8-K: Academy Sports Posts Positive Q2 Comp Sales, Raises FY25 Outlook

Academy Sports and Outdoors, Inc. reported a positive comparable sales increase in Q2 2025 and raised the low end of its fiscal 2025 guidance for sales, net income, and EPS.

Summary

• Net sales for the second quarter ended August 2, 2025, increased by 3.3% to $1,599.8 million, up from $1,549.0 million in the prior year.
• Comparable sales for the second quarter increased by 0.2%, marking a positive inflection after a (6.9)% decline in the same period last year.
• Diluted GAAP EPS for Q2 2025 was $1.85, a decrease from $1.95 in Q2 2024.
• Adjusted diluted EPS for Q2 2025 was $1.94, down from $2.03 in Q2 2024.
• Net income for the second quarter decreased by 12.1% to $125.4 million from $142.6 million year-over-year.
• The company opened three new stores during the second quarter, bringing the total to 306 locations across 21 states, and plans to open 20 to 25 stores in fiscal 2025.
• Fiscal 2025 guidance was updated, narrowing the low end of net sales guidance from -4.0% to -3.0%, resulting in an updated range of -3.0% to positive 1.0%.
• The low end of GAAP net income guidance was raised from $350 million to $360 million, maintaining the high end at $410 million.
• The low end of GAAP diluted EPS guidance was raised from $5.10 to $5.30, and the high end was raised from $5.90 to $6.00.
• The company believes it has mostly offset the impact of current incremental tariffs for fiscal 2025 through various mitigation tactics.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the significant turnaround in comparable sales, the raised full-year guidance, and successful strategic initiatives like new store openings and brand expansion, despite a year-over-year decline in Q2 net income and EPS.

Positives

• Net sales increased by 3.3% year-over-year in the second quarter, reaching $1,599.8 million.
• Comparable sales turned positive with a 0.2% increase in Q2 2025, marking the third sequential quarter of improvement and the first positive quarterly comp since 2021.
• eCommerce sales increased by 17.7% in the second quarter.
• New stores are comping positive mid-single digits, indicating successful expansion.
• The company opened three new stores in Florida, Virginia, and West Virginia, contributing to its growth strategy.
• The low end of fiscal 2025 sales guidance was raised from -4.0% to -3.0%, reflecting increased confidence in future performance.
• The low end of fiscal 2025 GAAP net income guidance was raised from $350 million to $360 million.
• The low end of fiscal 2025 GAAP diluted EPS guidance was raised from $5.10 to $5.30, and the high end was raised from $5.90 to $6.00.
• Management believes it has mostly offset the impact of current incremental tariffs for fiscal 2025 through strategic actions.
• The company launched the Jordan Brand in 145 doors and online and expanded its Nike assortment, expecting Jordan Brand to be a top 20 brand by end of fiscal 2025.

Negatives

• Income before income tax decreased by 11.6% to $164.8 million in Q2 2025 compared to $186.5 million in Q2 2024.
• Net income decreased by 12.1% to $125.4 million in Q2 2025 from $142.6 million in Q2 2024.
• Diluted GAAP EPS decreased by 5.1% to $1.85 in Q2 2025 from $1.95 in Q2 2024.
• Adjusted diluted EPS decreased by 4.4% to $1.94 in Q2 2025 from $2.03 in Q2 2024.
• Gross margin slightly decreased to 36.0% in Q2 2025 from 36.1% in Q2 2024.
• Selling, general and administrative expenses increased as a percentage of sales to 25.3% in Q2 2025 from 23.8% in Q2 2024.
• Cash and cash equivalents decreased by 7.3% to $300.9 million as of August 2, 2025, from $324.6 million as of August 3, 2024.
• Merchandise inventories, net, increased by 16.2% to $1,587.6 million as of August 2, 2025, from $1,366.6 million as of August 3, 2024, with inventory per store up 4.5% in units and 8.2% in dollars.

Risks

• Changes in global, regional, or local economic, business, competitive, market, regulatory, environmental, and other factors could affect overall consumer spending or the industry.
• Possible effects of ongoing macroeconomic challenges, including inflation and higher interest rates, could impact financial performance.
• Trade policy changes, additional tariffs, or changes in existing tariffs could negatively affect the business.
• Geopolitical tensions may introduce uncertainties and impact operations.
• Changes to the financial health of customers could reduce consumer spending and demand for products.

Future Outlook

The company updated its fiscal 2025 guidance, narrowing the low end of net sales to a range of -3.0% to positive 1.0%. It also raised the low end of GAAP net income guidance to $360 million-$410 million and GAAP diluted EPS guidance to $5.30-$6.00. The tax rate for the year is expected to be 23.5%. Management anticipates continued momentum from strategic initiatives and believes it has largely mitigated tariff impacts for the year, positioning the company for long-term growth.

Management Comments

• Steve Lawrence, CEO: "We were pleased to see sales inflect to a positive comp in the second quarter, driven by steady improvements in the business that are a result of the progress we continue to make against our strategic initiatives. 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."
• Steve Lawrence, CEO: "As we head into the back half of the year, we believe momentum is building in the business and we are confident in our strategy and ability to come out of this year better positioned than ever to serve our customers and drive long-term growth."
• Carl Ford, CFO: "Sales for the second quarter continued to improve, and we saw meaningful acceleration in our strategic initiatives. In addition, we believe we now have additional visibility into tariff impacts and are well positioned to mitigate them."

Industry Context

Academy Sports + Outdoors is capitalizing on a lasting shift in customer spending towards outdoor activities, health and wellness, and experiences. The company's localized merchandising strategy and value proposition are resonating with a broad consumer base, allowing it to gain market share. The expansion of key brands like Nike and the launch of Jordan Brand are strategic moves to strengthen its product assortment and capture further market opportunities within the sporting goods and outdoor recreation sector.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• NA

Related Party Transactions

• NA

Stakeholder Impact

• Shareholders: Positive impact from the declaration of a quarterly cash dividend and the company's raised guidance, which may lead to increased investor confidence and potential share price appreciation.
• Customers: Benefit from new store openings, expanded product assortments (e.g., Jordan Brand, Nike), and a continued focus on value proposition and customer experience.
• Employees: Potential positive impact from company growth and expansion, though no specific details on employee-related initiatives were provided.
• Suppliers/Vendors: Continued partnership and collaboration, especially in tariff mitigation efforts and product assortment expansion.

Next Steps

• Open an additional 11 new stores in the third quarter of fiscal 2025.
• Continue to execute the plan to open a total of 20 to 25 new stores in fiscal 2025.
• Pay a quarterly cash dividend of $0.13 per share on October 9, 2025, to stockholders of record as of September 11, 2025.
• Host a conference call on September 2, 2025, at 10:00 a.m. Eastern Time to discuss financial results.

Key Dates

Recommendation

The company demonstrated a significant positive inflection in comparable sales for Q2 2025, a key indicator of retail health. Furthermore, the decision to raise the low end of its full-year guidance for net sales, net income, and EPS signals strong management confidence in the business's momentum and strategic initiatives. Despite year-over-year declines in Q2 profitability, the improved outlook and successful execution of growth strategies, including new store openings and brand expansions, suggest a positive trajectory for future performance. This filing indicates that the company is effectively navigating macroeconomic challenges and is well-positioned for continued growth, making it an attractive investment opportunity.

Keywords

Sporting Goods, Outdoor Recreation, Retail, Q2 Earnings, Financial Results, Comparable Sales, EPS, Net Sales, Guidance Update, New Stores, Tariff Mitigation, ASO