Academy Sports’ most recent quarter was met with a negative market reaction as the company’s sales trajectory fell short of Wall Street’s expectations. Management cited several drivers behind the quarter’s performance, including a strong holiday sales surge offset by a softer January, which was impacted by widespread winter store closures. CEO Steve Lawrence also highlighted the continued impact of inflationary pressures on imported goods and the success of promotional optimization, which improved gross margins, even as same-store sales declined. Lawrence acknowledged, “January was softer than we anticipated, primarily driven by large winter storms,” but noted a rebound once stores reopened.
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Revenue: $1.72 billion vs analyst estimates of $1.76 billion (2.5% year-on-year growth, 2.2% miss)
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Adjusted EPS: $1.97 vs analyst expectations of $2.05 (4% miss)
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Adjusted EBITDA: $202.6 million vs analyst estimates of $218.7 million (11.8% margin, 7.4% miss)
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Adjusted EPS guidance for the upcoming financial year 2026 is $6.35 at the midpoint, missing analyst estimates by 2.6%
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Operating Margin: 9.9%, in line with the same quarter last year
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Locations: 322 at quarter end, up from 298 in the same quarter last year
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Same-Store Sales fell 1.6% year on year (-3% in the same quarter last year)
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Market Capitalization: $3.39 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
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Christopher Horvers (JPMorgan) asked about the sales impact from January store closures. CEO Steve Lawrence estimated these storms created a 100 basis-point headwind for the quarter and noted sales trends improved once stores reopened.
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Simeon Gutman (Morgan Stanley) questioned why the return to positive comparable sales is taking longer despite new initiatives. Lawrence emphasized persistent consumer pressure, but highlighted that new stores, digital growth, and the loyalty relaunch should accelerate progress in 2026.
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John Heinbockel (Guggenheim Securities) inquired about the relative impact of new store openings versus the loyalty program relaunch. Lawrence said both should provide a similar comp sales lift, with the full benefit of the loyalty program realized in the back half of the year.
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Brian Nagel (Oppenheimer) asked if anything besides macroeconomic factors was holding back comp sales. CFO Carl Ford reiterated that economic health was the main headwind, particularly among lower-income consumers, but that internal initiatives are expected to overcome these pressures.
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Michael Lasser (UBS) probed how much macro tailwinds like the World Cup were factored into guidance. Ford clarified that self-help initiatives are the primary growth drivers, with external events providing incremental upside at the high end of guidance.