trends for Q3/Q4, suggesting initiatives are not effectively offsetting headwinds. | Company Q2 2026 earnings release and conference call (expected August/September 2026). | Placer.ai: Store foot traffic % change YoY for ASO locations. Earnest Analytics: Transaction data for ASO, tracking sales trends. | |
| Weakening Consumer Spending from Lower/Middle-Income Cohorts | A significant portion of ASO's traditional customer base is lower to middle-income. Continued financial strain in this cohort directly impacts traffic, basket size, and overall sales, potentially offsetting gains from higher-income customers. | Management commentary in Q2 2026 earnings regarding traffic and spending patterns of consumers with household incomes under $50,000. Specifically, if traffic declines revert to high single digits or worsen, or if average transaction value (ATV) for this cohort decreases. Also, monitor consumer confidence indices. | Bearish if ASO reports worsening traffic trends (e.g., reverting to high single-digit declines) and reduced basket sizes from lower-income customer segments in Q2 2026, or if consumer confidence indices show a sustained decline below current levels (e.g., May 2026 index of 93.1). | Company Q2 2026 earnings call (expected August/September 2026), investor presentations. The Conference Board Consumer Confidence Index (monthly releases). | Conference Board Consumer Confidence Index (monthly releases from The Conference Board website). | Earnest Analytics / Affinity: Card spend data by income cohort, tracking transaction frequency and average order value for lower-income segments. Placer.ai: Store foot traffic % change YoY, segmented by store location demographics. |
| Effectiveness of My Academy Rewards Mastercard Relaunch | This initiative is crucial for driving customer engagement, retention, and sales, especially in a challenging consumer environment where value is paramount. It aims to offset external pressures and enhance customer loyalty. | Completion of new card reissuance to existing cardholders by the end of June 2026. Progress towards adding 2 million new members to the loyalty program by year-end 2026 (totaling over 15 million members). Continued 'uplift in sales' and 'increased card utilization' as reported by management. | Bearish if management reports lower-than-expected sign-ups, limited impact on customer spend, or a failure to significantly boost sales from loyalty members, indicating the initiative is not effectively offsetting external pressures or meeting the 2 million new member goal by year-end 2026. | Company Q2 and Q3 2026 earnings calls and associated press releases. | Earnest Analytics: Credit card spend data for ASO, specific to loyalty program members vs. non-members. | |
| Rising Credit Card Delinquency Rates | High and rising credit card delinquencies directly indicate consumer financial distress, leading to reduced discretionary spending, which negatively impacts retailers like ASO, particularly their lower-income customer base. | Federal Reserve data on credit card delinquency rates (e.g., Delinquency Rate on Credit Card Loans, All Commercial Banks - DRCCLACBS) for Q2 2026. The Q1 2026 rate was 2.92%. | Bearish if the delinquency rate on credit card loans (DRCCLACBS) increases above 2.92% in Q2 2026, signaling sustained consumer financial distress that will negatively impact discretionary retail spending. | Federal Reserve Bank of St. Louis (FRED) website, series DRCCLACBS (typically quarterly releases). | TransUnion/Experian: Consumer credit health reports, delinquency rates by income cohort. |
Key Reported Metrics, Reratings Triggers & ResultsQ1 saw significant tariff impact, expected to subside. Maintaining the full-year guidance of 34.5%-35% will depend on managing tariffs, promotional activity, an
| Key reported metrics | Rerating thresholds | Earnings results | ||||||
|---|---|---|---|---|---|---|---|---|
| Metric | Last period | Why it matters | What's needed for rerating | Rerating context | Earnings date | Actual reported | Hit target? | Notes |
| Gross Margin Rate | down 0.71% | Q1 saw significant tariff impact, expected to subside. Maintaining the full-year guidance of 34.5%-35% will depend on managing tariffs, promotional activity, and shrink. Its performance will signal profitability and cost management. | The Gross Margin Rate needs to fall below 34.5% for the stock to experience a lower rerating (bearish confirmation). The company's full-year 2026 guidance for gross margin is 34.5% to 35.0%. A rate below this guided range would signal a failure to meet expectations. | A Gross Margin Rate below the guided range would confirm the bear thesis that persistent macroeconomic pressures, inflationary costs, and tariffs are compressing margins. This indicates the company's inability to effectively manage these headwinds, directly impacting profitability and valuation, and strengthening the short thesis. | ||||
| .com Business Growth | +17% | E-commerce is a strong and accelerating growth engine. Continued double-digit growth, driven by expanded delivery and AI search, is vital for overall sales momentum and customer engagement, especially in a cautious consumer environment. | For a lower rerating (bearish confirmation), Academy Sports and Outdoors' .com Business Growth metric would need to fall below 10%. This would represent a significant deceleration from the 13.6% growth achieved in fiscal year 2025 and indicate a failure to maintain momentum in a key growth area, especially given broader sporting goods e-commerce market growth projections of 8-9%. | A deceleration in .com business growth below 10% would undermine the investment thesis that e-commerce is an accelerating growth engine for ASO. It would signal that the company's digital transformation efforts and investments are failing to offset macroeconomic pressures and competitive headwinds, leading to concerns about future profitability and market share. | ||||
| Comparable Sales | +2.9% | This metric is crucial as the company aims for positive comparable sales in 2026. Given Q1's strong performance and Q2's anticipated challenges from gas prices, its trajectory will indicate the effectiveness of strategic initiatives and consumer health. | For a lower rerating (bearish confirmation), Academy Sports and Outdoors' comparable sales for Q1 2026 would need to fall below its preliminary guidance of +2%. A more significant bearish confirmation would be comparable sales turning negative, especially below the -1% low end of the company's initial full-year fiscal 2026 guidance. | Comparable sales are crucial as they directly reflect consumer demand and the effectiveness of ASO's growth initiatives. Falling below the preliminary positive Q1 guidance, or turning negative, would confirm the bearish thesis of persistent macroeconomic headwinds and weakening consumer spending, signaling deeper demand issues and negatively impacting future revenue and profitability expectations. | ||||
Key QuestionsWill the observed slowdown in consumer spending and flat comparable sales through Memorial Day in Q2 2026, driven by persistent high gas prices and pressure on
Will the observed slowdown in consumer spending and flat comparable sales through Memorial Day in Q2 2026, driven by persistent high gas prices and pressure on lower-income consumers, cause Academy Sports and Outdoors to report Q2 comparable sales at the low end or below its updated full-year guidance range of flat to +2%?
- Question 2
Despite the expected subsiding of tariff pressure and the recognition of a $10.5 million tariff refund in Q2 2026, will Academy Sports and Outdoors' gross margin rate remain pressured and fall below its full-year guidance range of 34.5% to 35.0% due to increased promotional activity to attract cautious consumers or other unforeseen cost pressures?
- Question 3
Will the relaunched My Academy Rewards program and co-branded Mastercard, despite management's optimism and reported double-digit enrollment growth, fail to significantly boost customer spend and retention in Q2 2026, thereby not providing the anticipated tailwind to sales and failing to offset broader consumer spending headwinds?
Earnings Transcript Summary
· 2026Q1 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 1. **New Store Expansion:** Management views new store expansion as their number one growth lever, with 2 new stores opened in Q1 and plans for 15-20 more in the back half of the year, building critical mass and accelerating tailwinds as new vintages enter the comp base. 2. **Improving Productivity of Existing Businesses:** This includes the relaunch of the My Academy Rewards program with a new tiered structure and co-branded Mastercard, expanding same-day delivery platforms (Uber Eats, Instacart), and migrating their search platform to Google's AI commerce search and Gemini Enterprise for enhanced customer experience. 3. **Maintaining Value Proposition Amidst Inflationary Pressures:** Management is committed to remaining a steward of value for customers, leveraging their value-driven positioning to attract higher-income consumers trading down, while acknowledging persistent high gas prices and other inflationary pressures impacting discretionary spending. | The overall tone of the call was cautiously optimistic. Academy Sports and Outdoors delivered a solid Q1, returning to positive comparable sales with broad-based growth across categories and a strong 17% increase in its .com business. Management acknowledged persistent macroeconomic pressures and the negative impact of high gas prices on consumer discretionary spending, particularly for lower-income households. However, they expressed confidence in their strategic initiatives, including new store expansion, the relaunch of the My Academy Rewards program, omnichannel enhancements, and new category introductions like suppressors, to drive continued growth and achieve their updated full-year guidance. The company's value proposition was highlighted as a key differentiator in the current environment, attracting higher-income consumers. | Total Sales: +2.5%; Comparable Sales: -1.6%; eCommerce sales: +13.6% (FY25); Merchandise Division Sales - Outdoors: +3.1% (Q3 2025); Merchandise Division Sales - Sports and recreation: +4.2% (Q3 2025); Merchandise Division Sales - Footwear: +2.4% (Q3 2025); Merchandise Division Sales - Apparel: +2.4% (Q3 2025) | 1. **Impact of Gas Prices and Q2 Comp Expectations:** Analysts inquired about the impact of gas prices on consumption patterns and if Q2 would still be the weakest comp quarter. Management acknowledged gas prices as a headwind, causing a slowdown in Q2 with comps tracking flat through Memorial Day. However, they expressed optimism for Q2 due to upcoming initiatives like the World Cup, credit card relaunch, and America's 250th birthday. 2. **Gross Margins, Specifically Tariff Impact and Ammo Mix:** Analysts questioned the contribution of ammo (a lower-margin category) to gross margin pressure and the cadence of tariff impacts. Management clarified that 110 basis points of the 71 basis point gross margin degradation was due to tariffs, partially offset by shrink and shipping favorability. They stated that Q1 would have the largest tariff impact, which would subside throughout 2026. Ammo was a headwind but offset by other mix factors. 3. **Sustainability of Nike/Jordan Growth and Regional Trends:** Analysts asked for an update on Nike and Jordan trends and regional performance, including NBA championships. Management stated the combined Nike/Jordan business was up mid-single digits and expected this trend to continue, with further expansion of Jordan Brand shops. They noted licensed team business (including World Cup and Spurs) was a tailwind, expecting it to persist through the summer. | Total sales: +6.7% to $1.44 billion; Comparable sales: +2.9%; .com business: +17%; Outdoor category: +12%; Sports and recreation: +6%; Apparel sales: +5%; Footwear sales: +3% |
· 2025Q4 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 1. **New Store Expansion:** Management views new store expansion as their number one growth opportunity, having successfully opened 24 new stores in fiscal 2025 that are tracking to exceed year one performance, with plans for 20-25 more in fiscal 2026. 2. **Digital Transformation and E-commerce Growth:** The company is accelerating its digital transformation, evidenced by 13.6% growth in its .com business in fiscal 2025, and plans to implement AI-based semantic search, integrate with leading AI platforms, expand online assortment through drop-ship partnerships, and empower store teams with new handheld devices. 3. **Loyalty Program Relaunch and Integration:** Academy is relaunching its credit card and integrating it with the My Academy Rewards program in Q2 2026 to create a unified, tiered loyalty program with expanded benefits, aiming to deepen customer engagement and drive value. | The overall tone of the call was cautiously optimistic. Management acknowledged a challenging macroeconomic backdrop for the lower- and middle-income consumer, with continued inflationary pressures and potential impacts from gas prices. However, they expressed strong confidence in their strategic initiatives, including new store expansion, digital transformation, the loyalty program relaunch, and assortment diversification, to drive top-line sales growth of 2% to 5% and a return to positive comparable sales in fiscal 2026. They also highlighted external tailwinds such as higher tax refunds, the World Cup, and the 250th anniversary of the United States, which are expected to contribute to growth. The call conveyed a sense of disciplined execution and a clear roadmap for future growth despite external headwinds. | Net Sales: +3.0%; Comparable Sales: -0.9%; eCommerce sales: +22.2%; New stores (comping): high single digits; Merchandise Division Sales - Outdoors: +3.1%; Merchandise Division Sales - Sports and recreation: +4.2%; Merchandise Division Sales - Footwear: +2.4%; Merchandise Division Sales - Apparel: +2.4%; Merchandise Division Sales - Other Sales: +2.2%; Total Merchandise Sales: +3%. | 1. **Sales Performance and Underlying Trends (including January weather impact and ammo sales):** Analysts questioned the impact of January store closures on Q4 performance and the underlying sales trend. Management responded that January weather was a 100 basis point headwind to Q4 comps, but the business rebounded, and Q1 was running positive comps across all divisions. They noted ammo sales improved in Q4 and accelerated with recent global events. 2. **Path to Consistent Positive Comps:** Analysts inquired why it was taking longer to achieve consistent positive comparable sales despite various initiatives. Management attributed the delay primarily to persistent macroeconomic pressure on the consumer in 2025 but expressed confidence that a combination of self-help initiatives (e-commerce growth, new stores, loyalty program, brand expansion) and external tailwinds (tax refunds, World Cup, 250th anniversary) would drive a return to positive comps in 2026. 3. **SG&A Growth and Operating Costs:** Analysts asked about the expected SG&A growth for 2026, particularly if the pivot to higher-income customers and premium brands was driving increased operating expenses. Management clarified that the main driver of SG&A growth in 2025 was new store increases, and with a similar number of new stores planned for 2026, they expect modest SG&A leverage. They emphasized that they remain a value retailer and are not seeing an elevated operating cost model from diversifying their assortment. | Total Sales: +2.5%; Comparable Sales: -1.6%; .com business: +13.6% (FY25); New stores (2022-2024 vintage): mid-single-digit comp increases (FY25); Nike and Jordan combined: high single digits (FY25). |
Transcript Tidbits
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| Academy Sports and Outdoors is expanding its eligible market through several initiatives. The company opened two new stores in Canton, Ohio, and Muskogee, Oklahoma, in Q1, supporting its strategy of growing in underserved mid-sized markets. It plans to roll out the suppressors category to over 100 stores by year-end, which is a new and accretive business. The company will also add approximately 100 Ariat shops in the back half of the year, leaning into the work western lifestyle trend. Additionally, 55 Jordan Brand shops will be added to apparel pads in Q2, bringing the total to 200 stores. The .com business saw a 17% growth in Q1, and the company is expanding its same-day delivery platforms to include Uber Eats and Instacart, complementing its existing DoorDash partnership. The search platform on its website will be powered by Google's AI commerce search and Gemini Enterprise customer experience by back-to-school. The relaunch of the My Academy Rewards program, integrated into a three-tiered loyalty ecosystem, aims to add an additional 2 million new members this year, growing the total loyalty program to over 15 million members. The new co-branded MyAcademy Rewards Mastercard offers 2% back on all outside spend, redeemable at Academy, which is perceived as a strong value proposition. | Academy Sports and Outdoors has grown market share in the firearms category for eight consecutive quarters. The company's new My Academy Rewards Mastercard offers 2% back on all spend outside of Academy, which can be redeemed at Academy, a feature noted as 'best in market' compared to most competitive offers that only allow redemption for future in-brand purchases. The company attributes its momentum and market share gains to progress against its core growth strategies. | The broader industry is experiencing persistent high gas prices and other inflationary pressures, which are expected to negatively impact discretionary spending for the American consumer throughout the remainder of the year. The consumer environment remains pressured, with high gas prices largely offsetting the benefit of tax refunds in Q1, particularly for lower-income households. Consumer confidence is bifurcated, with higher confidence among upper-income households compared to lower-income cohorts. The suppressors category is rapidly growing in the industry, driven by changes in law making it easier to procure. The collectible trading card business is also seeing rapid growth, benefiting from increased investment in this category. External tailwinds include the World Cup being played in venues across Academy's footprint and America's 250th birthday, both expected to maximize opportunities in Q2. | Academy Sports and Outdoors is raising its annual sales guidance to +3% to +5%, translating to a flat to +2% comparable sales increase for fiscal 2026. The company now expects sales in the range of $6.23 billion to $6.35 billion, with diluted EPS of $5.95 to $6.35 and adjusted EPS of $6.40 to $6.80. Gross margin rate guidance is maintained at 34.5% to 35% for the year, with modest pressure expected in the first half due to tariffs, followed by modest expansion in the back half. SG&A is expected to leverage in the first half and potentially deleverage in the back half as new store openings accelerate, ultimately leading to modest leverage for the full year. The company plans to open 3 more stores in Q2, with the remaining 15 to 20 stores expected in the back half of the year, primarily in legacy and existing markets. For 2027 and beyond, a more balanced mix of store openings between the first and second halves of each year is expected. The company will migrate its search platform to be powered by Google's AI commerce search and Gemini Enterprise customer experience by back-to-school, anticipating continued sales momentum from its online capabilities. The Q1 comp of 2.9% is expected to be the strongest quarter of the year. | Retailers | AI (Artificial Intelligence), Omnichannel, Loyalty Programs, Lifestyle Trends (Work & Western, Baseball Lifestyle Culture). | We were pleased to move back to comp store growth in Q1, with sales coming in at $1.44 billion which was up 6.7% in total sales and translated into a 2.9% comp increase. Our firearms business also continues to be a bright spot. Since suppressors are totally new to our assortment, this business should be 100% accretive. Our .com business comping up 17%. Enrollment in myAcademy Rewards is up double digits year over year. Based on the solid start to the year, we are raising our annual sales guidance to be +3% to +5%. Diluted earnings per share was 80 cents an increase of 17.6%. We think Nike is a growth engine for us. I am fairly confident we are gonna beat that number this year. | Units per transaction were down slightly, which we would attribute to the increased AUR. high gas prices and other inflationary pressures will persist and continue to negatively impact discretionary spending for the American consumer. gross margin for the quarter was 33.2%, down 71 basis points year over year. The decline was driven by tariffs. The consumer environment remains pressured as high gas prices largely offset the benefit of tax refunds. Consumer confidence remains bifurcated. We expect the first quarter to be the largest tariff impact for the year. I would say as we have gotten into Q2, we have seen a little bit of a slowdown from the consumer. I think it is going to be a cautious consumer out there. I think that fuel will be a bigger headwind as it relates to Q2 and perhaps Q3 and beyond? |
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
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| Academy Sports and Outdoors saw 13.6% growth in its .com business in 2025 and considers new store expansion its number one growth opportunity, having opened 24 new stores that are exceeding year one performance. The company is expanding its assortment with in-demand brands like Jordan, Converse, Birkenstocks, Perliville 101, Turtlebox speakers, and Ray-Ban Metas. The My Academy Rewards loyalty program has grown to over 13 million customers, and the company observed a 10% growth in customers with household incomes over $100,000, diversifying its customer base. For 2026, Academy is accelerating its digital transformation with an AI-based semantic search platform, working with OpenAI and Google to surface products in their ecosystems, and growing its online assortment through drop-ship partnerships and third-party storefronts. A significant initiative is the relaunch of the Academy credit card in Q2, creating a unified three-tier loyalty program, including a new My Academy Rewards Mastercard that offers rewards for spending outside of Academy. The company plans to expand its Jordan Brand Shop concept to an additional 55 stores, bringing the total to over 200, and will expand higher-level Nike fashion in all stores and online. Academy is also rapidly growing its work and western wear offering with brands like Carhartt, Wrangler, Ariat, Hooey, and Brunt, and is the exclusive brick-and-mortar partner in the U.S. for 80 races, bringing their training equipment to over 70 doors. They are also pushing into the baseball lifestyle culture with new brands and accessories. The company plans to open 20 to 25 new stores in 2026, primarily infill within existing markets. | Academy Sports and Outdoors achieved solid market share gains across its footprint in 2025. The company improved its value perception with customers relative to key competitors while raising average unit retails. Management emphasized their commitment to maintaining their position as the value provider in the sports and outdoor space. The relaunched My Academy Rewards Mastercard is highlighted as a competitive advantage, offering rewards for spending both within Academy and on external purchases like groceries and gas, which can then be redeemed at Academy, unlike most retailers' cards that only offer rewards for in-brand spending. Academy is also the exclusive brick-and-mortar partner in the U.S. for 80 races. The company believes its successful launch of the Jordan brand demonstrated its capability to Nike and other vendors, serving as a proof point for attracting new high-profile brands. | The broader industry faced a choppy environment in 2025, with customer spending patterns softening in December before surging pre-Christmas, and January being softer due to large winter storms. Inflationary pressures on imported goods were a significant factor, with tariffs levied in late Q1 and Q2 of 2025 impacting costs. The company anticipates a continued muted backdrop for discretionary consumer spending and expects macroeconomic pressures from the back half of 2025 to persist into 2026, with inflationary pressures on goods sourced outside the U.S. continuing through the first half of the year. External tailwinds for 2026 include higher income tax refunds, which historically benefit categories like firearms and work boots; the World Cup coming to the U.S. this summer, expected to increase tourism, foot traffic, and youth soccer participation; and the 250th anniversary of the United States, which traditionally drives strong sales of patriotic merchandise. Emerging lifestyle trends like work and western wear, 80 races, and baseball lifestyle culture are noted as hot trends. The economic health of the American consumer is identified as the primary headwind, with credit card delinquencies doubling in 2024 and expectations for weak job growth in 2026. High gas prices are seen as detrimental to discretionary spending, though higher oil prices can be a tailwind for employment in the oil patch, particularly in Texas. The lower-income consumer (under $50k household income) is under pressure, opting out or trading down, and experiencing high single-digit traffic declines. | Academy Sports and Outdoors has an Analyst Day planned for April 7 in New York City to detail its long-range plan and investments for 2025 and 2026. The company expects foundational building blocks from 2025 to drive sales in 2026 and beyond, with new store tailwinds growing as 2025 vintage stores enter the comp base. Sales guidance for 2026 is 2% to 5% total growth, translating to negative 1% to positive 2% comparable sales, with a midpoint of positive 0.5%. This guidance assumes a continued muted discretionary consumer spending backdrop at the low end, and an improvement in consumer health aided by macro events at the high end. Gross margin is expected to range from 34.5% to 35.0%. GAAP net income is projected between $380 million and $415 million, and adjusted net income between $410 million and $445 million. GAAP diluted EPS is estimated at $5.65 to $6.15, and adjusted diluted EPS at $6.10 to $6.60. The company anticipates generating $250 million to $300 million of adjusted free cash flow after investing $200 million to $240 million in capital expenditures. Q1 2026 is off to a positive comp sales start and is expected to be the strongest quarter. Q2 may be challenging due to lapping strong prior-year comps and the Jordan brand launch, but tailwinds from the new My Academy Rewards Mastercard, Jordan Brand Shop expansion, World Cup, increased tax refunds, and America's 250th anniversary are expected. Positive momentum from the first half is anticipated to carry into the second half, though tariffs and prolonged high gas prices remain potential headwinds. The 20 to 25 new store openings in 2026 will be more back-half weighted. | Retailers | AI (Artificial Intelligence), Omnichannel, Loyalty Programs, Lifestyle Trends (Work & Western, Baseball Lifestyle Culture). | “I am proud of how our team executed in a choppy environment. We navigated through all the challenges in 2025 while still growing top line sales to $6,050,000,000, or up 2%, which resulted in solid market share gains across our footprint.” “Another key accomplishment was the 13.6% growth we drove in our .com business.” “new store expansion remains our number one growth opportunity. During the year, we successfully opened up 24 new stores, which in aggregate are tracking to exceed their year one performance.” “The end result was improvement in store in-stocks across the company by 500 basis points, which had a major impact on overall customer satisfaction along with improving conversion.” “Finally, all these efforts combined to help us drive new customers in our stores, which was evidenced by the 10% growth we saw in consumers whose household income is over $100,000 a year.” “through the first seven weeks of the quarter we are running a positive comp.” “We expect the momentum we started to build in our .com results in 2025 will continue to propel the business forward.” “We are optimistic as we head into the new fiscal year and believe we have made the right investments and strategic decisions.” | “January was softer than we anticipated, primarily driven by the large winter storms in the last ten days of the month, which caused roughly half of our stores to be partially or fully shut down for two to three days.” “The low end of our guidance contemplates a continued muted backdrop for discretionary consumer spending.” “Our belief is that most of the macroeconomic pressures the consumer faced in the back half of 2025 will carry into 2026.” “In particular, inflationary pressures on goods sourced outside of the U.S. should continue through the first half of the year.” “We expect the macroeconomic backdrop to be challenging for the lower- and middle-income consumer” “The primary headwind is the economic health—the financial health—of the American consumer.” “I am seeing credit card delinquencies at double what they were in 2024. I feel job growth in America is not going to be strong in 2026. I think that gas staying high—we are just really conscious of a headwind associated with financial health.” “At the lower end, we continue to see probably a high single-digit decline in those lower-income consumers” |
Upcoming Events
| Catalyst ID | Estimated Timing | Estimated Date Start | Estimated Date End | Catalyst | Why It Matters | Ticker Or Theme Specific | Transcript Date | Source Type |
|---|---|---|---|---|---|---|---|---|
| ASO_24c1c67f | as we lap the increased tariff costs in the back half of the year | 2026-07-01 | 2026-12-31 | Lapping of increased tariff costs from the prior year. | This is expected to lead to prices settling at new levels, potentially easing cost pressures and stabilizing gross margins in the second half of the year. | Theme | 2026-03-17 | earnings_transcript |
| ASO_f8e08149 | this summer | 2026-06-01 | 2026-09-30 | The World Cup being hosted in the U.S. with approximately 30 matches played within Academy's footprint. | Expected to increase tourism and foot traffic in Q2, providing a sales lift for licensed team and tailgating businesses, and potentially driving increased youth soccer participation in the back half of 2026 and into 2027. | Theme | 2026-03-17 | earnings_transcript |
| ASO_2cd66dbf | 2026 is the 250th anniversary | 2026-06-01 | 2026-08-31 | The 250th anniversary of the United States. | Traditionally drives strong sales in patriotic merchandise over the summer, with this year expected to be even stronger due to national pride. | Theme | 2026-03-17 | earnings_transcript |
| ASO_fe9659e4 | in 2026 | 2026-01-01 | 2026-12-31 | Opening of 20 to 25 new Academy Sports + Outdoors stores, with a back-half weighting. | New store expansion is a primary growth opportunity, with these stores expected to be strong performers and contribute to overall sales growth, further boosted as 2025 vintage stores roll into the comp base. | Ticker | 2026-03-17 | earnings_transcript |
| ASO_e63ae2bd | During the second quarter... The remaining 15 to 20 stores are expected to open in the back half of the year | 2026-04-01 | 2026-12-31 | Opening of 3 new stores in Q2 and 15-20 additional new stores in the back half of fiscal 2026. | New store expansion is the company's primary growth lever, and successful openings will provide a tailwind to sales and contribute to overall growth, particularly as they enter the comp base. | Ticker | 2026-06-09 | earnings_transcript |
| ASO_313e3bb5 | roll amount to over 100 stores by the end of the year | 2026-06-11 | 2026-12-31 | Expansion of the suppressors category to over 100 stores by year-end. | This new category is expected to be 100% accretive, with strong attachment rates and high average unit retails, providing an additional tailwind to the shooting sports category. | Ticker | 2026-06-09 | earnings_transcript |
| ASO_7c4a8c2f | in the back half of the year | 2026-07-01 | 2026-12-31 | Addition of roughly 100 Marriott shops within stores. | This initiative supports the work western lifestyle trend and is expected to fuel growth in the apparel category. | Ticker | 2026-06-09 | earnings_transcript |
| ASO_a7a7df5f | World Cup being played in venues across our footprint... Kicks off on Thursday... continue into July as the World Cup plays out. ... America's 250th birthday ahead of us. | 2026-06-12 | 2026-07-31 | Sales impact from the World Cup (kicking off June 12th) and America's 250th birthday (around July 4th). | These events are expected to be non-comp tailwinds, driving incremental sales of World Cup gear, summer essentials, and patriotic merchandise. | Ticker | 2026-06-09 | earnings_transcript |
| ASO_11c40076 | as we turn the corner into back-to-school | 2026-07-01 | 2026-08-31 | Migration of the e-commerce search platform to be powered by Google's AI commerce search and Gemini Enterprise customer experience. | This technology upgrade is expected to improve online capabilities and customer experience, contributing to continued e-commerce sales momentum and overall comparable sales. | Ticker | 2026-06-09 | earnings_transcript |
| ASO_15ddc447 | modest gross margin pressure in the first half of 26 followed by modest expansion in the back half. ... leverage in the first half with potential deleverage in the back half as new store openings accelerate. | 2026-06-11 | 2026-12-31 | Shift in financial performance cadence, with modest gross margin pressure and SG&A leverage in H1 transitioning to modest gross margin expansion and potential SG&A deleverage in H2. | This expected shift, driven by subsiding tariff impacts and accelerating new store openings, is crucial for achieving full-year profitability targets. | Ticker | 2026-06-09 | earnings_transcript |
| ASO_14ee93cc | throughout the remainder of the year | 2026-06-11 | 2026-12-31 | Persistence of high gas prices and other inflationary pressures. | These macro factors are expected to continue negatively impacting discretionary spending for the American consumer, posing a significant headwind to sales, particularly for lower-income households. | Theme | 2026-06-09 | earnings_transcript |
| ASO_e082fbf2 | Throughout the majority of this year | 2026-06-11 | 2026-12-31 | Continued bifurcated consumer spending environment, with lower-income consumers under pressure and higher-income consumers increasingly trading into Academy. | This dynamic influences overall sales trajectory and the effectiveness of value-driven strategies. Worsening trends for lower-income cohorts or a slowdown in higher-income trade-ins would be bearish. | Theme | 2026-06-09 | earnings_transcript |