Summary of Academy Sports and Outdoors, Inc. Q4 2025 Earnings Call

1Key Financial Results and Metrics:

Q4 Sales: $1.7 billion, up 2.5% year-over-year.

Comparable Sales: Decreased by 1.6%, with transactions down 6.4% and average ticket up 5.1%.

Net Income: $133.7 million, or $1.98 per diluted share; adjusted net income was $132.9 million, or $1.97 per adjusted diluted share.

Gross Margin: 33.6%, an increase of 140 basis points year-over-year.

SG&A Expenses: 23.7% of sales, up 70 basis points, driven by growth initiatives and new store openings.

Full Year Sales: $6.05 billion, a 2% increase, with a gross margin rate of 34.8%, up 90 basis points.

2Strategic Updates and Business Highlights:

E-commerce Growth: .com business grew by 13.6%, with enhancements in core search and AI capabilities.

Store Expansion: Opened 24 new stores in 2025, with plans for 20-25 new stores in 2026.

RFID Implementation: Rolled out RFID scanners to improve inventory management, leading to a 500 basis point improvement in in-stocks.

Loyalty Program: My Academy Rewards program now has over 13 million members, with plans for a relaunch of the Academy credit card to enhance customer engagement.

Product Assortment: Expanded offerings in trending brands and categories, including the successful launch of the Jordan brand.

3Forward Guidance and Outlook:

2026 Sales Guidance: Expected to grow by 2% to 5%, translating to a negative 1% to positive 2% in comparable sales.

Gross Margin Expectations: Projected to range from 34.5% to 35.0%.

Net Income Forecast: GAAP net income expected between $380 million and $415 million, with adjusted net income between $410 million and $445 million.

Earnings Per Share: Expected GAAP diluted EPS of $5.65 to $6.15 and adjusted diluted EPS of $6.10 to $6.60.

4Bad News, Challenges, or Points of Concern:

Consumer Spending Pressure: Ongoing economic challenges are impacting discretionary spending, particularly among lower-income consumers.

January Weather Impact: Severe winter storms led to temporary store closures, negatively affecting sales.

Traffic Decline: Notable declines in traffic from lower-income cohorts, with high-income households showing growth.

Geopolitical Risks: Potential impacts from global events, including the war affecting ammunition sales.

SG&A Growth: Increased operating expenses due to new store openings and technology investments may pressure margins.

5Notable Q&A Insights:

Sales Performance: The CEO indicated that the January store closures likely cost about 100 basis points in comp sales.

Traffic Trends: Traffic from households earning over $100,000 is increasing, while lower-income traffic is declining.

Store Economics: New stores are performing better than expected, contributing positively to overall sales.

Loyalty Program Impact: The integration of the loyalty program is expected to drive customer engagement and sales, with significant potential benefits anticipated.

Supply Chain Efficiency: Continued improvements in supply chain efficiency are expected to support margin growth moving forward. Overall, Academy Sports and Outdoors demonstrated resilience in a challenging retail environment, with strategic initiatives aimed at driving future growth, despite headwinds from economic pressures and changing consumer behavior.