• Net Sales: $1.68 billion for Q4, a 6.6% decline year-over-year.
• Comparable Sales: Decreased by 3% in Q4.
• Net Income: $133.6 million for Q4.
• Diluted Earnings Per Share: $1.89 for Q4.
• Adjusted Net Income: $139 million for Q4.
• Adjusted Diluted Earnings Per Share: $1.96 for Q4.
• Gross Margin: 32.2% for Q4, down 110 basis points year-over-year.
• SG&A Expenses: Increased by $10 million in Q4, excluding the extra week last year.
• Cash Position: $289 million at the end of Q4.
• Inventory: $1.3 billion, a 9.6% increase year-over-year.
• Free Cash Flow: $342 million for fiscal 2024.
• New Store Openings: 16 new stores in fiscal 2024, with plans for 20-25 new stores in 2025.
• Dividend Increase: 18% increase, resulting in $0.13 per share.
• 2025 Guidance: Net sales expected to range from $6.1 billion to $6.3 billion.
• 2025 Gross Margin Rate: Expected to range from 34.0% to 34.5%.
• 2025 GAAP Net Income: Expected between $375 million and $410 million.
• 2025 Adjusted Net Income: Expected between $400 million and $435 million.
• 2025 GAAP Diluted EPS: Expected between $5.40 and $5.85.
• 2025 Adjusted Diluted EPS: Expected between $5.75 and $6.20.

• Warning! GuruFocus has detected 8 Warning Signs with INRLF.

Release Date: March 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Academy Sports and Outdoors Inc (NASDAQ:ASO) exceeded its midpoint guidance for both net sales and adjusted earnings per share in the fourth quarter.
• The company saw strong performance in its outdoor category, with net sales growth of 2% driven by hunting, fishing, and camping.
• Academy Sports and Outdoors Inc (NASDAQ:ASO) successfully opened 16 new stores in 2024, expanding its presence to 19 states.
• The company launched the myAcademy Rewards program, enrolling over 11 million customers, which showed strong engagement over the holiday season.
• Academy Sports and Outdoors Inc (NASDAQ:ASO) plans to open 20 to 25 new stores in 2025, expanding its footprint to 21 states and reaching over 300 stores.

Negative Points

• Net sales for the fourth quarter were $1.68 billion, representing a 6.6% decline compared to the previous year.
• Comparable sales decreased by 3% in the fourth quarter, with a decline in comp transactions by 5.9%.
• Gross margin rate declined by 110 basis points in the fourth quarter due to higher freight and distribution costs.
• The company faced challenges with its Georgia distribution facility, impacting supply chain productivity.
• Academy Sports and Outdoors Inc (NASDAQ:ASO) anticipates a challenging first quarter in 2025, with expectations of negative comp sales and earnings per share.

Q & A Highlights

Q: What are the expected drivers of gross margin expansion in 2025 despite the tariff impact? A: Carl Ford, CFO, explained that the margin expansion is expected from recapturing supply chain headwinds experienced in 2024, particularly around the Georgia distribution facility. Additionally, a higher penetration of soft lines, supported by brands like Jordan and Nike, and improved promotion effectiveness using pricing tools are anticipated to contribute to the margin expansion.

Q: How is the consumer behavior affecting sales, and what is the outlook for the first quarter? A: Steve Lawrence, CEO, noted that while there was a softening in business at the end of January, the trend improved as the weather warmed up. The company expects Q1 to be the most challenging, with Q2 anticipated to be the strongest due to initiatives like the Jordan launch and new store openings. The guidance considers a continued softness in middle to lower-income consumers.

Q: Can you provide more details on the Jordan brand launch and its impact on the relationship with Nike? A: Steve Lawrence, CEO, stated that the Jordan brand will be introduced in 145 stores and online, focusing on sport products. This launch, along with an expanded Nike footprint, signifies a strengthened partnership with Nike. The Jordan brand is expected to be a top 20 brand in 2025 and potentially a top 10 brand in 2026.

Q: How is Academy Sports and Outdoors managing tariff impacts, and what is the exposure to China? A: Steve Lawrence, CEO, mentioned that the company has been diversifying its sourcing base, reducing direct import exposure to China from 10% to under 9%. The company is working with vendors to absorb costs and using pricing optimization to mitigate tariff impacts, ensuring they remain a value leader.

Q: What changes are being observed in the customer demographic, particularly among higher-income cohorts? A: Carl Ford, CFO, noted an acceleration in transactions from households earning over $100,000, seeking value in sports and outdoor products. This trend began in Q3 2024 and continued into Q4, with higher baskets observed among these customers, indicating a shift towards value-conscious shopping.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.