Academy Sports and Outdoors Inc (ASO) Q2 2025 Earnings Call Highlights: Strong E-commerce …

This article first appeared on GuruFocus.

• Net Sales: Approximately $1.6 billion, up 3.3% year-over-year.

• Comparable Sales: Increased by 0.2%.

• Gross Margin: 36%, down 2 foundation factors from final yr.

• E-commerce Growth: Approximately 18% enhance in Q2.

• SG&A Expenses: 25.3% of gross sales, elevated by $36 million or 150 foundation factors.

• Operating Income: $172 million.

• Diluted Earnings Per Share: $1.85.

• Adjusted Earnings Per Share: $1.94.

• Inventory Per Store: Units up 4.6%, {dollars} up 8.2%.

• Cash Position: $301 million with a $1 billion undrawn revolver.

• Free Cash Flow: $21.7 million in Q2.

• Store Count: Ended the quarter with 306 shops in 21 states.

• New Stores Opened: Three new places in Fort Walton Beach, Florida, Virginia, and Morgantown, West Virginia.

• Capital Expenditure: Approximately $60 million in strategic initiatives.

• Guidance Update: Comp gross sales steerage tightened to a variety of -3% to +1% for fiscal 2025.

Release Date: September 02, 2025

For the entire transcript of the earnings name, please seek advice from the full earnings call transcript.

• Academy Sports and Outdoors Inc (NASDAQ:ASO) reported a 3.3% enhance in internet gross sales for the second quarter, with a comp enhance of 0.2%, exhibiting enchancment from earlier quarters.

• The firm’s e-commerce channel skilled important development, with a constructive comp of roughly 18%, indicating profitable digital initiatives.

• ASO opened three new shops in the course of the quarter, contributing to its development technique, and plans to open 20 to 25 new places in 2025.

• The firm noticed significant market share beneficial properties throughout key classes similar to attire, footwear, sporting items, and out of doors cooking.

• ASO’s loyalty program, myAcademy Rewards, has added over 12 million clients, enhancing buyer engagement and driving gross sales uplift.

• The firm skilled a decline in transactions by 1.4%, indicating potential challenges in buyer foot site visitors.

• SG&A bills elevated by 150 foundation factors, pushed by new retailer development and know-how investments, impacting general profitability.

• ASO confronted challenges with seasonal classes similar to swim and summer season footwear on account of a cooler and wetter begin to the summer season.

• The decrease revenue client section continues to indicate site visitors erosion, though the tempo of decline has slowed in comparison with earlier quarters.

• The firm is coping with tariff impacts, which have necessitated value changes and strategic sourcing adjustments to mitigate value pressures.

Q: Can you focus on the buyer habits put up back-to-school and whether or not the valleys between procuring occasions would possibly reduce later within the yr? A: Steven Lawrence, CEO: We proceed to see episodic procuring patterns. We had a constructive comp throughout back-to-school, which was encouraging. There was a slight pullback put up back-to-school, attributed to much less clearance exercise round Labor Day and a shift in searching season. However, we’re optimistic in regards to the the rest of the quarter as we lap softer comps from final yr.

Q: How are tariffs impacting ticket costs, and will this strain proceed into 2026? A: Steven Lawrence, CEO: AURs had been up low to mid-single digits, contributing to a 1.5% enhance in common ticket. We anticipate extra value changes within the again half of the yr as tariffs influence prices. Our objective is to finish crucial value changes by year-end, however it’s a fluid state of affairs. We imagine our worth proposition stays sturdy regardless of larger costs.

Q: Your steerage implies good working leverage within the second half. What are the assumptions round SG&A and tariffs? A: Earl Ford, CFO: We anticipate about 100 foundation factors of SG&A deleverage for the total yr, pushed by development initiatives. For tariffs, we have mitigated impacts by way of varied methods, together with partnering with factories, diversifying sourcing, and adjusting costs. We imagine these actions will offset most tariff impacts.

Q: Can you present extra element on the efficiency of Nike and Jordan manufacturers? A: Steven Lawrence, CEO: We’re excited in regards to the efficiency of Nike and Jordan, each exhibiting double-digit development. While we do not have unique merchandise, we’ve entry to premium merchandise just like the Nike 18 and 270s, that are performing nicely. The focus is on providing higher-end merchandise extra broadly, which is resonating with clients.

Q: How is the promotional setting affecting what you are promoting, and is merchandise margin benefiting from the combo? A: Steven Lawrence, CEO: The promotional setting is barely extra intense than final yr however not as aggressive as pre-pandemic ranges. Customers are responding nicely to promotions, aggregating purchases throughout promo durations. While attire and footwear, that are higher-margin classes, carried out nicely, the margin combine was constant throughout classes in Q2.

For the entire transcript of the earnings name, please seek advice from the full earnings call transcript.