In a session Tuesday at Goldman Sachs’ Global Consumer and Retail Conference, Steve Lawrence, CEO of Academy Sports, said Hoka had been the second most requested brand by customers after Jordan, but the path to securing access to both brands only came after moves made over the last six or seven years to upgrade overall assortments.

Back in pre-pandemic years, Academy was generally known for that “good” level of pricing, according to Lawrence, and management recognized that it was missing an opportunity to serve consumers at the “better” and “best” pricing levels.

Lawrence said, “The example I always use is when my son started out playing sports, we needed to get him the Little League gear, so you find the bat, the ball, the glove at Academy for under 100 bucks and get out. And then the next month when he decides he wants to play soccer; we put that baseball stuff in the closet and buy him the soccer gear. What we really weren’t good at, though, was that ‘better,’ ‘best’ level. So, if he wanted to stick with a sport and maybe play in a rec league or even a travel ball team, we didn’t have that gear.”

Lawrence said Academy subsequently began upgrading its mix broadly across all categories, including sporting goods, apparel, footwear and outdoor “to layer on that ‘better, best’ end of the spectrum so we had the gear that would enable us to stay with people as they progress through the life cycle of their passions.”

As Academy has been adding more-premium brands, the chain started hearing more requests for brands missing from the assortment and that led to discussions with Nike on getting access to Jordan product. He said gaining access to Jordan product was helped by Academy proving in recent years it was able to sell footwear “north of $100,” including Nike product. Lawrence said, “We built a really nice running business with Nike, between $100 to $200, and that gave them confidence that we could sell at price points like Jordan.”

Academy initially added Jordan to 145 doors last year and the brand has now reached 200 locations. More Nike product has also been added to Academy’s mix and Hoka will be launched in 15 stores and online this fall. Styles include the Arahi 9, Challenger 8, Clifton 11, Rincon 5, and Torrent 5.

Lawrence added that the online component of the Hoka distribution arrangement is critical because it enables Academy to sell Hoka product from any of its 324 stores. Said Lawrence, “We, like a lot of retailers, have handheld devices in stores. So, if you come into a store that doesn’t have Hoka, the person working in that department can sell you the Hoka shoe that you want. They can either ship it to the store for you to pick it up, or we can ship to your house for free. So, it expands that reach beyond just the 15 doors.”

Lawrence added, “And we’re going to continue to add brands that our customers are looking for. And I think what that does is twofold. I think it attracts a customer who maybe didn’t consider us before for it. And it helps a customer who was shopping with us who had to leave our store to go some other place to find what they’re looking for to stay with us.”

Lawrence also called out Academy’s successes bringing in newer brands in other categories, including Burlebo that filled a void Academy saw in men’s outdoor apparel with a “younger man’s silhouette and styling.” The brand  is now one of Academy’s top-10 apparel brands after being introduced in 25 doors two years,

The Chicken Legs running short brand was tested at 25 stores last spring after Academy saw the brand finding success at run specialty shops and is now being expanded to 200 doors this coming back-to-school season.

Among Western brands, Academy recently opened 200 Ariat in-store shops to capitalize on healthy demand for the brand. Among private labels, Academy is introducing a Redfield firearms range that retails “for about $100 less than comparable national brand items.”

Academy has also recently been finding success adding trading card sections to stores. Lawrence said the merchandise changes have “really helped us unlock a lot of different things in the past couple years.”

Asked about the health of athletic footwear amid reports of weakness in legacy athletic footwear silhouettes from Dick’s, JD Sports, and others, Lawrence said Academy is also seeing “a little bit of softness in kind of a lifestyle piece of the athletic business.” Footwear overall was Academy’s worst performance among its four category segments in the second quarter .Footwear sales were down 1 percent while overall sales grew 3 percent.

However, Lawrence noted that footwear only accounts for 20 percent of Academy’s sales and strength in other footwear categories is helping offset the weakness in lifestyle. He said, “A lot of the shoes we sell are kind of for end use. So, for example, we do cleated, and we’ve seen no slowdown in that business. Kids are still playing sports, still need cleats to play baseball, football, etc. We do a big work boot business that continues to be very strong. A lot of our casual styles have been pretty strong as well. Brands like Ariat – that’s doing well for us, as well as Birkenstock.”

Lawrence noted that although footwear sales were down, Circana data showed Academy gained share in the category in the quarter. The CEO said, “We’re happy with that. Although we’d like that category to be positive. But we think we can mitigate it by balancing out the assortment and investment in other categories.”

Among other topics addressed by Academy management:

  • State of the consumer: Academy’s same-store sales dipped 0.4 percent in the second quarter after rising 2.9 percent in the first quarter. Lawrence said higher gas prices “definitely put pressure on the consumer” in the second quarter while the first quarter benefited from larger-than-usual state and federal tax refunds. The pressures are particularly impacting lower-income groups. Sales from Academy’s lower-income customers, or households earning under $50,000, were down high-single digits, in the second quarter versus a low-single digit decline in the first quarter. Sales from higher-income households, or upwards of 100,000, were up high-single digits in the second quart. Said Lawrence, “The lower-income consumer, whether it’s our customer or not, is definitely under pressure and is pulling back spending.”
  • Promotional climate: Asked about the promotional climate amid recent warnings from Dick’s of a promotional climate in footwear in the back half, Lawrence said promotions “certainly progressed from Q1 into Q2, and I think it corresponds with customers slowing down and exhausting whatever tax refunds they had.” He saw retailers running promotions for longer periods and promoting more categories. Lawrence also said consumers continue to participate in “episodic shopping,” or “coming out and buying during the times of need when they can get the best deals, and they’re kind of pulling back in the lulls.” He said Academy continues to prioritize rationalizing promotions during the lulls in the calendar to “save some of those promotional dollars to fund what we think will be a more promotional holiday.”
  • World Cup benefit: Lawrence said World Cup payback was in line with plans, particularly in helping drive traffic to stores. He said, “I think we had over 30, 40 matches in our footprint, and it generated a lot of excitement.” It “wasn’t as accretive as we thought” as he believes customers were making trade-offs, such as buying a World Cup jersey for a Father’s Day gift instead of a fishing shirt. He expects an ongoing benefit from increases in youth soccer participation, with those categories generating double-digit gains in Q2 and the trend has continued in the third quarter. The last time the World Cup was held in the U.S. in 1994, Academy saw a “dramatic sustainable surge in youth soccer,” and he sees another catalyst to drive soccer participation in 2027 as the Women’s World Cup is set to take place in Brazil.

Said the CEO, “It’s in our hemisphere, so the games will be broadcast real time, and you have to believe the U.S. team’s going to be a favorite. So, I think we’ll see some surge there.”

Image courtesy Academy Sports and Outdoors, Inc.