Academy Sports & Outdoors (ASO) Q1 2025 earnings summary

Executive summary

• Q1 2024 net sales declined 1.4% year-over-year to $1.36 billion, with comparable sales down 5.7%.

• Net income for Q1 was $76.5 million, down 18.6% year-over-year, with diluted EPS at $1.01 and adjusted EPS at $1.08.

• Customers remain pressured by inflation and depleted savings, leading to cautious discretionary spending.

• Dot-com/e-commerce sales grew to 9% of merchandise sales, up from 8.2% year-over-year.

• Opened 2 new stores in Q1 and plans to open 15–17 stores in 2024.

Financial highlights

• Gross margin rate was 33.4%, down 40 basis points year-over-year, mainly due to lower merchandise margins and increased promotions.

• Operating income decreased 18.9% to $102.4 million, with operating margin at 7.5%.

• Adjusted EBITDA was $142.6 million, down from $167.6 million year-over-year.

• Adjusted free cash flow surged to $167.3 million from $11.6 million a year ago.

• Inventory balance was $1.36 billion, down 2% year-over-year, with inventory units per store down 11.5%.

Outlook and guidance

• Fiscal 2024 net sales expected between $6.07 billion and $6.35 billion; comparable sales guidance of -4% to +1%.

• Gross margin rate guidance remains 34.3%-34.7%.

• GAAP net income expected between $455 million and $530 million; GAAP diluted EPS forecasted at $5.90 to $7.05.

• Free cash flow expected between $290 million and $375 million, with $225 million-$275 million in capital expenditures.

• Management expects continued investment in omnichannel capabilities and store expansion to drive future growth.