ASO
T3Academy Sports and Outdoors, Inc.
OverviewAcademy Sports and Outdoors, Inc. is a U.S. retailer offering a wide range of sporting goods, outdoor recreational products, apparel, and footwear. The company
Academy Sports and Outdoors, Inc. is a U.S. retailer offering a wide range of sporting goods, outdoor recreational products, apparel, and footwear. The company operates over 300 stores across 21 states and an e-commerce platform. It serves a broad customer base, increasingly targeting higher-income consumers with expanded premium brands, while maintaining its value proposition. Recent initiatives include new store expansion, significant e-commerce growth, and an enhanced loyalty program.
- What They Do (Plain English & Analogies)
- Academy Sports and Outdoors is like a large retail store that caters to people who enjoy sports, outdoor activities, and casual living. Imagine a place where you can find almost anything for your active lifestyle, from equipment for team sports like baseball and soccer, to gear for hunting, fishing, and camping. They also sell a wide range of athletic and casual clothing, shoes, and accessories for men, women, and children. Essentially, they provide a comprehensive selection of products to help individuals and families pursue their hobbies and everyday needs related to sports and the outdoors. They operate through physical stores and an online website.
- Very Brief History
- Academy Sports and Outdoors, Inc. was founded in 1938. Since its inception, the company has grown to become a significant sporting goods and outdoor recreational products retailer in the United States, expanding its physical store presence across 16 contiguous states and developing a robust e-commerce platform through academy.com.
- "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*
- {"subsidiaries":[]}
- 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.
- New Customers / Segments They'Re Targeting
- Academy Sports and Outdoors is actively targeting higher-income consumers, specifically households with incomes over $100,000 a year, which currently represents their largest and fastest-growing customer cohort. They aim to achieve this by expanding their assortment to include "better/best" brands and trending items, such as Jordan, Converse, Birkenstocks, and Ray-Ban Metas, without losing their reputation as a value provider. Additionally, they are leaning into growing lifestyle movements like work and western wear, expanding brands like Carhartt, Wrangler, and Ariat, and testing emerging brands such as Hooey and Brunt. They are also pushing into the baseball lifestyle culture with new brands and accessories.
- Supply Chain And Sourcing Geographies
- Academy Sports and Outdoors' supply chain involves importing a significant portion of its goods from overseas. The company faced incremental tariffs on imported goods in late Q1 and Q2 of the prior year, leading to efforts in sourcing country diversification and inventory pull-forward at lower costs. They also experienced port disruption costs in the prior year, particularly related to proposed East Coast port strikes, indicating a reliance on maritime shipping for international sourcing. 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.
- Sales Geographies And Expansion Plans
- Academy Sports and Outdoors currently sells its products through 260 retail locations in 16 contiguous states across the United States. They also sell merchandise to customers nationwide through their e-commerce website, academy.com. The company plans to continue its new store expansion, with 20 to 25 new stores slated for 2026. The majority of these new stores will be "infill within our legacy and existing markets," indicating a strategy of deepening their presence in current operating regions rather than expanding into entirely new states or countries.
- How Key Themes May Help/Hurt
- The theme 'Shrinkage Long '25: Retailers Helped by Solutions' is a significant positive for Academy Sports and Outdoors. The company explicitly states that "shrink to be a tailwind as we continue to roll out RFID to more brands and private label apparel and footwear". The rollout of RFID scanners in all stores in Q2 of the prior year was described as a "game changer" that helped improve in-stocks by 500 basis points and conversion rates. As they expand RFID tagging to private branded apparel and footwear, covering roughly one-third of their sales base by the end of spring, they expect further benefits from improved inventory accuracy and reduced shrink, which should contribute to margin expansion. The theme 'Stagflation Short '25: Consumer Demand Compression' presents a significant headwind for Academy Sports and Outdoors. Management repeatedly highlights a "challenging economic backdrop" and "muted backdrop for discretionary consumer spending," particularly for the "lower- and middle-income consumer" due to inflationary pressures and concerns about consumer financial health, including rising credit card delinquencies. They note that "inflationary pressures on goods sourced outside of the U.S. should continue through the first half of the year". The company observes that lower-income consumers are "under pressure, is opting out or trading down". Carl Ford explicitly states that the "primary headwind is the economic health—the financial health—of the American consumer" and mentions concerns about "credit card delinquencies at double what they were in 2024" and that "job growth in America is not going to be strong in 2026". These factors directly compress consumer demand for discretionary items, potentially offsetting the company's internal growth initiatives.
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 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 .com business growing 13.6% in 2025. Key initiatives include moving to an AI-based semantic search platform, leveraging AI platforms like OpenAI and Google to surface products in their ecosystems, expanding online assortment through drop-ship partnerships, and empowering store teams with handheld devices for "endless aisle" capabilities.
- Unified Loyalty Program and Brand Expansion: The relaunch of the My Academy Rewards credit card program in Q2 2026 will create a unified, tiered loyalty program with expanded benefits, including a new Mastercard option that offers rewards on all purchases, both in and outside of Academy. This, coupled with the continued expansion of "better/best" brands like Jordan and Nike premium fashion, and growth in trending categories like work/western wear and baseball lifestyle, is expected to drive customer engagement, attract new customers, and increase share of wallet.
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.
- 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 like sourcing diversification, these ongoing costs can impact gross margins and necessitate strategic 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.
- Competitors And Differentiation
- Academy Sports and Outdoors competes with other sporting goods retailers, big-box stores with sporting goods departments, and online retailers. Key competitors likely include Dick's Sporting Goods, Bass Pro Shops/Cabela's, Walmart, Target, and Amazon. Academy differentiates itself by maintaining a strong reputation as a "value provider" in the sports and outdoor space. They aim to offer outstanding value while strategically increasing average unit retails through promotional optimization and growing sales in the "better/best" end of their assortment. They are also focused on improving in-stocks through RFID technology, expanding their .com business with AI capabilities, and enhancing their loyalty program. The company emphasizes leaning into emerging trends and adding in-demand brands to reinforce its position as a key destination for gift-giving and stock-up periods.
- Recent Performance & What The Market'S Focused On
- Academy Sports and Outdoors reported fourth-quarter fiscal 2025 net sales of $1.7 billion, up 2.5% year-over-year, with comparable sales down 1.6%. Full-year 2025 top-line sales grew 2% to $6.05 billion, marking the first top-line growth since 2021. Gross margin improved by 140 basis points in Q4 to 33.6% and by 90 basis points for the full year to 34.8%. The company provided initial guidance for fiscal 2026, expecting net sales of $6.18 billion to $6.36 billion (2% to 5% growth) and comparable sales ranging from negative 1% to positive 2%, with a midpoint of positive 0.5%. The market is primarily focused on Academy's ability to return to consistent positive comparable store sales growth in 2026, given the continued challenging macroeconomic environment for the consumer. Investors are tracking the effectiveness of the company's "self-help initiatives," including new store performance, e-commerce acceleration (especially with AI integration), and the impact of the unified loyalty program relaunch. The interplay between these internal drivers and external tailwinds (like higher tax refunds, the World Cup, and the 250th anniversary of the U.S.) versus persistent macroeconomic headwinds (consumer financial health, tariffs, gas prices) is a key area of market attention.
- Revenue Segments And Estimated Mix
- Sporting Goods, Outdoor Recreational Products, Apparel, Footwear, and Accessories — Mix: n/m; Source: Q4 Fiscal 2025 earnings transcript and company description. Specific percentages for segments are not disclosed.; Trend: In Q4 2025, bikes, fishing, outdoor cooking, apparel, electronics, and athletic footwear were strong. Softer businesses included seasonal footwear, outerwear, ammo, Drinkware, and Ride Ons. All businesses performing well in early Q1 2026.
- Product Brands
- Academy Sports + Outdoors
- Magellan Outdoors
- BCG
- O'rageous
- Outdoor Gourmet
- Freely
- Jordan
- Converse
- Birkenstocks
- Perliville 101
- Turtlebox speakers
- Ray-Ban Metas
- Carhartt
- Wrangler
- Ariat
- Hooey
- Brunt
- 80 races (training equipment)
- Baseball Lifestyle 101
- Dirty Mid's
- Bruce Bolt
Bull / Bear DetailsAcademy Sports and Outdoors faces significant headwinds from persistent macroeconomic pressures, including accelerating inflation, elevated gas prices, and weak
Thesis
Academy Sports and Outdoors faces significant headwinds from persistent macroeconomic pressures, including accelerating inflation, elevated gas prices, and weakening consumer financial health, particularly for lower and middle-income segments. Despite robust internal growth initiatives like new store expansion, e-commerce acceleration, and loyalty program enhancements, these efforts are likely to be largely offset by a contracting discretionary spending environment and increasing credit card delinquencies. The bear case remains more compelling as of June 4, 2026, given the challenging consumer backdrop.
Bull case
New store expansion remains a key growth driver, with 24 new stores opened in fiscal 2025 exceeding year-one performance and 20-25 more planned for 2026. Stores opened from 2022-2024 are already driving mid-single-digit comparable sales increases, providing a tangible tailwind for future growth.
Academy's e-commerce business demonstrated strong 13.6% growth in fiscal 2025, supported by ongoing digital transformation efforts. Investments in AI-based semantic search, integration with leading AI platforms, and expanded online assortments are expected to further propel digital sales and customer engagement.
The relaunch of the Academy credit card, integrated into a unified, tiered My Academy Rewards loyalty program, offers expanded benefits including rewards for external spending. This, coupled with the successful expansion of premium brands like Jordan and Nike, and growth in lifestyle categories, should attract and retain a broader customer base.
Bear case
The primary headwind is the deteriorating financial health of the American consumer, with 90-day credit card delinquency rates hitting 13.1% in Q1 2026, their highest in 15 years. This, alongside expectations for weak job growth and high gas prices, significantly impacts discretionary spending.
Persistent inflationary pressures, particularly an accelerating annual inflation rate of 3.8% in April 2026 driven by energy costs, continue to erode consumer purchasing power. These pressures, combined with ongoing tariffs on imported goods, are expected to compress margins or necessitate price increases that deter price-sensitive consumers.
Lower-income consumers (under $50k household income) are experiencing high single-digit traffic declines, indicating they are opting out or trading down due to financial strain. This trend directly impacts a significant segment of Academy's traditional customer base, offsetting gains from higher-income cohorts.
Bull / Bear Case
- Bear Case
- Academy Sports and Outdoors faces substantial headwinds from a challenging macroeconomic environment, particularly for lower- and middle-income consumers. Persistent high inflation (3.8% in April 2026) and elevated gas prices ($4.439/gallon in June 2026, up 35% YoY) are eroding consumer purchasing power. This is exacerbated by rising credit card delinquencies, with 90-day rates hitting 13.1% in Q1 2026, the highest in 15 years. Lower-income customer cohorts are already showing high single-digit traffic declines, indicating reduced discretionary spending. Ongoing inflationary pressures from tariffs on imported goods through the first half of 2026 could further compress gross margins or necessitate price increases that deter price-sensitive customers, making it difficult to achieve consistent positive comparable sales growth.
- Bull Case
- Academy Sports and Outdoors is poised for growth driven by its aggressive new store expansion, with 20-25 new stores planned for 2026 following 24 successful openings in fiscal 2025 that are exceeding year-one performance. Its e-commerce business is a significant tailwind, growing 13.6% in fiscal 2025, supported by ongoing digital transformation, AI-based search, and expanded online assortments. The relaunch of the My Academy Rewards credit card, integrated into a unified loyalty program offering rewards for external spending, is expected to deepen customer engagement. The company is also successfully diversifying its customer base by attracting higher-income consumers and expanding premium brands like Jordan and Nike, alongside trending lifestyle categories, while maintaining its value proposition. Operational efficiencies from RFID rollout are improving in-stocks and are expected to be a gross margin tailwind.
- More Compelling & Why
- Bull. The current P/E ratio of 9.91 for ASO is significantly below the specialty retail industry average of 21.32, suggesting the market has overly discounted the macroeconomic headwinds. The company's robust internal growth initiatives, including new store expansion, surging e-commerce, and an enhanced loyalty program, are showing positive early results and are likely underestimated by the current valuation. A sustained decline in comparable sales below the guided range for 2026, coupled with further deterioration in gross margins due to an inability to offset tariffs or increased promotional activity, would flip my view.
Key Factors
| Key Factor | Why It Matters | What To Watch | What It Signals | Where/How To Track | Free Alt Data | Paid Alt Data |
|---|---|---|---|---|---|---|
| Rising Credit Card Delinquency Rates | Elevated and rising credit card delinquency rates directly reflect the financial stress on ASO's consumer base, particularly lower and middle-income customers. This indicates a reduced capacity for discretionary spending and increased risk of trade-downs or deferred purchases. | Federal Reserve data on credit card delinquency rates (30+ and 90+ days past due) for Q1 and Q2 2026. Specifically, watch if the 90-day delinquency rate, which hit 13.1% in Q1 2026, continues to rise or if credit card balances increase significantly in Q2 2026. | Bearish if credit card delinquency rates continue to increase or remain elevated, signaling sustained consumer financial distress that will negatively impact discretionary retail spending. | Federal Reserve (FRED) data on Delinquency Rate on Credit Card Loans (quarterly), WalletHub reports (quarterly), company earnings calls for management commentary on consumer credit health. | FRED: Delinquency Rate on Credit Card Loans, All Commercial Banks (DRCCLACBN). | Earnest Analytics / Affinity / Yodlee: Transaction-level data revealing shifting consumer behavior and debt repayment patterns. |
| Gross Margin Rate Compression from Tariffs and Promotions | Despite 2025 gross margin expansion, inflationary pressures on imported goods and tariffs are expected to continue through H1 2026. A weak consumer environment could force increased promotional activity to drive sales, leading to margin compression and confirming 'Pricing Pressure + Weakening Margins' from the short thesis. | Quarterly gross margin rate, particularly in Q1 and Q2 2026, relative to the full-year guidance of 34.5% to 35.0%. Monitor management commentary on promotional intensity, inventory levels, and the ability to offset tariff costs. | Bearish if the gross margin rate falls below the guided range, especially if attributed to higher promotional activity, increased tariffs, or an inability to pass on costs to consumers. | ASO's quarterly earnings releases and conference calls. | N/A | Numerator / 1010Data / AlphaSense NLP: SKU-level price elasticity and promotional volume for ASO and key competitors. |
| Comparable Sales Growth Performance (Q1 & Q2 Fiscal 2026) | ASO's 2026 guidance for comparable sales is a narrow range of negative 1% to positive 2%. Failure to achieve positive comparable sales, especially given the numerous internal initiatives and external tailwinds, would signal ineffective strategies and continued underlying demand weakness, reinforcing the short thesis. | The reported comparable sales figures for Q1 2026 (expected June 9, 2026) and subsequent Q2 2026 results. Pay close attention to whether the positive comp start in Q1 continues and if Q2 overcomes its anticipated challenges. | Bearish if comparable sales fall below the low end of guidance (-1%) for Q1 or Q2, or if the company revises its full-year comparable sales guidance downwards, indicating deeper underlying demand issues or failed initiatives. | Academy Sports and Outdoors Q1 2026 earnings release and conference call (June 9, 2026), subsequent quarterly earnings releases. | N/A | Placer.ai: Store foot traffic % change YoY for ASO stores. Similarweb: academy.com web traffic and session growth. |
| Effectiveness of My Academy Rewards Mastercard Relaunch | The unified loyalty program and new Mastercard, launching in Q2, is a significant 'self-help initiative' aimed at deepening customer engagement and driving sales. A lack of significant uptake or failure to translate into increased customer spend would indicate a missed opportunity for internal growth, leaving ASO more exposed to macro headwinds. | Management commentary in Q2 and Q3 2026 earnings calls regarding new card sign-ups, activation rates, and the program's impact on customer spend, retention, and overall sales contribution. | 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. | ASO's quarterly earnings calls and investor presentations, particularly in Q2 and Q3 2026. | N/A | Earnest Analytics / Affinity: Customer retention and spend metrics for loyalty program members, comparing new cardholders to existing members and non-members. |
| Weakening Consumer Spending from Lower/Middle-Income Cohorts | The primary headwind for ASO is the deteriorating financial health of lower and middle-income consumers, who are under pressure from inflation, high gas prices, and rising credit card delinquencies. Weakening demand from this segment directly impacts sales and traffic, confirming the 'Stagflation Short' thesis. | Monitor consumer confidence indices, real personal consumption expenditures on durable goods (PCE-DG), and any management commentary on traffic declines from consumers with household incomes under $50,000. Specifically, watch for continued high single-digit traffic declines in this cohort. | Bearish if consumer confidence continues to decline, PCE-DG shows sustained contraction, or ASO reports worsening traffic trends and reduced basket sizes from lower-income customer segments. | The Conference Board Consumer Confidence Index (monthly), Bureau of Economic Analysis (PCE-DG, monthly), ASO's quarterly earnings calls and releases. | Google Trends: 'consumer confidence index', 'gas prices today'. YouGov: US consumer spending and budgeting trends (monthly/quarterly reports). | Earnest Analytics: Card Spend by Income Cohort (transaction-level data revealing shifting behavior and basket size for lower-income groups). Numerator / 1010Data: SKU-level price elasticity and promotional intensity for core SKUs. |
Key Reported Metrics
| Metric | Why It Matters | Last Period |
|---|---|---|
| Comparable Sales | This metric is crucial as the company aims to return to positive comparable sales in 2026, driven by internal initiatives and external tailwinds. Investors will closely watch its trajectory, especially given the positive start to Q1. | -1.6% |
| .com Business Growth | E-commerce is a significant and accelerating growth engine for Academy Sports and Outdoors, with new AI-driven initiatives and expanded online assortment expected to continue its strong momentum and deepen customer engagement. | 13.6% |
| Gross Margin Rate | Gross margin expansion is a key profitability driver for 2026, influenced by supply chain efficiencies, RFID rollout, and strategic brand expansions, despite ongoing tariff pressures in the first half of the year. | 4.35% |
Key QuestionsWill the ongoing financial pressure on lower- and middle-income consumers, evidenced by rising credit card delinquencies and high gas prices, lead to Academy Sp
Will the ongoing financial pressure on lower- and middle-income consumers, evidenced by rising credit card delinquencies and high gas prices, lead to Academy Sports and Outdoors reporting Q1 and Q2 2026 comparable sales below its guided range of -1% to +2%?
- Question 2
Can Academy Sports and Outdoors sustain its gross margin rate within the 34.5% to 35.0% guidance for Q1 and Q2 2026, despite continued inflationary pressures from tariffs on imported goods and potential increased promotional activity to attract price-sensitive consumers?
- Question 3
Will the expansion of RFID tagging to private branded apparel and footwear in Q1 and Q2 2026 effectively mitigate shrink and provide a material tailwind to gross margin, or will operational challenges and execution risks limit the expected benefits, thereby failing to offset other cost pressures?
Rerating Thresholds
| Metric | What'S Needed For Rerating | Why It Matters | Earnings Date |
|---|---|---|---|
| Gross Margin Rate | 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. | 2026-06-09 |
| .com Business Growth | 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. | 2026-06-09 |
| Comparable Sales | 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. | 2026-06-09 |
Earnings Transcript Summary
· 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 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_1dd72531 | April 7 in New York City | 2026-04-07 | 2026-04-07 | Academy Sports and Outdoors Analyst Day. | Management will provide a deeper dive into their long-range plan and multiyear strategy, which could significantly impact investor sentiment and future valuation. | Ticker | 2026-03-17 | earnings_transcript |
| ASO_64491af6 | through the first half of the year | 2026-01-01 | 2026-06-30 | Continued inflationary pressures on goods sourced outside of the U.S. impacting consumer spending. | These macroeconomic pressures are expected to carry into the first half of 2026, potentially muting discretionary consumer spending and impacting sales and margins. | Theme | 2026-03-17 | earnings_transcript |
| 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_c6363126 | this year | 2026-01-01 | 2026-04-15 | Consumers receiving higher income tax refunds. | Higher refunds could provide a sales lift, especially for categories like firearms, gun safes, and work boots, positively impacting Q1 results. | 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_6e536062 | late Q2 | 2026-05-01 | 2026-06-30 | Launch of an AI-based semantic search platform on Academy's website. | Aims to improve relevancy and conversion, which could boost e-commerce sales and overall digital performance. | Ticker | 2026-03-17 | earnings_transcript |
| ASO_ad435a91 | Q2 in advance of Father's Day | 2026-04-01 | 2026-06-30 | Relaunch of the Academy credit card and integration into a unified, tiered My Academy Rewards loyalty program, including a new Mastercard option. | Expected to accelerate loyalty growth, deepen customer engagement, and drive a sales tailwind into key selling periods by offering expanded value and rewards for both in-store and external spending. | Ticker | 2026-03-17 | earnings_transcript |
| ASO_1ff15770 | this spring | 2026-03-01 | 2026-05-31 | Expansion of the Jordan Brand Shop concept to an additional 55 stores. | This expansion will bring the integrated Jordan Brand presentation to over 200 doors, expected to continue driving sales momentum and attracting traffic. | Ticker | 2026-03-17 | earnings_transcript |
| ASO_b4820d56 | This spring | 2026-03-01 | 2026-05-31 | Expansion of RFID tagging to include private branded apparel and footwear products. | This initiative will allow for weekly counts and inventory updates on roughly one-third of the sales base by the end of spring, improving in-stocks, conversion rates, and potentially reducing shrink. | Ticker | 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 |