Academy Sports and Outdoors, Inc. slightly raised its full-year outlook after reporting its first same-store gain in three quarters on strength in shooting and fishing categories, but CEO Steve Lawrence still cautioned that elevated gas prices will weigh on consumer spending for the year.
“Gas prices definitely are a headwind for the American consumer,” Lawrence told analysts on a call.
Lawrence said Academy will continue to emphasize value, with the positioning helping the retail chain to attract more higher-income households. However, he said Academy expects that the high gas prices and other inflationary pressures will persist and continue to negatively impact overall discretionary spending, particularly among lower-income households, throughout the remainder of the year.
Lawrence noted that total sales through Memorial Day in the second quarter were tracking up low single digits, or approximately flat comp. He attributed the slowdown in the first-quarter comp gain of 2.7 percent to higher gas prices, noting that the first quarter benefited from tax refunds.
However, Lawrence expects Academy to deliver comp gains in the year ranging from flat to 2 percent, as several events, including the World Cup and America 250, as well as internal initiatives such as a credit card relaunch and the arrival of new brands to help stimulate growth.
Lawrence said, “So, definitely, seeing an impact, a little bit of a slowdown from what we saw in Q1 with the consumer, tracking flat through Memorial Day, but optimistic about the opportunities still ahead.”
Shares of Academy were down $1.30, or 2.5 percent, to $50.37 on Tuesday, June 9, on the New York Stock Exchange.
Outlook Raised
With the first quarter coming in at the high end of guidance on both sales and earnings, the Texas-based retailer raised the lower end of its year-over-year sales and earnings guidance.
First-Quarter Sales
In the first quarter ended May 2, net sales were $1.44 billion, an increase of 6.7 percent, with comparable sales up 2.9 percent. Sales were in line with analysts’ consensus estimate.
The improvement was driven by a combination of low-single-digit positive traffic growth, and a high-single-digit increase in AUR (average unit retail). Units per transaction were down slightly.
E-commerce remained a strength and accelerated versus 2025 levels, with over 17 percent growth. Online growth is expected to remain elevated as Academy expands its endless aisle, enhances search functionality, and offers same-day delivery.
Category Performance
All four of Academy’s category divisions delivered net gains in the quarter.
Outdoor was the best-performing category, up 12 percent, driven by strength in fishing and shooting sports. Ammo, a headwind for Academy for most of last year, turned positive in February and accelerated after the conflict in the Middle East began. Firearms “continues to be a bright spot,” with Academy estimating it has grown its market share in this category for eight consecutive quarters. To further capitalize on the strength in shooting, Academy launched the suppressors category at a limited number of doors during the quarter, with a goal to reach over 100 stores by the end of the year. Lawrence said, “This is a rapidly growing category in the industry, with a strong attachment rate to firearms and high AURs. Since suppressors are totally new to our assortment, this business should be 100 percent accretive and provide an additional tailwind to the shooting sports category throughout the remainder of this year and next.”
Sports & Recreation delivered 6 percent growth, driven by “solid gains” in baseball, which fueled the team sports business during the quarter. Double-digit gains were also seen in Academy’s front-end business, driven by the collectible trading card business, which is benefiting from Academy’s increased investment in the category. The outdoor speaker’s business, supported by Turtlebox, continues to see “solid improvements.”
Apparel sales were also positive, up 5 percent, with strength in outdoor and work businesses, which is supported by expanded assortments from Carhartt, Berlevo, Levi’s, and Academy’s proprietary Magellan Outdoors brand. Said Lawrence, “We will continue to lean into the work western lifestyle trend with the addition of roughly 100 Ariat shops in the back half of the year.” In athletic apparel, the gains were driven by continued momentum in the Nike and Jordan brands, coupled with double-digit increases in its better private brands, Freely and R.O.W.
Footwear sales grew 3 percent for the quarter, led by its cleated business, driven by baseball, along with summer seasonal businesses driven by Crocs and Birkenstock. Lawrence said, “We also remain encouraged by the momentum we are seeing in performance running, fueled by key platforms such as the Nike Vomero, the Adidas EVO SL, the New Balance Ellipse, and the Brooks Glycerin.”
Academy launched Jordan last April and expanded Nike assortments last year. Lawrence said Academy plans to add 55 Jordan Brand shops in the second quarter, bringing its total to 200, or about two-thirds of its store base. It also continues to provide better access to Nike products. Lawrence said Jordan and Nike combined delivered mid-single-digit comp increases in the quarter, and that’s expected to continue throughout the year. Said Lawrence, “We think Nike is a growth engine for us. We are really excited about some of the expansion we are going to have in some of the performance-running categories like the Vomero.”
In the Q&A session, Lawrence also noted that Hyrox fitness equipment range and the Brunt work footwear lines are being added to offerings this year.
Profitability & Expenses
Gross margin declined 71 basis points, as expected, to 33.2 percent, as the impact of tariffs was partially offset by favorability in freight and shrink. The first quarter is expected to see the largest tariff impact for the year, with the pressure subsiding in subsequent quarters.
SG&A was 28.1 percent of sales, an improvement of 77 basis points and primarily driven by the 2.9 percent comp. Academy also lapped $7.5 million in prior-year costs related to the Nike expansion and Jordan brand rollout. The improvement was partially offset by a $3.6 million increase in stock compensation expense year over year.
Operating income for the quarter was $74.7 million, up 7.8 percent from $69.3 million a year ago.
Net income improved 14.3 percent to $52.7 million, or 80 cents a share, from $46.1 million, or 68 cents, a year ago.
Adjusted to exclude non-cash charges related to equity-based compensation and its related tax impact, adjusted earnings improved 18.6 percent to $61.2 million, or 93 cents, from $51.6 million, or 76 cents, a year ago. Adjusted earnings came in a penny ahead of analysts’ consensus estimates.
Growth Initiatives
Lawrence provided an update on Academy’s three growth strategies: store expansion, productivity improvements, and omnichannel expansion.
The CEO said store expansion remains Academy’s “number one growth lever,” according to Lawrence. Academy began the year with 39 stores from its 2022 through 2024 opening vintages in its comp base, and those stores have continued to “perform well, with sales comping in the high single digits.”
Academy expects the new-store benefits “should accelerate’ as the 24 stores from 2025 openings start to flow into the comp base this year.
During the quarter, Academy opened two stores in Canton, OH, and Muskogee, OK, supporting the opportunity it identified last year within mid-sized markets. Lawrence said, “These are underserved communities and tend to over-index with our core customer, the ‘Always Game’ family.”
During the second quarter, Academy will open three more stores with locations in Altoona, PA; North Knoxville, TN; and Morristown, TN. The remaining 15 to 20 stores set to open this year are expected to open in the back half of the year, with a heavy focus on legacy and existing markets.
At an Analyst Day event in early April, Academy forecast 5 percent sales growth and high-single-digit earnings growth over the next five years, with the sales boost largely driven by the opening of 125 stores through 2030. It operated 324 stores at the end of the first quarter.
To improve its existing business, a major payback is expected from the relaunch of its My Academy Rewards program that now features a three-tiered structure. Academy is in the process of reissuing new cards to all current cardholders and plans to complete the process by the end of June. Said Lawrence, “We are already seeing an uplift in sales from this initiative, driven by increased enrollment and card utilization. We believe customers are leveraging our best-in-market value proposition to offset the rising costs they face in their everyday lives. Enrollment in myAcademy Rewards is up double digits year over year. With our goal being to add an additional 2 million new members this year, we will grow our total loyalty program to over 15 million members.”
Academy’s in-stock positions continue to run up over 200 basis points versus last year, driven by the expanded utilization of RFID. In addition, Lawrence said Academy expects to benefit from “several non-comp tailwinds” this year, including the World Cup taking place at venues near about 40 of its stores and America’s 250th birthday. He said, “We are well stocked at World Cup gear, summer essentials, and all things red, white, and blue. We can maximize the opportunities ahead of us in the second quarter.”
He said he expects the World Cup to boost Academy’s licensed team business. He said the San Antonio Spurs’ title run provides a “little bit of a tailwind” for Academy while noting that Academy benefited in the prior year from the championship run by the Oklahoma Thunder. He said, “We don’t have any stores in the New York area, so the Knicks winning wouldn’t be a good thing for us. We’re happy so far with the licensed business and expect it to be a tailwind, primarily driven by the World Cup throughout the remainder of the quarter.”
Omnichannel progress is evident with the 17 percent increase in e-commerce sales in the first quarter, resulting in a 100-basis-point expansion in penetration.
For the second quarter, Academy is expanding its same-day delivery platforms, adding Uber Eats and Instacart to complement its existing partnership with DoorDash. Said Lawrence, “Our research shows there is minimal overlap between the customer bases for each of these services. Expanding our online presence to include these additional same-day delivery platforms should be mostly accretive, exposing our branded product categories to a broader audience.”
In addition, Academy plans to migrate its search platform on its site to be powered by Google’s AI commerce search and Gemini Enterprise customer experience in time for back-to-school selling. Said Lawrence, “We believe customers are increasingly utilizing AI agents to aid them as they shop online. So, moving our search to be powered by AI is a natural evolution and will be intuitive for them. As we continuously evolve our online capabilities, we expect the sales momentum we have built over the past year in this business will continue to provide a strong comp tailwind for overall sales.”
New Store Openings
Academy opened two new stores during the first quarter, bringing its total to 324 locations. The Company plans to open three stores during the second quarter, with the remaining 15-20 to be opened in the second half of fiscal 2026.
Academy opened two new stores during the first quarter, bringing its total to 324 locations. The company plans to open three stores during the second quarter, with the remaining 15 tp 20 store to be opened in the second half of fiscal 2026.
Image courtesy Academy Sports
