Academy Sports Outdoors Q2 2026: Contradictions Emerge on Tariff Impacts, Gross Margin Forecasts, and Consumer Behavior

The above is the analysis of the conflicting points in this earnings call

Date of Call: None provided

Financials Results

• Revenue: $1.60B, up 3.3% YOY; comp sales +0.2%
• EPS: $1.85 diluted EPS; $1.94 adjusted EPS (YOY comparison not provided)
• Gross Margin: 36.0%, down 2 bps YOY (merchandise margin +40 bps offset by shrink and higher e-commerce shipping)

Guidance:

• FY25 comp sales guidance tightened to -3% to +1% (from -4% to +1%).
• FY gross margin expected at 34.0%–34.5% (vs 33.9% last year).
• SG&A to deleverage ~100 bps for the full year; deleverage to moderate through H2.
• Back-half comps expected to improve as they lap soft Sep–Oct 2024.
• Tariff impacts largely mitigated via sourcing shifts, vendor/factory sharing, inventory pull-forward, and pricing tools.
• E-commerce growth expected to continue; inventory per store to normalize through the year.

Business Commentary:

• Sales and Market Share Improvement:
• Academy Sports and Outdoors reported sales of $1,600,000,000 for Q2, representing a 3.3% increase from the previous year, with a 0.2% comp.

• The improvement was driven by strong performance across major categories like footwear and apparel, and increased market share gains across key businesses.

• E-commerce Growth and Strategy:

• The company experienced approximately 18% growth in its online business during Q2.

• Growth was attributed to streamlining site navigation, improved order fulfillment options, and an expanded endless aisle assortment, which increased online conversion and average order value.

• New Store Performance and Strategy:

• Academy successfully opened three new stores during Q2, with plans to open a total of 20 to 25 locations in 2025.

• New stores are strategic for growth, with recent vintage stores (2022 and 2023) showing improved comps from low to mid single digits in Q2.

• Tariff Mitigation and Pricing Strategy:

• Academy is managing tariff impacts by shifting to domestic inventory, adjusting unit buys, and optimizing pricing to maintain value and offset cost increases.

• The goal is to complete most pricing adjustments in the back half of the year, while continuing to offer the best value in the marketplace.

• Customer Demographic Trends:

• Academy saw strong double-digit growth in foot traffic from consumers in the top two income quintiles, while the middle income cohort remained flat.
• The shift in customer demographics supports the strategy of focusing on offering value and resonating with higher income consumers.

Sentiment Analysis:

• “Sales came in at $1.6B, up 3.3% from last year… a 0.2% comp.” “.com business… grew ~18%.” “We are tightening the low end of our comp sales guidance… range now -3% to +1%.” “Gross margin… essentially flat to last year at 36% with merchandise margin up 40 bps.” “Our initiatives are starting to bear fruit and are accelerating… confidence that our strategies are working.”

Q&A:

• Question from Christopher Horbs (JPMorgan Chase): Post back-to-school trends and whether the intra-quarter sales 'valleys' are easing.
  Response: Back-to-school comp was positive; slight pullback after due to less Labor Day clearance and later hunting season start; expect momentum to improve as they lap soft late Sep–Oct comps.

• Question from Christopher Horbs (JPMorgan Chase): How tariffs impacted ticket/AUR and whether price actions extend into 2026.
  Response: AURs rose low–mid single digits; more pricing will flow through in H2 with a goal to complete most adjustments this year, while maintaining value; consumer response will dictate pace.

• Question from Pedro (Morgan Stanley): What drives H2 operating leverage—gross margin or SG&A—and how can Academy offset tariffs when peers see pressure?
  Response: SG&A deleverage ~100 bps for the year with investments the main driver; FY gross margin seen 34%–34.5%; tariff impact mitigated via vendor/factory cost sharing, sourcing diversification, inventory pull-forward, and selective pricing supported by optimization tools and private-brand value.

• Question from Kelly (Citi): Color on 3Q vs 4Q comps and quarterly SG&A flow.
  Response: SG&A deleverage should taper from 1Q to year-end (~100 bps for FY); comps expected to inflect as they lap last year’s Sep–Oct trough, with holiday remaining episodic but solid.

• Question from Greg Melich (Evercore ISI): Q2 gross margin headwinds into H2 and COGS import exposure; AUR outlook.
  Response: Q2 GM down 2 bps (shrink -20 bps; e-comm shipping -10 bps); similar magnitude expected for year; private-brand tariff-exposed COGS ~6%–7%, national-brand sourcing is fluid; AURs likely accelerate to high single/double digits in H2.

• Question from Brian Nagel (Oppenheimer): Why shouldn’t momentum continue in H2?
  Response: Initiatives (e-com, new stores, tech, premium brands, loyalty) are driving share gains; main risk is consumer health, but strategy momentum supports continued improvement.

• Question from Brian Nagel (Oppenheimer): Any demand impact from higher prices due to tariffs?
  Response: Elasticity varies: front-end largely inelastic; some categories hold units with higher AUR; certain big-ticket items saw unit softness, prompting targeted price adjustments.

• Question from Eric Cohen (Gordon Haskett): State of promotions and whether merchandise mix aided margins.
  Response: Promotions slightly more intense YOY but below pre-COVID; customers consolidating purchases into promo windows; mix benefit from apparel/footwear expected longer term, limited impact in Q2.

• Question from Kate McShane (Goldman Sachs): Detail on Nike/Jordan performance and product exclusivity.
  Response: Nike and Jordan are up double digits; not exclusive but gaining broader access to premium SKUs and distributing them across more doors, boosting back-to-school and expected holiday demand.

• Question from Anthony Chukumba (Loop Capital Markets): Size and planned expansion of the Jordan assortment.
  Response: Jordan footwear SKUs have more than tripled; added football cleats and backpacks; apparel and door count expand through H2 with more doors planned next spring.

• Question from Jonathan Matuszewski (Jefferies): Shopping patterns by ethnicity/Hispanic consumer and RFID in-stock impact.
  Response: Higher-income traffic is growing; Hispanic consumer up YOY per Placer but border stores underperform; RFID lifts inventory accuracy ~20% and in-stocks by 400–500 bps, aiding conversion.

• Question from John Heinbockel (Guggenheim Securities): Size of income cohorts and marketing to >$100k households; supply chain savings cadence.
  Response: Income cohorts are roughly one-third each; targeted CRM aims to convert high-value and single-channel shoppers to omnichannel; 100 bps supply-chain opportunity intact over five years via WMS rollout and operational improvements.

• Question from Maddie Cech (Bank of America): H2 inventory growth and category performance (incl. ammo).
  Response: Units/store up 4.6% in Q2 but normalizing through year; apparel and footwear comps +~3.7–3.8%, outdoor +2.5%; ammo remains pressured amid oversupply, with focus on price leadership and bulk packs.

• Question from Justin Kleber (Baird): Has Nike/Jordan opened doors to more brands; drivers of H2 gross margin expansion?
  Response: Jordan’s strong launch helps secure more premium brands (e.g., Converse, Hydro Jug, Burlevo); H2 GM expansion relies on merchandise margin/mix, with modest shrink and e-comm shipping headwinds.

• Question from John Kernan (TD Cowen): New store productivity and comp planning amid rising AURs.
  Response: Year-1 sales $12M–$16M per store, EBITDA positive, ~20% ROIC, mid-single-digit comps after entering the base; comp plan assumes lower-income pressure but offset by mid/high-income trade-in and maintained relative value as AURs rise.