Academy Sports and Outdoors (NASDAQ:ASO) reported a return to comparable sales growth in its fiscal first quarter, with management pointing to gains across all major merchandise divisions, strong e-commerce growth and momentum from newer stores.
The sporting goods retailer said first-quarter net sales rose 6.7% to $1.44 billion, while comparable sales increased 2.9%. Chief Executive Officer Steve Lawrence said the results were at the high end of the range the company communicated ahead of its Analyst Day in April.
Outdoor, sports and apparel categories drive gains
Academy said all four of its divisions posted increases in the quarter. Outdoor was the best-performing category, rising 12%, led by fishing and shooting sports. Lawrence said ammunition, which had been a headwind for much of the prior year, turned positive in February and accelerated after conflict began in the Middle East. Firearms also remained a bright spot, with the company citing eight consecutive quarters of market share gains based on NICS check data as a proxy.
To build on that momentum, Lawrence said Academy launched suppressors in a limited number of stores during the quarter and plans to roll the category out to more than 100 stores by year-end. He said the category is new to Academy’s assortment and should be accretive, with high average unit retails and strong attachment rates to firearms and related accessories.
Sports and recreation sales rose 6%, helped by baseball and team sports. Lawrence also called out double-digit growth in the company’s front-end business, driven by collectible trading cards, as well as ongoing strength in outdoor speakers through Turtlebox.
Apparel increased 5%, supported by outdoor and work assortments from Carhartt, BURLEBO, Levi’s and Academy’s Magellan Outdoors brand. The company plans to add roughly 100 Ariat shops in the back half of the year. Footwear sales rose 3%, helped by cleats, Crocs, Birkenstock and performance running platforms from Nike, Adidas, New Balance and Brooks.
Margins pressured by tariffs, but earnings rise
Chief Financial Officer Carl Ford said gross margin was 33.2%, down 71 basis points from the prior year. He attributed the decline primarily to tariffs, which created a 110-basis-point headwind, partially offset by 20 basis points of shrink favorability and 10 basis points from shipping and transportation-related improvements.
Ford said the first quarter is expected to represent the largest tariff impact of the year, with pressure moderating as 2026 progresses. The company maintained its full-year gross margin rate guidance of 34.5% to 35.0%.
Selling, general and administrative expenses improved to 28.1% of sales, down 77 basis points, helped by the positive comp and by lapping $7.5 million in prior-year costs tied to Nike expansion and the Jordan brand rollout. Operating income was $74.7 million. Diluted earnings per share rose 17.6% to $0.80, while adjusted earnings per share, excluding stock compensation, rose 22.4% to $0.93.
Academy ended the quarter with $338 million in cash and an untapped $1 billion revolver. Free cash flow increased 14.2% to $121.6 million. During the quarter, the company repurchased about 1.7 million shares, paid $9.6 million in dividends and continued funding investments in stores, omnichannel capabilities and technology.
Guidance raised after solid start
Academy raised its annual sales outlook to a range of $6.23 billion to $6.35 billion, representing growth of 3% to 5%. Comparable sales are now expected to be flat to up 2% for fiscal 2026.
The company also raised the midpoint of its net income guidance and now expects net income of $390 million to $415 million. It projected diluted earnings per share of $5.95 to $6.35 and adjusted earnings per share of $6.40 to $6.80. Ford said the EPS guidance does not include any impact from future share repurchases.
At the midpoint of the outlook, Ford said Academy expects a roughly 1% comparable sales gain, approximately flat gross margin and modest SG&A leverage, resulting in EPS growth of more than 10% compared with fiscal 2025.
New stores, loyalty and omnichannel remain key initiatives
Lawrence said new store expansion remains Academy’s top growth lever. The company opened two stores in the first quarter, in Canton, Ohio, and Muskogee, Oklahoma, and plans three more openings in the second quarter in Altoona, Pennsylvania, North Knoxville, Tennessee, and Morristown, Tennessee. Another 15 to 20 stores are expected to open in the back half of the year.
The company also highlighted the relaunch of its My Academy Rewards program, which is being integrated into its loyalty ecosystem with a three-tier structure. The base tier does not require a credit card and includes welcome and birthday offers, a reward at a $500 spend threshold and free shipping on online orders over $25. The middle tier is tied to Academy’s private-label credit card and offers 5% off purchases at Academy, while the top tier uses a co-branded Mastercard offering rewards on outside spend that can be redeemed at Academy.
Lawrence said enrollment in My Academy Rewards is up double digits year over year, with a goal of adding 2 million members this year and growing total loyalty membership to more than 15 million.
On the omnichannel side, Academy plans to expand same-day delivery partnerships to include Uber Eats and Instacart alongside DoorDash. The company also plans to migrate its site search to Google’s AI Commerce Search and Gemini Enterprise customer experience around the back-to-school period.
Management remains cautious on consumer pressure
Despite the stronger quarter, executives repeatedly cited pressure on discretionary spending from high gas prices and inflation. Lawrence said second-quarter sales through Memorial Day were up low single digits in total, with comparable sales roughly flat, and said the company had seen “a little bit of a slowdown” from the consumer.
Ford described the consumer environment as bifurcated. He said higher-income consumers are increasingly shopping at Academy in search of value, with trips from consumers earning more than $100,000 up mid-single digits in the quarter. Lower-income consumers, by contrast, remain under pressure.
Management said upcoming opportunities include the World Cup, America’s 250th birthday, the loyalty and credit card relaunch, and continued growth in e-commerce. Lawrence said World Cup sales should be “mainly incremental,” with product available across the chain and front-of-store presentations in markets hosting matches.
“While inflationary pressures persist, we’re confident in our ability to execute through a range of environments,” Lawrence said in closing remarks, adding that the company intends to continue offering customers “compelling assortments at a strong value.”
About Academy Sports and Outdoors (NASDAQ:ASO)
Academy Sports and Outdoors is a leading specialty retailer of sporting goods and outdoor gear, operating more than 260 stores across the United States. Headquartered in Katy, Texas, the company offers a broad assortment of merchandise spanning athletic footwear and apparel, team sports equipment, camping and outdoor recreation products, hunting and fishing supplies, and fitness accessories. In addition to its brick-and-mortar footprint, Academy serves customers through its e-commerce platform, offering online ordering, in-store pickup, and home delivery options.
The company’s product portfolio includes seasonal and year-round categories designed to meet the needs of both casual enthusiasts and serious athletes.
