Academy Sports and Outdoors (NASDAQ:ASO) reported fourth-quarter fiscal 2025 results that management said came in largely as forecast, while outlining fiscal 2026 guidance that assumes continued consumer pressure in the first half of the year alongside a mix of company-led initiatives and potential macro tailwinds.
Fourth-quarter results: sales grew, comps declined
CEO Steve Lawrence said the company delivered fourth-quarter sales of $1.7 billion, up 2.5% year over year, with comparable sales down 1.6%. CFO Carl Ford added that the comp decline reflected a 6.4% drop in transactions, partially offset by a 5.1% increase in ticket.
Lawrence said Thanksgiving and Cyber Week were strong, followed by softer spending in mid-December and a surge in the week leading into Christmas that continued into the final week of the month. He said January was softer than anticipated due largely to winter storms in the final 10 days of the month that led roughly half of stores to be partially or fully shut down for two to three days, before demand rebounded after stores reopened.
In response to a question, management estimated the storm-related closures were roughly a 100-basis-point headwind to fourth-quarter comparable sales. Lawrence added that if those days were excluded, the business would have been running a positive comp in the mid-single-digit range.
Margins improved; SG&A reflected growth investments
Ford said fourth-quarter gross margin was 33.6%, up 140 basis points year over year and above the company’s implied guidance. He attributed most of the expansion to supply chain efficiency gains and the lapping of prior-year port disruption costs. He said merchandise margin, inclusive of tariffs, was flat as the company managed pricing while maintaining its value strategy.
SG&A expenses were 23.7% of sales, increasing by about $21 million or 70 basis points. Ford said the increase was driven by growth initiatives totaling about 135 basis points, including 115 basis points from new store growth and 20 basis points from technology investments supporting omni-channel growth. He also noted that store closures created deleverage because the company continued to incur labor costs during the shutdowns.
Full-year 2025: top-line growth, AUR and digital gains
For fiscal 2025, Lawrence said Academy grew sales to $6.05 billion, up 2%, which he said resulted in market share gains across its footprint. He highlighted several initiatives and operating updates discussed on the call:
- Tariff mitigation and pricing: Lawrence said the company offset incremental tariffs that were levied in late Q1 and Q2 through sourcing country diversification, pulling inventory forward at lower costs, and pricing and promotional optimization. He said Academy delivered a full-year 6% annual average unit retail (AUR) increase and a 34.8% gross margin rate, up 90 basis points year over year, while monitoring competitive pricing to maintain its value perception.
- E-commerce growth and AI: Lawrence said dot-com revenue increased 13.6%, driven in part by improvements to site search and experience fundamentals, use of AI for item data enrichment, image generation for private-brand apparel, and the launch of an on-site agentic AI assistant called Scout prior to Christmas.
- New store expansion: The company opened 24 new stores in fiscal 2025, which management said are tracking ahead of year-one performance expectations. Stores opened in 2022 through 2024 that are now in the comp base posted mid-single-digit comp increases, and management expects this tailwind to grow as the 2025 store cohort enters the comp base during 2026.
- In-stock improvements via RFID: Lawrence said Academy improved in-stocks by 500 basis points through assortment rationalization and a rollout of RFID scanners to all stores in Q2. The company shifted to weekly counts and updates for RFID-labeled brands representing about 25% of annual volume.
- Assortment and brand additions: Lawrence cited adding or expanding brands such as Jordan, Converse, Birkenstock, Fila, Baseball Lifestyle 101, Turtlebox speakers, and Ray-Ban Meta.
- Loyalty program growth: Management said My Academy Rewards has surpassed 13 million members since launching in mid-2024.
- Customer mix shift: Lawrence said the company saw 10% growth in customers with household income above $100,000, which he described as the company’s largest and fastest-growing cohort, while reiterating that Academy remains committed to value positioning.
Fiscal 2026 guidance: growth expected, with macro and internal drivers
Management guided for fiscal 2026 net sales of $6.18 billion to $6.36 billion, representing 2% to 5% growth, with comparable sales of -1% to +2% (midpoint +0.5%). Lawrence said the low end of guidance assumes a continued muted backdrop for discretionary spending, with inflationary pressure on imported goods continuing through the first half of the year, then stabilizing as the company laps tariff-related costs in the back half.
Ford said Academy expects gross margin of 34.5% to 35.0%, GAAP net income of $380 million to $415 million, and adjusted net income of $410 million to $445 million (excluding about $37 million of stock-based compensation). GAAP diluted EPS is expected to be $5.65 to $6.15, with adjusted diluted EPS of $6.10 to $6.60, based on an expected diluted weighted average share count of 67 million (excluding potential future repurchases).
Ford said adjusted free cash flow is expected to be $250 million to $300 million, after $200 million to $240 million of capital expenditures tied primarily to strategic growth initiatives.
Management pointed to several potential external tailwinds in 2026, including expectations for higher tax refunds, the World Cup being hosted in the U.S. with matches in Academy’s footprint, and the 250th anniversary of the United States. Lawrence estimated the World Cup could contribute about 30 basis points to the year.
Ford said the company’s internal initiatives support the midpoint of guidance, while the range reflects whether external tailwinds are negated by macro headwinds (low end) or provide a net benefit (high end).
Key 2026 initiatives: digital, loyalty/credit relaunch, merchandising, and RFID
Looking ahead, management emphasized continued digital investment, including an AI-based semantic search platform planned for late Q2, efforts with platforms such as OpenAI and Google to surface Academy’s catalog within their ecosystems, expansion of drop-ship assortment, and growth through third-party storefronts.
A major 2026 milestone will be the relaunch of the Academy credit card and integration with My Academy Rewards into a unified, three-tier program. Lawrence said the relaunch is planned for Q2 ahead of Father’s Day and includes converting existing cardholders and offering a reactivation reward on reissued cards. Management said the loyalty program will consolidate and target discounts the company already uses and is not expected to meaningfully impact gross margin.
On merchandising, the company plans to expand the Jordan shop concept into 55 additional stores this spring (more than 200 total). It also highlighted growth in work and western wear, an exclusive U.S. brick-and-mortar partnership with HYROX with branded training equipment going to over 70 stores, and continued expansion in “baseball lifestyle” categories.
Academy also plans to expand RFID tagging to include private-brand apparel and footwear, which management said would enable weekly counts and updates on roughly one-third of sales by the end of spring.
For store growth, management reaffirmed plans to open 20 to 25 stores in 2026, primarily as infill in existing markets. Ford said openings will be more back-half weighted than fiscal 2025 after the company initially paused signing new leases amid tariff-driven construction cost uncertainty.
On capital returns, Ford said the board approved a 15% dividend increase to $0.15 per share, payable April 10, 2026 to stockholders of record as of March 20, 2025. He also said the company ended fiscal 2025 with $437 million remaining under its repurchase authorization.
About Academy Sports and Outdoors (NASDAQ:ASO)
Academy Sports and Outdoors is a leading specialty retailer of sporting goods and outdoor gear, operating more than 260 stores across the United States. Headquartered in Katy, Texas, the company offers a broad assortment of merchandise spanning athletic footwear and apparel, team sports equipment, camping and outdoor recreation products, hunting and fishing supplies, and fitness accessories. In addition to its brick-and-mortar footprint, Academy serves customers through its e-commerce platform, offering online ordering, in-store pickup, and home delivery options.
The company’s product portfolio includes seasonal and year-round categories designed to meet the needs of both casual enthusiasts and serious athletes.
