Summary of Academy Sports and Outdoors Q2 2026 Earnings Call

1Key Financial Results and Metrics

Net Sales: $1.6 billion, up 3% year-over-year.

Comparable Sales: Down 0.4%.

E-commerce Growth: Up 12.8%, with a continued strong performance.

Gross Margin: 40.4%, an increase of 440 basis points year-over-year, primarily due to tariff refunds.

Operating Income: $246 million, up 42.9%.

Diluted Earnings Per Share: $2.17, a 17.3% increase; adjusted EPS was $2.31, up 19.1%.

Free Cash Flow: $32 million, a 49% increase year-over-year.

Inventory: Up 4.4% year-over-year, but down 2.3% per store.

2Strategic Updates and Business Highlights

Store Openings: Three new stores opened in Q2, with plans for 22-24 total openings in FY 2026.

New Initiatives: Launched storefronts on Instacart and Uber Eats; introduced the Academy Retail Media Network.

Loyalty Program: The myAcademy Rewards program is gaining traction, with credit card applications up 15% and spend on Academy credit cards up 20%.

Product Innovations: New brands like Hoka and ChicknLegs are being introduced, with a focus on expanding successful brands like Ariat and BURLEBO.

3Forward Guidance and Outlook

Sales Guidance: Affirmed at $6.23 billion-$6.36 billion (3%-5% growth).

Comp Sales Guidance: Flat to +2%.

Gross Margin Guidance: Raised to 35.5%-36.0%.

EPS Guidance: Expected to be $6.05-$6.45, with adjusted EPS at $6.50-$6.90.

Free Cash Flow Guidance: Expected in the range of $300 million-$350 million.

4Bad News, Challenges, or Points of Concern

Consumer Pressure: Notable decline in traffic from lower-income households (down high single digits), indicating ongoing economic strain.

Comp Sales Decline: Negative comparable sales in Q2 and expected challenges in the back half of the year.

Promotional Environment: Increased promotional activity anticipated in Q4, which may impact margins.

Footwear Performance: Footwear category was the weakest, with sales down 1%, despite market share gains.

5Notable Q&A Insights

Sales Cadence: Management expects consistent performance in Q3 and Q4, with positive comps anticipated despite macroeconomic pressures.

Traffic Trends: Higher-income consumers are showing stronger traffic growth, while lower-income consumers are shopping more episodically.

Competitive Landscape: Academy's diverse product assortment differentiates it from competitors, particularly in outdoor and grilling categories.

Future Growth: Continued focus on new store openings and product innovation is expected to drive future sales growth, despite current consumer challenges. Overall, Academy Sports and Outdoors demonstrated resilience in its financial performance, with strategic initiatives aimed at driving growth amidst a challenging consumer environment. The company remains optimistic about its outlook while acknowledging the pressures on lower-income consumers and the competitive landscape.