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Academy Sports & Outdoors, Inc. (ASO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 results and the 8‑K 2.02/earnings call are not yet available (company is scheduled to report around Dec 9–10, 2025); this recap synthesizes Q1–Q2 performance, updated FY2025 guidance (raised low-end sales outlook), and Q3-period press releases to frame expectations .
  • Sequential momentum into Q2: net sales +3.3% to $1.60B, first positive comp since 2021 (+0.2%), merchandise margin +40 bps, eCommerce +17.7%; SG&A deleveraged 150 bps due to growth investments .
  • Guidance narrowed: FY2025 net sales low-end raised to $6.0B (from $5.97B), comp range tightened to -3.0% to +1.0%, tax rate guided ~23.5%; adjusted EPS maintained at $5.60–$6.30 .
  • Holiday/Q3 catalysts: five Q4 store openings (24 total in FY2025), curated holiday promotions, expanded Nike/Jordan access, loyalty program engagement—likely supports traffic and basket size into Q3/Q4 .
  • Tariff risk mitigated via sourcing diversification, inventory pull-forward, pricing optimization; management expects to “mostly offset” impacts while defending value positioning .

What Went Well and What Went Wrong

What Went Well

  • First positive quarterly comp in years; net sales +3.3% to $1.60B; eCommerce penetration up 120 bps with ~18% growth; gross margin essentially flat YoY at 36.0% despite mix/shipping headwinds .
  • New stores and brands driving momentum: 2022/2023 store vintages shifted to mid-single-digit comps; Jordan/Nike expansions delivering double-digit growth in key lines; RFID/handhelds improving in-stock and save-the-sale .
  • Higher-income cohorts trading into Academy, offsetting low-income softness; management cites share gains across apparel, footwear, fishing and outdoor cooking .

What Went Wrong

  • SG&A deleveraged 150 bps in Q2 from growth investments (new stores, tech, depreciation) and Jordan/Nike support; EBIT margin compressed to 10.8% .
  • Shrink and eCommerce shipping costs were headwinds to gross margin (shrink ~20 bps, shipping ~10 bps); ammo category remained challenged on price sensitivity and industry supply .
  • Consumer demand remained episodic/choppy, with lower-income cohorts under pressure; management expects AUR increases in back half as tariffs flow through costs, requiring careful price/value navigation .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Net Sales ($USD Millions)$1,351.4 $1,599.8 — (pending)
Comparable Sales (%)-3.7% +0.2% — (pending)
Gross Margin Rate (%)34.0% 36.0% — (pending)
Operating Income ($USD Millions)$69.3 $172.4 — (pending)
Net Income ($USD Millions)$46.1 $125.4 — (pending)
Diluted GAAP EPS ($)$0.68 $1.85 — (pending)
Adjusted Diluted EPS ($)$0.76 $1.94 — (pending)

KPIs and operating metrics:

KPIQ1 2025Q2 2025Q3 2025
eCommerce Sales Growth (%)+10.2% +17.7% — (pending)
Stores Open (period-end)303 306 24 new stores expected FY2025; five opened in Q4 within Q3 period window
Inventory per Store (Units/Dollars)+6.5% units; +7.8% dollars +4.5% units; +8.2% dollars — (pending)
Cash & Equivalents ($USD Millions)$285.1 $300.9 — (pending)
Dividends Declared (per share)$0.13 (Q1 dividend declared Jun 5) $0.13 (declared Aug 28; payable Oct 9) — (pending)

Category performance (Q2 detail):

CategoryQ1 2025Q2 2025
Footwear/Apparel comps (%)Positive drivers (athletic footwear +4.5% noted) Footwear/Apparel each +3.7–3.8% comps (softlines)
Outdoor comps (%)Down low single digits (ammo pressured) Outdoor +2.5%; ammo remained challenged

Guidance Changes

MetricPeriodPrevious Guidance (Q1 Update)Current Guidance (Q2 Update)Change
Net Sales ($B)FY2025$5.97–$6.265 $6.00–$6.265 Raised low end
Comparable Sales (%)FY2025-4.0% to +1.0% -3.0% to +1.0% Raised low end
Gross Margin Rate (%)FY202534.0%–34.5% 34.0%–34.5% Maintained
GAAP Net Income ($MM)FY2025$350–$410 $360–$410 Raised low end
Adjusted Net Income ($MM)FY2025$375–$435 $380–$430 Narrowed (low end up, high end down)
GAAP Diluted EPS ($)FY2025$5.10–$5.90 $5.30–$6.00 Raised low end
Adjusted Diluted EPS ($)FY2025$5.45–$6.25 $5.60–$6.30 Raised low end
Diluted Shares (MM)FY2025~69 ~68 Lower share count
Capital Expenditures ($MM)FY2025$180–$220 $180–$220 Maintained
Adjusted Free Cash Flow ($MM)FY2025$250–$320 $250–$320 Maintained
Tax Rate (%)FY202522–23% (assumption) ~23.5% Slightly higher point estimate

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1)Current Period (Q2)Trend
Technology/RFID & handheldsChain-wide RFID roll-out and handheld POS; 20% inventory accuracy improvement; save‑the‑sale up ~900% per store Full deployment before peak; weekly counts across major brands; improved in-stock and conversion Scaling benefits building
Supply chain/DC healthGeorgia DC WMS issues weighed on 2024; improving Significant improvement; aided in-stock; ~100 bps long-run supply chain opportunity intact Normalizing; productivity upside
Tariffs/macroMitigation playbook: sourcing diversification, inventory pull-forward, pricing optimization; exposure to China private brands targeting ~6% by year-end “Mostly offset” expected; AURs to creep up H2; private brand value to defend spread; COGS exposure ~6–7% for owned brands Managed but fluid
Product performanceJordan launched 145 doors; Nike expansion; early strength Jordan/Nike driving double-digit growth; expanded assortments (e.g., cleats/backpacks) Tailwind intensifying
Regional/cohort trendsTrade-down of upper-income cohorts emerging; episodic shopping Upper-income traffic up double digits; middle-income stable; lower-income erosion moderating; border stores underperforming Mix shifts favorable
Loyalty/marketing“Fun, Can’t Lose” campaign; +2M target adds to myAcademy; 10 bps ad spend increase 12M+ members; Summer of Savings boosted enrollments, redemption, sales Engagement rising

Management Commentary

  • CEO: “Customers are gravitating to our diversified assortment and our value proposition is resonating with them… which has allowed us to pick up market share in the first half of the year.” .
  • CFO: “We are tightening the low end of our comp sales guidance from negative 4% to negative 3%… gross margin 34%–34.5% and approximately 100 bps of SG&A deleverage for the year.” .
  • CEO on tariffs: “We have the strategy in place which should mostly offset the impacts of tariffs… while still being able to serve customers and delivering a strong value proposition.” .

Q&A Highlights

  • Margin composition: Merchandise margin +40 bps; shrink (-20 bps) and eComm shipping (-10 bps) headwinds; expectation of modest shrink headwind for year .
  • SG&A cadence: Q1 deleverage 290 bps (Jordan/Nike launch/tech); Q2 150 bps; tapering expected; ~100 bps deleverage for FY at midpoint .
  • Cohort mix: Upper-income traffic up double digits; middle-income stable; lower-income declines moderating; border/Hispanic-indexed stores under trend .
  • AUR and elasticity: AUR up low–mid single digits in Q2; expect high-single/double-digit AUR increases in H2; mix of promo/markdown optimization to defend value and manage elasticity .
  • New stores: Year-1 sales $12–$16M; ROIC 20%+; comps moving to mid-single digits as markets mature .

Estimates Context

  • S&P Global consensus for Q3 FY2025 could not be retrieved due to current API rate limits; therefore, we do not present consensus comparisons here. Values retrieved from S&P Global.*
  • Public scheduling signals point to a Dec 9–10, 2025 earnings date for Q3 FY2025 .

Key Takeaways for Investors

  • Into Q3, Academy enters peak season with positive momentum from Q2 (first positive comp since 2021), brand expansions (Jordan/Nike), and omnichannel improvements—setup that can support holiday comps and margin mix despite macro/tariff headwinds .
  • FY2025 guide tightening signals improving visibility; low-end sales/EPS raised; share count lower supports EPS optics; watch tax rate at ~23.5% .
  • SG&A deleverage is investment-led (stores, tech, digital); expect moderation as initiatives scale, but near-term expense pressure remains a key valuation debate .
  • Merchandise margin tailwinds (assortment/markdown optimization/private brands) can offset shrink/shipping headwinds; gross margin guide implies stability/upside (+10–160 bps YoY scenarios) .
  • Traffic mix shift toward upper-income cohorts and market share gains across core categories are structural positives; monitor lower-income cohort elasticity as AURs rise in H2 .
  • Inventory strategy (evergreen pull-forward, domestic pre-tariff) and diversified sourcing reduce tariff exposure risk; expect AUR lifts and pricing tactics to preserve value positioning .
  • Near-term trading: Holiday cadence, Q3 earnings date, and any updates to FY guide are key stock catalysts; brand/shop rollouts and loyalty program traction are incremental positives .

Note: Q3 FY2025 8‑K 2.02 press release and earnings call transcript were not available at time of writing; this recap compiles Q1–Q2 disclosures, FY2025 guidance, and Q3-period press releases to frame expectations and key drivers .