Academy 2026 Q1 Earnings Misses Targets as Net Income Plummets 39.7%

Academy (ASO) reported its fiscal 2026 Q1 earnings on Jun 10th, 2025. Academy Sports and Outdoors faced challenges in the first quarter of fiscal 2026, missing market expectations with a revenue decline of 0.9% to $1.35 billion, compared to $1.36 billion in the previous year’s Q1. The company's outlook for the fiscal year remains optimistic, with a projected revenue of approximately $5.5 billion and EPS targeted around $2.60. Despite a decline in net income, Academy continues to invest in expansion initiatives and operational improvements, including a $150 million capital expenditure plan.

Revenue

Academy's revenue for fiscal 2026 Q1 showed a slight decline, reaching $1.35 billion compared to $1.36 billion in the same period last year. The merchandise division contributed significantly with $1.34 billion, while the outdoors segment generated $372.03 million. Sports and recreation sales amounted to $345.59 million, followed by apparel at $332.64 million. Footwear accounted for $292.69 million, and other sales totaled $8.46 million.

Earnings/Net Income

Academy's EPS fell sharply by 33.0% to $0.69 in 2026 Q1 from $1.03 in 2025 Q1, while net income dropped 39.7% to $46.08 million from $76.47 million in the previous year’s Q1. The decrease in EPS reflects a challenging performance.

Price Action

The stock price of Academy has dropped 4.33% during the latest trading day, has climbed 4.30% during the most recent full trading week, and has jumped 10.78% month-to-date.

Post-Earnings Price Action Review

The investment strategy of acquiring Academy (ASO) shares after a quarterly revenue drop and holding them for 30 days yielded a 17.88% return, considerably underperforming the benchmark's 58.19% return. This approach resulted in a compound annual growth rate (CAGR) of 5.71%, with a significant maximum drawdown of -49.15%. The strategy's Sharpe ratio stood at 0.13, indicating a higher risk profile compared to the benchmark with lower returns. Investors faced notable volatility, reflecting the strategy's inability to align with market expectations efficiently.

CEO Commentary

Ken Hicks, CEO of Academy Sports and Outdoors, expressed strong optimism regarding the company's performance, highlighting a solid revenue of $1.35 billion and an EPS of $0.69 for the quarter. He noted that growth was driven by strategic investments in both digital and physical storefronts, which enhanced customer engagement and operational efficiency. Hicks acknowledged challenges such as supply chain disruptions but emphasized that the company's agile response allowed it to maintain market positioning. He reaffirmed a commitment to expanding product offerings and enhancing the customer experience, underscoring a positive outlook for the upcoming quarters.

Guidance

Academy Sports and Outdoors anticipates continued momentum with expectations of revenue growth for the fiscal year, guided by projected revenue of approximately $5.5 billion. The company expects EPS to remain strong, targeting around $2.60 for the full year. Additionally, management plans to invest around $150 million in capital expenditures to support expansion initiatives and improve operational capabilities, maintaining a focus on innovation and market competitiveness.

Additional News

Academy Sports and Outdoors continues its expansion strategy with the opening of new locations. Recently, the company launched two stores in Fort Walton Beach, Florida, and Midlothian, Virginia, with another planned for Morgantown, West Virginia. This growth follows Academy surpassing 300 stores, marking significant entries into Pennsylvania and Maryland for the first time. The addition of these outlets is expected to create approximately 200 jobs in their respective communities. Furthermore, Academy announced a quarterly cash dividend of $0.26 per share with a record date of June 19, 2025. The company remains committed to its plan of opening 20 to 25 new stores throughout fiscal 2025, expanding its footprint across 21 states.