Sign in

You're signed outSign in or to get full access.

AS

Academy Sports & Outdoors, Inc. (ASO)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 2026 was mixed: net sales fell 0.9% to $1.351B, GAAP diluted EPS was $0.68 and adjusted diluted EPS was $0.76; gross margin expanded +60 bps YoY to 34.0% as shrink improved and softgoods mix helped .
  • Versus Wall Street consensus, ASO missed on revenue ($1.351B vs $1.372B*) and adjusted EPS ($0.76 vs $0.89*); management cited choppy demand, tariff uncertainty, and category headwinds (ammo) despite positive April comps and +10% eCommerce growth .
  • Guidance widened to reflect tariff scenarios: FY2025 comps now -4% to +1% (from -2% to +1%), net sales low-end reduced to $5.97B (from $6.09B) while the high-end was maintained; capex lowered to $180–$220M (from $220–$250M) .
  • Strategic catalysts: Jordan brand launched in 145 doors and online, Nike assortment expanded, RFID + handheld POS rolled chainwide, and five new stores opened (303 total); dividend declared at $0.13 per share for the quarter .

Values marked with an asterisk (*) are from S&P Global consensus estimates.

What Went Well and What Went Wrong

What Went Well

  • Positive comp in April as Jordan and Nike drove traffic; eCommerce grew +10% with penetration >10% and conversion/AOV improvements .
  • Gross margin rose to 34.0% (+60 bps YoY) on +40 bps merchandise margin and +10 bps favorable shrink; inventory accuracy gains supported by RFID rollout .
  • Tariff mitigation actions executed: $85M domestic inventory pulled forward at pre-tariff prices, supplier cost reductions, and accelerated shift out of China (private label exposure ~9% to ~6% by YE) .

Management quotes:

  • “We saw sequential improvement…resulted in a positive comp in April.” — CEO Steve Lawrence .
  • “We believe we have effectively mitigated the cost of tariffs to their current levels while minimizing the impact on our customers.” — CEO Steve Lawrence .
  • “Rolling [RFID] to all stores will help improve our in-stocks, which ultimately will lead to increases in conversion.” — CEO Steve Lawrence .

What Went Wrong

  • Traffic fell mid-single digits (transactions -5.2%, ticket +1.5%), with choppy consumer behavior and softness in ammo, basketball, and early-quarter golf .
  • SG&A deleveraged 290 bps to 28.8% (new store growth ~150 bps, Jordan/Nike launch ~60 bps, tech investments ~20 bps), weighing on operating margin (5.1%) .
  • Q2-to-date trend started “down low single digits,” reflecting macro uncertainty and timing of consumer “event-driven” shopping despite optimism around Father’s Day and back-to-school .

Financial Results

MetricQ3 2025Q4 2025Q1 2026
Net Sales ($USD Millions)$1,343.3 $1,676.9 $1,351.4
GAAP Diluted EPS ($)$0.92 $1.89 $0.68
Adjusted Diluted EPS ($)$0.98 $1.96 $0.76
Gross Margin (%)34.0% 32.2% 34.0%
Operating Income ($USD Millions)$91.5 $154.7 $69.3
Operating Margin (%)6.8% 9.2% 5.1%
SG&A (% of Sales)27.2% 23.0% 28.8%
Comparable Sales (%)-4.9% -3.0% -3.7%

Actual vs Estimates – Q1 2026

MetricActualConsensus*Surprise
Net Sales ($USD Millions)$1,351.4 $1,372.1*Miss: -$20.7M
Adjusted EPS ($)$0.76 $0.89*Miss: -$0.13

Values marked with an asterisk (*) are from S&P Global consensus estimates.

KPIs

KPIQ3 2025Q4 2025Q1 2026
Transactions YoY (%)——-5.2%
Ticket YoY (%)——+1.5%
eCommerce Sales YoY (%)——+10%
eCommerce Penetration (%)——10%+
Inventory per Store – Units YoY (%)-7% —+6.5%
Inventory per Store – Dollars YoY (%)-4% —+7.8%
New Stores Opened (period)8 (Q3) + 5 (early Q4) 5 5
Total Store Count (period end)298 298 303
Share Repurchases ($USD Millions)$53 (Q3) $368 FY $99.9 (Q1)
Dividends Paid ($USD Millions)$23.8 YTD $31.5 FY $8.7 (Q1)

Guidance Changes

MetricPeriodPrevious Guidance (3/20/25)Current Guidance (6/10/25)Change
Net Sales ($USD Billions)FY2025$6.09–$6.27 $5.97–$6.27 Low-end lowered; high-end maintained
Comparable Sales (%)FY2025-2% to +1% -4% to +1% Range widened lower
Gross Margin Rate (%)FY202534.0–34.5 34.0–34.5 Maintained
GAAP Net Income ($USD Millions)FY2025$375–$410 $350–$410 Low-end lowered; high-end maintained
Adjusted Net Income ($USD Millions)FY2025$400–$435 $375–$435 Low-end lowered; high-end maintained
GAAP Diluted EPS ($)FY2025$5.40–$5.85 $5.10–$5.90 Low-end lowered; high-end maintained
Adjusted Diluted EPS ($)FY2025$5.75–$6.20 $5.45–$6.25 Low-end lowered; high-end maintained
Diluted Shares (mm)FY2025~70 ~69 Lower
Capital Expenditures ($USD Millions)FY2025$220–$250 $180–$220 Lowered
Adjusted Free Cash Flow ($USD Millions)FY2025$290–$320 $250–$320 Low-end lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2025, Q4 2025)Current Period (Q1 2026)Trend
AI/technology initiativesEmphasis on system rollouts and supply chain/omni investments RFID and handheld POS chainwide; +900% save‑the‑sale lift per store; more brands to be added; private label RFID next year Accelerating
Supply chain/tariffsInventory well managed; guidance framed for macro/tariff risks $85M pull-forward at pre-tariff prices; reduced receipts >$120M; China exposure from ~9% → ~6%; multiple tariff scenarios in guidance Intensifying risk; robust mitigation
Product performanceOutdoor +7% YoY in Q3; Jordan launch announced Q4 Jordan/Nike drove April comp; athletic footwear +4.5% comp; ammo, paddle, marine pressured Mixed; softgoods strength vs hardgoods pressure
Regional/seasonalityWeather/holiday cadence influences February storms hurt; event-driven demand returning (Father’s Day, BTS) Seasonal sensitivity persists
Regulatory/legalNot highlighted in prior 2 quartersTariff elasticity and pricing optimization highlighted; scenario planning across reciprocal tariffs Elevated focus
Marketing/loyaltyNew loyalty program and targeted marketing; brand launches planned “Fun, Can’t Lose” campaign; ad spend +10 bps to 2.7% of sales; +2M loyalty adds targeted More aggressive marketing

Management Commentary

  • “We remain on track to open up 20-25 new stores this year and opened five locations in Q1, including our first locations in Pennsylvania and Maryland. Our store count…was 303.” — CEO Steve Lawrence .
  • “Our base case…is that tariffs remain at current levels…We now expect sales in the range of $5.97B–$6.26B and comp sales of -4% to +1%.” — CFO Carl Ford .
  • “We’re leveraging RFID chips…to update store inventories on a weekly basis…led to a 20% improvement in store-level inventory accuracy.” — CEO Steve Lawrence .
  • “During the first quarter, we saw growth in store traffic by customers earning over $100,000, increased by double digits.” — CFO Carl Ford .
  • “We are widening our comp sales guidance…We remain confident…which has allowed us to maintain the high end of our guidance.” — CFO Carl Ford .

Q&A Highlights

  • Higher-income cohort strength: traffic from households >$100k accelerated; retention is strong with cross‑store shopping and private brand uptake; core $50–$100k cohort inflected positive in April .
  • Gross margin resilience despite tariff scenarios: mitigation via pre‑tariff inventory, supplier cost sharing, pricing/markdown optimization; pressure seen more in sales elasticity than margins in scenarios .
  • Promotion cadence: broadly consistent YoY; targeted offers to drive loyalty; Stanley markdowns tied to discontinued colors and MAP breaks .
  • Jordan assortment expansion: initial SKUs in 145 doors; footwear more than doubled since launch; cleats/backpacks planned; expected to be a top‑20 brand by YE .
  • New store timing: leases slowed for 2026 to assess construction costs; shifts likely from Q1 to Q2, not reducing full-year count .

Estimates Context

  • Q1 2026 delivered adjusted EPS of $0.76 vs consensus $0.89* and revenue of $1.351B vs $1.372B*, both misses amid softer transactions and category headwinds .
  • Prior quarters: Q4 2025 adjusted EPS $1.96 vs $1.82* (beat) and revenue $1.677B vs $1.675B* (inline/beat); Q3 2025 adjusted EPS $0.98 vs $1.27* (miss) and revenue $1.343B vs $1.383B* (miss).
  • Estimate coverage: 15 EPS estimates and 18 revenue estimates for Q1 2026, reflecting robust analyst participation*.

Values marked with an asterisk (*) are from S&P Global consensus estimates.

Key Takeaways for Investors

  • Near-term: Embrace volatility—consumer demand is event-driven, with Q2-to-date down low single digits; watch Father’s Day and back-to-school cadence and tariff headlines for trading catalysts .
  • Margins: Despite tariff risk, gross margin guidance is maintained as mitigation levers (pre‑tariff inventory, mix, pricing) offset pressure; monitor shrink and softgoods mix durability .
  • Growth drivers: Jordan/Nike expansion, +10% eCommerce growth, RFID/handheld POS rollout, and new store vintages comping positive underpin medium-term share gains .
  • Capital allocation: Strong FCF supports buybacks ($99.9M) and dividends ($0.13 declared); capex reduced to preserve flexibility in uncertainty .
  • Inventory strategy: $85M pull-forward in evergreen categories and >$120M receipt reductions position ASO to defend value proposition and respond to tariff outcomes .
  • Cohort mix: Double-digit growth in >$100k income traffic and April inflection in $50–$100k cohort suggest continued trade-down/market share potential for value-led assortments .
  • Watch list: Ammo/marine softness, SG&A normalization post Q1 launch investments ($7.5M), and 2026 store timing adjustments (Q1→Q2) as key variables .

Appendix: Additional Q1 Materials

  • Dividend: Board declared $0.13 per share for Q1; payable July 17, 2025 (record date June 19, 2025) .
  • Earnings logistics: Q1 release and call held June 10, 2025 .
  • Store openings: 5 new stores in Q1, 303 total; ongoing footprint expansion into new states .