Academy Sports CEO Flags Pressure on Lower-Income Shoppers

Academy Sports and Outdoors Inc. (NASDAQ:ASO) stock surged over 11% Wednesday after the sporting goods retailer reported fiscal second-quarter adjusted earnings that beat Wall Street expectations and raised its full-year earnings outlook. Revenue was roughly in line with estimates.

Earnings Beat As Sales Rise 3%

Academy Sports reported second-quarter net sales of $1.647 billion, up 3% from $1.600 billion a year earlier. Sales were just below the $1.650 billion analyst estimate.

Adjusted earnings rose 19.1% to $2.31 per share from $1.94, beating the $2.08 estimate.

GAAP diluted EPS increased 17.3% to $2.17 from $1.85. Net income rose 10% to $137.9 million from $125.4 million.

Comparable sales declined 0.4%, compared with a 0.2% increase a year earlier. However, e-commerce sales jumped 12.8%. New stores posted positive comparable sales in the mid-single-digit range.

Gross margin expanded to 40.4% from 36%. Operating income increased to $246.4 million from $172.4 million.

Academy opened three stores across Pennsylvania and Tennessee during the quarter, bringing its total to 327 locations. It plans to open 11 stores in the third quarter, with the remaining fiscal 2026 openings planned for the fourth quarter.

Academy Raises Earnings Outlook

Academy raised its fiscal 2026 adjusted EPS guidance to $6.50-$6.90 from $6.40-$6.80, compared with the $6.46 analyst estimate.

The company also raised its GAAP EPS outlook to $6.05-$6.45 from $5.95-$6.35, versus the $6.10 estimate.

Academy affirmed its net sales forecast of $6.23 billion-$6.355 billion, compared with the $6.331 billion estimate. It continues to expect sales growth of 3%-5% and comparable sales ranging from flat to growth of 2%.

The retailer raised its adjusted free cash flow outlook to $300 million-$350 million from $250 million-$300 million. Capital expenditure guidance remained at $200 million-$240 million.

Cash Flow And Capital Returns

Academy generated $349 million in operating cash flow during the first 26 weeks, up from $236 million a year earlier. Adjusted free cash flow climbed to $237.6 million from $128.1 million.

Cash and cash equivalents stood at $298.2 million as of Aug. 1, compared with $300.9 million a year earlier. Merchandise inventory increased 4.4% to $1.657 billion, although inventory per store fell 5.6% in units and 2.3% in dollars. Long-term debt stood at $494.2 million.

The company repurchased $182.1 million of stock during the first 26 weeks, up from $99.9 million a year earlier. It paid $19 million in dividends, compared with $17.4 million a year ago.

Academy’s board also declared a quarterly dividend of 15 cents per share, payable Oct. 14 to shareholders of record as of Sept. 16.

Management Commentary

CEO Steve Lawrence said consumer spending remains pressured, particularly among lower-income households.

However, he said Academy is reinvesting tariff-related benefits into value while expanding new brands and categories and accelerating its store, omnichannel and loyalty initiatives.

Lawrence said those efforts are helping the company gain market share and strengthen customer engagement while supporting confidence in its fiscal 2026 sales and earnings goals.

ASO Stock Price Activity: Academy Sports shares were up 11.59% at $49.89 during premarket trading on Wednesday, according to Benzinga Pro data.

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