Academy Sports & Outdoors (ASO) Oppenheimer's 24th Annual Virtual Consumer Growth and E-Commerce Conference summary

Consumer environment and behavior

• Moderate-income consumers are under pressure from high credit card debt and persistent inflation, leading to cautious spending.

• Shoppers are gravitating toward value offerings, private labels, and promotions, but will spend on new or desirable products.

• Shopping is more episodic, focused on need-based occasions like holidays and back-to-school periods.

• Credit quality is declining, with lower FICO scores and rising delinquencies among applicants.

• The environment is neutral to slightly worsening, with no signs of improvement in consumer health.

Strategic initiatives and operational adjustments

• Leaning into promotions and value during key shopping periods, with targeted marketing using a new customer data platform.

• Launched a new loyalty program, myAcademy, to engage non-credit card customers and offer targeted value.

• Expanded digital capabilities, including a partnership with DoorDash for same-day delivery.

• Focused on driving productivity in existing stores and increasing dot-com penetration from 11% to a targeted 15% in five years.

• Investing in modernizing distribution centers and shifting to more digital, one-to-one marketing.

Financial performance and capital allocation

• Q1 comp store sales declined 5.7%, but dot-com sales grew 7.5% and outdoor business showed strength.

• New stores from the 2022 vintage comped positively, with 2023 stores performing even better.

• Generated $200 million in operating cash flow, invested $32 million in new stores, repurchased $122 million in stock, and paid $8 million in dividends.

• Cash is up $80 million and debt down $100 million year-over-year, maintaining a low-leverage balance sheet.

• Top decile profitability and strong cash flow support long-term growth investments.