Emily Gosh

Emily Ghosh asked for a characterization of the health of the Academy customer and how the level of trade-in from upper-income customers in Q3 compared to what was observed in Q2.

Answer

CEO Steve Lawrence acknowledged the 'K-shaped economy,' noting continued high single-digit growth in traffic from high-income households ($100,000+ annually), though this was slightly lower than the double-digit growth seen in Q1 and Q2, as the company began to lap strong growth from the previous year. He stated that middle-income consumers ($50,000-$100,000) remained steady, while lower-income consumers (under $50,000) continued to pull back, experiencing mid-single-digit declines, albeit at a slower pace than in the first half of the year. Steve emphasized that Academy is adding more high-income customers faster than it is shedding lower-income customers. CFO Carl Ford added that the company has significantly de-risked its consumer portfolio over the past year, with the average customer now being significantly healthier due to the trade-in from higher-income quintiles.

Speaking on behalf of Kate McShane, Emily Gosh asked about the drivers behind the acceleration in supply chain efficiencies seen in Q1 and the outlook for these benefits for the rest of the year.

Answer

President and CEO Laura Alber framed supply chain efficiency as a direct reflection of improved customer service. She explained that the benefits are driven by lower returns and replacements, better on-time delivery, and fewer out-of-market shipments. She noted that while progress is strong, there is still more opportunity for improvement, which acts as both a cost saver and a sales driver.

Speaking for Kate McShane, Emily Gosh of Goldman Sachs inquired about the drivers behind the acceleration in supply chain efficiencies seen in Q1 compared to Q4, and the outlook for these efficiencies for the rest of the year.

Answer

President and CEO Laura Alber positioned supply chain efficiency as a direct reflection of customer service. She explained that improvements in metrics like lower returns, fewer replacements, and better on-time delivery simultaneously reduce costs and drive sales. She expressed confidence that the supply chain team will continue to find more efficiencies, particularly in the complex area of furniture delivery.

Emily Gosh from Goldman Sachs, on for Kate McShane, inquired about the drivers behind the acceleration in supply chain efficiencies seen in Q1 compared to Q4, and the outlook for the rest of the year.

Answer

President and CEO Laura Alber equated supply chain efficiency with improved customer service, citing lower returns, better on-time delivery, and reduced out-of-market shipping as key drivers. She emphasized that excellence in furniture delivery is a significant competitive advantage and sales driver, with more progress expected.