Academy Sports at Goldman Sachs Conference: Strategic Growth and Challenges

On Thursday, 04 September 2025, Academy Sports and Outdoors (NASDAQ:ASO) presented at the Goldman Sachs 32nd Annual Global Retailing Conference 2025. CEO Steve Lawrence and CFO Carl Ford outlined the company’s strategic initiatives and financial performance, highlighting positive trends in e-commerce and new store growth, while addressing challenges such as tariff impacts and shifts in customer demographics.

Key Takeaways

• Academy Sports saw positive comparable sales in Q2 2024, driven by strategic investments.
• E-commerce grew by 18% in Q2, with plans to increase penetration to 20-30% of total sales.
• The company has bought back one-third of its shares and paid down $1 billion in debt since going public.
• New store strategy focuses on suburban and exurban areas, aiming for 20-25 new stores in 2025.
• Tariff impacts are being managed through inventory strategies and domestic purchases.

Financial Results

• Positive comp sales in Q2 2024.
• Gross margin increased by 30 basis points year-to-date, attributed to merchandising efforts.
• SG&A deleveraged by 150 basis points in Q2 due to investments in strategic initiatives.
• Inventory increased by 8% in dollars and 4.5% in units as of Q2 to mitigate tariff impacts.
• Cash flow from operations represents approximately 10% of sales.

Operational Updates

• E-commerce business saw an 18% growth in Q2, driven by site enhancements.
• New stores opened recently are showing mid-single-digit positive comps.
• The Jordan brand launched in 145 stores, contributing to double-digit growth alongside Nike.
• The company is expanding the Jordan shop concept to all stores within two years.
• A new warehouse management system is being implemented to optimize the supply chain.

Future Outlook

• Academy Sports aims to sustain top-line growth and positive comps through merchandising and value propositions.
• Plans to expand the store network with a focus on suburban and exurban locations.
• E-commerce penetration is targeted to reach 20-30% of total sales.
• The company anticipates a similar consumer environment in the latter half of 2025, with potential inflationary pressures due to tariffs.
• Strategic vendor relationships and supply chain optimization remain priorities.

Q&A Highlights

• Traffic from lower-income quintiles is down, but higher-income quintiles are showing mid-teens growth.
• Consumers are responding well to e-commerce site enhancements.
• The company is managing tariff impacts by prepaying and leveraging domestic purchases.

For a detailed understanding of Academy Sports’ strategies and financial performance, refer to the full transcript below.

Full transcript - Goldman Sachs 32nd Annual Global Retailing Conference 2025:

Interviewer: Okay, hi everybody. Hi Larry, how are you? Thanks for coming to the Fireside Chat with Academy Sports and Outdoors. Today we have with us Steve Lawrence, Chief Executive Officer. Steve has served as CEO and on the Board of Directors since June 2023. We also have with us Carl Ford, Executive Vice President and Chief Financial Officer of Academy Sports and Outdoors. Thank you for joining us today.

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: Thanks for having us.

Interviewer: Thought we could start with just a high-level question, just how you would define the year of 2025 so far for Academy Sports and Outdoors.

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: It’s been an interesting year. I mean, I guess that’s what you get when you work in retail, right? It feels like every time things start to normalize, something else comes along. For us, obviously I think the backdrop of kind of the changing trade war has had some impact on how we’re navigating. On the flip side, we’ve got some really good initiatives we’ve been working on that I think are really starting to bear fruit, right? We talk about our long-range strategy, new store growth. We’re seeing the stores we’ve opened up in the past couple of years start to comp positive in the mid-single digits. We’re really excited about that. Our e-commerce business has been accelerating. We’ve done basically a back-to-basics approach there in terms of making the site easier to navigate, more functional, and the customers are really reacting.

We ran almost up 18% in Q2 on that, and that’s an acceleration versus Q1. We’ve got some new brands we’ve launched, which we got a little bit of press on. We introduced Jordan this year. That was a big plus for us, obviously. We rolled out some new technology. It’s been a year of investment while we’re kind of navigating the backdrop. What’s been really exciting is we’ve seen the business progressively improve as the investments are paying off, resulting in a positive comp for Q2, which we’re excited about.

Interviewer: That’s great. Maybe we can start with the health of the consumer first. I think if it’s the right characterization, you’re more middle quintile in terms of your consumer. I also think you started to benefit a little bit from a trade down from a higher-end consumer. Could you maybe go through some of the income cohorts and what you’re seeing across each?

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: Yeah, of course. One of the things that is a challenge, we operate a really diverse business, as you know. I mean, we sell things from apparel and footwear to grills, to firearms, to fishing rods, to sporting goods. There’s not one true source you can get all the data, right? One of the things we really lean into is Placer AI. I’m sure a lot of you guys are familiar with that. They give us some really interesting cuts on traffic data. They give us some demographic cuts that we’ve really been leaning into. If you kind of quintile the customer into, you know, 25 to under 25, 25 to 50, those are kind of the bottom two income quintiles. That’s about a third of our customers. We’ve seen traffic there down in the high single digits. That’s been a continuation.

That’s something we’ve seen over the last several years. I think that’s a function of that customer being more under pressure and opting out or trading down in some cases. The middle income quintile for us is $50,000 to $100,000. That’s another third of our customers. We’ve seen that be fairly stable. What’s been really exciting is over the past, you know, probably four quarters, we’ve seen an acceleration in the top two income quintiles, people making over $100,000 a year. We’ve seen a mid-teens acceleration there over the past couple of quarters. We saw it start happening last year in Q3. It built into Q4, it built into Q1, and once again into Q2. We feel like we’re adding customers in at the higher end faster than maybe we’re trading at the lower end. Carl and I talk about this, and Carl had a really good observation.

If you think about it, I think sometimes when people thought of Academy Sports and Outdoors because we’re so rooted in value, I think people associated with us over-indexing with a lower-income consumer and that being a risk, particularly if the economy is a challenge. I think we’ve de-risked the customer portfolio a little bit with some of the new customers we’ve added. I think a lot of the new brands we’ve added in, I think it’ll help give that customer permission to come shop at Academy Sports and Outdoors.

Interviewer: That’s great. That’s a good segue maybe to the newest brand that you’ve brought in, which you mentioned is Jordan. In addition to Jordan, you’ve also expanded your Nike assortment as well. I wondered if we could maybe take each initiative and ask a couple of questions around it. Jordan’s the biggest launch you’ve had in your company. I wondered what the expansion of the brand will look like going forward, what’s yet to come, and how much of a lift do you think that you’re getting as a result of this?

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: We launched Jordan at the very end of Q1, actually April 23rd. Obviously, Michael Jordan’s number is 23, so we had a home marketing campaign behind that. What we did is we launched the brand in 145 doors with a shop concept. If you walk into our stores, most of our stores, there’s an outer perimeter ring that has hard goods. That’s sporting goods, outdoor, et cetera, around it. We put apparel in the middle, and shoes is generally kind of at the backside of the store. The apparel pads split between men’s and women’s. We built right in front of the fitting room on each corner a Jordan shop, one for men’s, one for women’s, but they merchandise together. That’s expanded fixturing, more mannequins, a lot of visual collateral, obviously, to highlight the brand.

We put a big kind of ring around it so you could see it from all corners of the store as a wayfinding. We actually did something we’ve never done before. We took the footwear and we cross-merchandised that and put that on the fitting room wall. We used a big Jordan graphic there featuring some of their best athletes like Luca, who’s very important or was very important in our geography before he got traded to the Lakers, and built just a destination for Jordan between men’s and women’s. We replicated that on the kids’ floor as well. I think visually it was exciting and really engaged with the consumer. It really called out that the brand was there. A lot of great success with that. We haven’t cited Jordan-specific numbers and we don’t have a last year from Jordan.

We tend to lump Jordan and Nike together, at least when we’re talking externally. We’ve seen double-digit growth from that, the combination of Nike and Jordan, with Jordan being a significant contributor, but the Nike business is good as well. As we’ve progressed through the year, we’ve taken some categories within Jordan. For example, as we got into the summer months and football became important, we took cleats and we rolled those out to all stores. All stores had cleats in them. We’ve also taken categories like backpacks and rolled those out to more stores. As we go into next year, the plan would be to expand that shop concept broader into the chain. Right now the shops are in about half the door count. I think ultimately our goal would be to get it into all stores. That certainly I think will happen over the next two years.

We’re going to see how much we can get done next year.

Interviewer: Was Jordan something your existing customers were looking for, or was this a way to maybe again address the new customers?

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: I think it’s both. Like all retailers, we listen to customer feedback. One of the key places we get customer feedback is obviously anecdotal in store. We look at our website and there’s a term, null search terms. People search for something on your site, a brand or a product that you don’t have, and it’s generally a good indicator of something you should add to the assortment. The highest null search term we had on our site was Jordan. We knew there was an appetite for the product in our store. We certainly use that as we were talking to Nike about adding the brand in. We also told them the story of who Academy Sports and Outdoors is and how we think we help them reach customers.

We over-indexed the Hispanic consumer in some of our stores, helping them reach a customer they weren’t reaching through their own website or through other points of distribution. That certainly has helped us on one end where there are customers clearly who are shopping with us and had to go to other places to find the brand. At the same time, we also are tracking people coming into the store for the first time, signing up for loyalty. We can see they’re purchasing Jordan certainly, but in a lot of cases, they’re broadly shopping across the store and discovering the value we have in a private label or other merchandise categories we carry. It’s been a really nice addition in terms of both keeping older consumers who are shopping with us already shopping with us and attracting new consumers.

Interviewer: Could you maybe just talk a little bit about the Jordan assortment versus other retailers? Is there quite a bit of exclusivity or uniqueness in what you’re carrying?

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: I wouldn’t say there’s exclusivity. I think it’s the lens that you focus on. To be clear, and we talk about this very broadly, our focus is sports. One of the reasons I think our partnership with Nike is so strong, as well as Adidas and Under Armour and all the brands, is at our core, Academy Sports and Outdoors has always been known as the good retailer. You think about it as a kid’s beginning sport, right? We’re the entry point for that. When my kids were younger and my son wanted to play baseball, Academy is the place you take them to get the bat, the ball, the glove, the cleat. You can get out for under $100, right?

The next month when they decide they don’t want to play that sport anymore, you put that in the closet and then you go buy the shin guard and the ball for soccer. We’ve always been good at that. We’ve managed to add on a whole better bestseller, so we can now stay with that customer on that journey through sport. The belief of the brands is if you can get them wearing a pair of Nike cleats or Adidas cleats in their first sport, they’ll stick with that through life. I think that same idea applies with Jordan. Where we’re really focused in Jordan on footwear is on shoes that kids will play basketball in. We don’t have the limited edition 1992 retro Jordans that are limited edition. That’s not our model. At some point, it may evolve to that.

The opening assortment has been focused on kids’ shoes that they’ll play basketball in, cleats they’ll play football in. We’ve expanded into flip-flops, slides, and other categories that they may, if they’re not on the field, trade into socks. Because we launched in spring, we’re kind of at the tail end of basketball season, we only had two or three shoes in a couple of different colorways. That’s expanding dramatically as we go throughout the year. I think there’s five or six different styles and other color combinations that are on the floor now. That’ll just continue to grow as we progress. Nothing terribly exclusive, but I think the way we’re curating it and focusing it around sport is probably unique. On the apparel side, obviously, it’s a little harder.

Obviously, a kid will wear a basketball short or jersey or something like that, both from a sportswear kind of a casual perspective as well as to play in. There, I would say we have access to the full line and have a pretty robust assortment of goods there. Of course, we carry footballs and basketballs and all those other categories and sporting goods as well.

Interviewer: I think you’ve said that actually the additional Nike product that you’re now carrying might even be bigger than what Jordan is. I was wondering if there was a way you could contextualize that. What are you carrying now that you didn’t carry before? Is this new product bringing in a new customer? When thinking about both Nike and Jordan and the fact that Nike as an enterprise is going back into more wholesale points of distribution, how do you differentiate that?

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: I would tell you that it’s maybe less about getting access to stuff we didn’t have before, but certainly getting more access and spreading it deeper throughout the store. We’ve always had, you know, a 25, 50 store cluster where we do higher-end fashion, right? As we expanded Nike, what we actually did is we physically expanded the square footage for Nike, depending upon the store, 10%, 15%, gave more aisle frontage, very similar to what we did with Jordan. We brought in mannequins, signage, and really amped up the brand presence in the store. It’s getting more of that fashion product, having a bigger percentage of each store’s assortment, and driving that fashion deeper into the chain.

From an apparel perspective, you’ll see, you know, higher-end things like Phoenix fleece, which is a $70 fleece piece that they’ll sell, that in the past may have been in limited doors, it’ll be broadly distributed across the chain. In footwear, we would get some access to things like the 270, which is a hot shoe for them. We had it in a limited door count that’s now out in all stores. It’s actually our number one shoe from Nike. I think it’s a little more access, and then I think it’s more broad distribution of that. In some cases, it’s around timing. For example, they’re really focused, as most of you guys probably know, on the performance running category and reclaiming their heritage there. They’d come out with a new Vomero 18, and then they also have a Vomero Plus.

Traditionally, when they’d roll a shoe like that out, they would put it in like run specialty first, like Fleet Feet or somebody like that. Maybe six months later into, you know, a bigger box. After that, a year or two later, we might get access to it. We actually have that on the floor now, and I think we got it a couple of months after the release there. It’s trickling down much faster into our store as well. It’s both timing as well as probably breadth of the exposure we’re getting there.

Interviewer: We kind of talked about some of the shorter-term pieces too, you know, the product you’re getting, how it’s filtering through to all the stores. I think we’ve seen at other retailers that when you do carry a little bit more depth and breadth of a brand, perhaps it begets other brands, other higher quality brands. Have you seen any movement yet from brands that maybe you’ve wanted to bring into Academy Sports and Outdoors because of this bigger relationship with Nike?

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: I mean, I think that we talk a lot about Nike, and certainly they’re our number one brand and a very important brand. You know, with the category merchandising that we have that is diverse, it’s equally important to get whatever the hot new thing is happening in fishing or hunting or team sports. I think when some brands have seen how we can bring a brand to life, how we treat it, how we launch it, I think it’s opened up some doors. We’ve got some exciting new brands across the store. One we’ve talked about several times with people is there’s a brand out there called Turtlebox, right? It’s kind of a new emerging brand that is kind of like the Yeti for outdoor speakers, right? It’s got limited distribution. It’s something we’re a big believer in. They believe in us.

I think we share a customer base that we’re going after. You know, in drinkware, it’s going after, you know, obviously everybody knows the popularity Stanley had over the last couple of years, but Owala is right behind that, right? After that, there’s brands like HydroJug. We have some brands in apparel that are more outdoor-centric, like there’s a brand we carry called BURLEBO. I think in every case, having something you can point to, like how we launched Jordan or how we treated the Nike power-up, is a great proof point for them to say, "I want you to do that for my brand as well." We certainly use that to help unlock and open doors.

Interviewer: With all this merchandising effort and change, are we at a place now where you think that we can see a period of sustained comparable sales growth?

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: That’s our hope. That’s our belief. I think that it feels like the initiatives are gaining traction and momentum. Our belief is, obviously we’re here for growth, right? This year we returned to top-line growth and in second quarter positive comps. The goal would be to sustain that, right? I think we’ve got a really good game plan. I like the initiatives and how they’re playing out. Certainly, I think that as you think about the back half of the year and as tariffs continue to find their way throughout the cost of goods and you see retailers adjusting prices, I think we have been focused on value. Value is our North Star. It’s who we are at our core. It doesn’t mean we don’t sell higher-end better stuff. At our core, it’s offering great value on our private label, great value from the national brands that we carry.

When we think about all these price adjustments that are working their way through, we spend a lot of time making sure that we still maintain our relative value on those things. I think what we’re seeing at the high end is customers trading in. I think it is because of the value we’re offering. We think that’s going to continue to accelerate.

Interviewer: Maybe if we can now transition to tariffs, your June guidance update included a range of expectations for the tariff environment. Can you remind us of your exposure and what’s reflected in the guide?

Carl Ford, Executive Vice President and Chief Financial Officer, Academy Sports and Outdoors: Yeah, from a tariffs perspective, we’ve done a lot to offset them. I think the best way to not pass them on is to pay them. Pulled forward a lot of the inventory, about $100 million in the first half of the year at free tariff prices. That’s because we’ve partnered with our factories. I think we’ve done the other thing that you see proactive retailers do. If you look at our gross margin, we’re up 30 basis points year to date. Most of it’s driven by in the merchandising space. Our guide for the full year was to either be up 10 basis points at the low end so we can give back some margin or be up 60 basis points last year. We feel like we’re right in the middle.

From a preventative standpoint, I think we’ve done more than most associated with not having to pay that overseas tariff by capitalizing on domestic purchases. We hope to manifest that for the customers this fall.

Interviewer: If we could just move to margin, actually, in an environment, if the environment was to get tougher, how are you thinking about addressing any kind of incremental SG&A spend?

Carl Ford, Executive Vice President and Chief Financial Officer, Academy Sports and Outdoors: I think, let me just be straightforward. We delevered SG&A by 150 basis points in the second quarter, and more than all of it was related to these initiatives that Steve’s talking about. E-commerce being up by 18%, we’re proud of that. We’ve invested into that. The new stores, once they get around that 14th month and they’re comping mid-single digits, we’ve invested in new stores and the brand launches, which we outlaid some costs associated with that. Nike and Jordan together being up double digits, we’re proud of. On our base costs, we’re leveraging. As it relates to the fall, the annual guidance had embedded into it about 100 basis points of deleveraging SG&A. Every nickel of that is going to be focused on initiatives. As it relates to base, we’ve got a new CIO.

He’s doing a great job at controlling costs with his third parties and making sure that they’re kind of helping us offset some of those tariff pressures in a long-term partnership way. We think that we can lever in the back half of the year on the base, but still invest into these initiatives that are working well.

Interviewer: There are a few things I think you mentioned that are working well. The e-commerce acceleration is a big change. The new brands are a change too. This has all happened since your 2023 Investor Day when you put long-term targets out. Is there enough of a difference here where those targets might maybe look a little bit different than what you originally planned, or are we still kind of on track?

Carl Ford, Executive Vice President and Chief Financial Officer, Academy Sports and Outdoors: I think we’re at the same targets on what we’re shooting for. I think it’s going to be the same strategy. I would say that especially in the case of our new stores, we’ve pivoted that strategy quite a bit. We’ve learned a lot since we started reopening stores in 2022. From a long-term algorithm standpoint, we think the biggest growth engines are, number one, new stores. You know, 80% of Americans do not live within 10 miles of an Academy Sports and Outdoors. We have an amazing white space opportunity associated with smart expansion. From an e-commerce perspective, we’re at 11% penetration. I think 20% is relatively average in omnichannel. I think good omnichannel retailers do it at about 30%. We’ve brought in some new team there, and I’m really excited by the initial results. I think it’s got a lot of legs.

We’re just one year into launching a loyalty program. We’ve added 12 million of our customers to it. There’s a bit of enthusiasm. Two years ago, we did not have a centralized repository of customer information. We launched a customer database platform and last year launched a loyalty program. Those are working well. We’re seeing that we can augment the customer’s buying patterns from a frequency and basket size standpoint. I think the targets remain the same, and I think the tactics are generally the same. I would say we’ve learned some over the last two years.

Interviewer: If we could maybe just pivot to unit growth, I don’t think necessarily it’s something that the market is giving you guys a ton of credit for because it does seem like there’s quite a bit of white space, as you mentioned. Why do you think that is? Where do you think you need to go with your unit growth in order to maybe get some more credit? How are you seeing the store economics play out for some of these newer units?

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: We’ll probably tag team this one. I think that the street and the investor community values the new store expansion. I think what has concerned them is the lack of comp growth on the other side of it, right? We’ve really refined the new store opening strategy. If you think back, when we were privately held, pre-going public, we were opening stores, but primarily all the stores we’d opened up were in our core geography. We weren’t really adding any volume. We were just kind of cannibalizing our existing base. We stopped opening stores right after Ken and I both joined the company in 2019, 2018 and then the pandemic hit, obviously, right? We restarted opening stores. During that time period, we’d actually kind of disassembled our real estate team. We didn’t need one, right, if we weren’t opening stores. We had to reassemble the team.

I would say that initially when we started opening stores, the focus was on high income, high population density. That’s traditional retail thinking. There’s nothing wrong with that. It was a good start. I think what we found is we’ve been going on this journey. By the way, we also were very focused on new markets, less in our existing geography. I think as we’ve been going on this journey, we found other better predictors of success. At our core, say something really profound, go where your customers are, right? At our core, our customer is a family, right? We were opening some stores in some really dense urban population centers where there weren’t a lot of families or people with kids in the household. That basically shut off a chunk of our store where people didn’t need to shop, right?

Or we’re in a very urban dense area where people didn’t have houses with backyards. We couldn’t sell grills and patio furniture and pool stuff. We started pivoting to be a lot of the stores more in suburbs and exurbs. We found that if we can go more in that middle income quintile, that more blue collar $50,000 to $100,000 household income, that’s better for us candidly than a higher income quintile. Obviously, with categories like hunting and fishing, going to places where there’s high hunt, fish participation helps. We basically have aligned on a kind of a nine-box grid performance that really indicates success for us. I think you’re seeing us be much more laser-focused on where those new stores are going. We’re getting very predictive at what they’re opening up at.

When we came out with this new store strategy, we said, you know, they’re going to do $18 million. The reality is not every store is equal. What we found is that stores that are in our core geography, that, you know, there’s high brand recognition open up, they generally do about $16 million the first year. If we go to a new geography, for example, we opened up our first stores this year in Pennsylvania and Maryland, they tend to be closer to $12 million. What we’ve seen over time is that as the brand awareness wears in, the newer markets tend to start off a little slower, but they have a much steeper kind of ramp and end up, we think they’ll all end up around $20 million, let’s say on average.

They have a longer growth trajectory versus an existing market, which may start out a little higher but have a shallower ramp. We’ve been really smart about how we’re planning those things out. I think we’ve also found that it’s about balance, right? We want to open up in new markets, but, you know, the population is growing very rapidly in our existing footprint. We can’t ignore that idea or fact as other people are coming in. We’ve also refocused some of the stores back into our core geography and found that there’s a lot of, you know, mid-sized underserved communities where we can open up stores that are very productive and profitable. I think the strategy makes sense. I think it’s been refined. I think as we explain that to the investor community, they seem to understand it.

I think the thing that’s been missing has been the comp store growth, and we’re working on fixing that. Hopefully, this is the first of many comp quarters for us.

Interviewer: Carl, I wanted to just make sure we asked about capital allocation. You previously have said the company has flexibility to adjust your priorities during periods of disruption and uncertainty. Can you provide us with any update on your capital allocation strategy and how you’re planning into next year?

Carl Ford, Executive Vice President and Chief Financial Officer, Academy Sports and Outdoors: I’m really proud of our company’s capital allocation philosophy. If I rewind a little bit, the company went public in October of 2020. Since that time, we have bought back one-third of our shares on the open market for a weighted average price of $45 per share, and we’ve paid down $1 billion in debt. I love our balance sheet. I love our leverage. I like everything to do with the capital allocation. If you look at Academy Sports and Outdoors’ cash flow from operations as a rate to sales, which is a metric that I really like to benchmark, about 10% of every sales dollar we put in the bank, the cash flow from operation. That gives us the opportunity to do stuff with capital, right? We invest about 40% of that back into ourselves in the form of CapEx in stores. That’s a little bit underpenetrated.

I would tell you that 10% cash flow from operations as a rate to sales is top quartile in all of retail. 40% of that 10% we put back into ourselves in the form of initiatives that are working well. We pay a pretty modest dividend, and the rest of it we give back to shareholders in the form of share buyback. Nothing’s changed for us. We prioritize stability in the form of cash in the bank and a $1 billion undrawn credit facility. We invest into ourselves, and we give the rest back to shareholders.

Interviewer: Okay. We are asking five questions of every company that speaks with us at the conference. We’ve touched on some already, but could you talk about your expectations for the environment in the second half of 2025 versus what you saw in the first half of 2024 with the consumer? Do you think it’ll be the same, better, or worse?

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: Right now, I would say same, but it’s, you know, I’d say it depends, right? I mean, I think that obviously with what’s going on in terms of the tariffs in the industry, I think we’re at the early innings of seeing how that kind of flows through in terms of price adjustments within the marketplace. I would say so far, so good. I mean, I think we’ve seen some low single-digit inflation in the second quarter, and the customer seems pretty resilient. I think that it will accelerate as more of the costs find their way through the cost of goods. I mean, you think most retailers started off with inventory at pre-tariff prices, right? We also had probably about a quarter before the accelerated tariff started to hit.

I think as you get through the back half of the year, you’re going to see more of that find its way into COGS. I think you’re going to see prices go up, and it will be interesting to see how the consumer deals with that. I like our positioning. I like our chances. I go back to the relative value thing that I said earlier. If we do our job right and we manage this correctly, I think we’ll continue to see trade down, and we should benefit from that.

Interviewer: Our second question is on pricing. To the extent that you’ve had to take any price on like-for-like product, have you seen any elasticity response?

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: Yeah, we got this question on our earnings call. I’d say it falls into like three different buckets. Obviously, there’s some items, and I use the poster chart for that. As you know, if you go into our stores, when you check out, there’s a queuing lane, right? There’s soda and candy and chips and whatever in there. We’ve seen no unit erosion in terms of when we take prices up. It makes sense, right? I mean, if you’re thirsty and a bottle of soda costs $0.20 more, you’ll pay that. We’ve seen other categories where we’ve maybe nudged the price up and it went from $8.99 to $9.99. There, maybe the unit erosion is almost equal to whatever the AUR offset is. We’ve had a couple of places where we’ve seen, particularly when we cross a magic price barrier.

An example I used was a grill that we’re promoting during the summer that was maybe $499 last year, and it went to $549. There, the unit fall-off obviously was greater than the AUR uplift. We quickly pivoted and said, okay, obviously the customer has a negative reaction to this. What we came up with was a strategy of maybe being more thoughtful on the timing of it. We said, okay, maybe if last year it lived at that $499 price for four consecutive weeks, maybe we can do it for four-day blocks around major holidays and then let it be up in those other time periods. This is a very iterative process and we’re learning as we go through this. I will say the customer is smart, right?

I think that what’s going to happen in the back half of the year is there, we did a ton of shop-alongs for back to school. I was shopping with this one mom, and she was very savvy about how she was utilizing discounts and rewards and things like that. She said, I’ve got $200 to spend for my child for this trip, and I’m going to spend $200, and I’m going to get the most from it. She did, man. She found a way to work every deal and every angle to get the best possible deal. I asked her at one point, and I said, what do you think about all this news around tariffs? She said, I think that’s something the business made up just to charge higher prices. I’m like, okay. I think that mindset is right. I think they’re going to have a fixed budget.

I think in the economy, you know, it feels like the government’s very focused on making sure non-discretionary things like gas and food stay relatively low. I think they’ll have the same spend, maybe from a dollar perspective, for discretionary. We could argue whether some of the categories we saw are discretionary or not. I think if your kid plays baseball, he’s going to play baseball. If you can help them stretch that dollar and maximize their spend, I think there’s a way through this.

Interviewer: Okay. With inventory, and again, we touched on this a little bit, your expectations for inventory growth into the second half?

Carl Ford, Executive Vice President and Chief Financial Officer, Academy Sports and Outdoors: Yeah, we’ve pulled forward a lot of inventory. On a per-store basis, at the end of the second quarter, our inventories have 8% in dollars, 4.5% in units.

Interviewer: Per store?

Carl Ford, Executive Vice President and Chief Financial Officer, Academy Sports and Outdoors: Yeah, per store, on a per-store basis. We’ve pulled that forward. We’ve adjusted our unitary buys in the back half for the units that we’ve already purchased. We think with elevated AURs, managing for units is the right way to go. You should see that taper off. I do encourage people to look at it on a per-store basis. Right now, we’ve grown store units 7% year over year. We’re guiding 20 to 25 stores for the full year. It’s not going to be flat on a relative basis. It’s going to be on a per-store basis.

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: When Carl’s talking about pull forward, obviously, we have really smart people who work for us. We had somebody say, the best way to mitigate a tariff is to not pay it. You’re like, okay, that’s really profound. What we found was there’s a lot of evergreen product out there, right? Bikes, grills, treadmills, things like that, that a lot of manufacturers had in domestic warehouses on this side of the water. We went out and grabbed as much of it as we could, knowing that would be something that would give us a pricing advantage going through the back half of the year. That’s the inventory we pull forward. As to Carl’s point, on a per-store basis, units were up like 6.5% at the end of Q1. We’re up 4.5% at the end of Q2.

I think you’re going to see that continue to clip down as we go throughout the year and sell down on that pull forward inventory.

Interviewer: Okay. With regards to margins outside of any kind of tariff costs, freight, wages, material into 2026, do you see that better, the same, or worse?

Carl Ford, Executive Vice President and Chief Financial Officer, Academy Sports and Outdoors: I think we have upside opportunity as it relates to supply chain. I think that’s something that we’ve baked into the long-term algorithm associated with our long-range plan. We’ve launched a new warehouse management system in one of our three distribution facilities. We had some bumps coming out of it. I think longer term, there’s opportunity in the transportation space. I’ll give you a couple of thoughts. Academy Sports and Outdoors, for the most part, still does like one distribution center door per truck per store. It goes from the distribution center to the store and it comes back. It doesn’t have a sort of a network drop-off in the Houston market or drop-off in the Charlotte market, partial loads. We needed a warehouse management system to help us plan those loads a little bit better. That’s an opportunity in the transportation space.

In the distribution center space, we don’t cross-dock a lot of our goods. We touch them manually, kind of pick-packing and shipping as if almost for a DTC. We do this for retail stores. I think the ability to stage goods in the appropriate place so it’s got the highest sell-through and the human pickable locations, things of that nature, these are big opportunities for our company. There’s something that was surprising to Steve and I when we got there. At the same time, it’s an opportunity for the future.

Interviewer: Our last question is just about the competitive landscape and consolidation. Do you think market share consolidation will speed up, slow down, or be about the same in 2026?

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: I think maybe consolidate a little bit. One of the kind of the hidden costs of tariffs is you pay them up front, right? Theoretically, you don’t realize them or get them back until you sell the product. I think where the companies who don’t have healthy balance sheets, there’s going to be some contraction there. I think that’s going to happen this year to a certain degree. We’ve already seen it happen in a couple of places.

Interviewer: Yeah. Thank you so much for joining us today.

Steve Lawrence, Chief Executive Officer, Academy Sports and Outdoors: Thank you for having me.

Interviewer: Appreciate the time.

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