Academy 2026 Q2 Earnings Misses Targets as Net Income Drops 12%

Academy (ASO) reported its fiscal 2026 Q2 earnings on September 2, 2025. While the company saw modest revenue growth, earnings and net income both declined, missing earlier expectations. The firm also revised its full-year comp sales guidance upward to -3% to +1% from a prior -4% range.

Despite a 3.3% year-over-year increase in total revenue to $1.60 billion, earnings per share and net income both fell short of the same period in 2025. The results reflect ongoing challenges in certain categories and macroeconomic headwinds, though the company signaled optimism for the remainder of the year.

Revenue
Academy’s total revenue for the second quarter of fiscal 2026 rose to $1.60 billion, up from $1.55 billion in the prior year. Total merchandise sales accounted for the majority of this total at $1.59 billion, with key categories contributing as follows: Outdoors generated $448.94 million, Sports and recreation brought in $369.79 million, Apparel sales reached $451.12 million, and Footwear totaled $323.24 million. Smaller but notable segments such as Other sales added $6.75 million to the overall revenue.

Earnings/Net Income
Academy’s earnings per share declined by 5.0% to $1.89 in fiscal 2026 Q2, compared to $1.99 in the same period the previous year. The company’s net income also fell by 12.0%, reaching $125.43 million, down from $142.59 million in Q2 2025. This indicates a challenging earnings performance relative to prior-year levels.

Price Action
The stock of Academy has seen a decline in recent trading periods. On the latest trading day, shares dropped by 3.88%. Over the past full trading week, the decline was more pronounced, with an 8.08% drop. Month-to-date, the stock has fallen 2.54%, reflecting investor concern following the earnings report.

Post Earnings Price Action Review
Following the earnings announcement, Academy’s shares have seen a continued downward trend, with investors reacting to mixed performance indicators. While revenue growth was positive, the decline in earnings and net income has dampened sentiment. The stock’s decline over the past week highlights market skepticism, especially in light of the broader economic challenges and the company's own challenges in certain product categories.

CEO Commentary
Steve Lawrence, Academy’s Chief Executive Officer, highlighted a 0.2% comp sales increase and $1.6 billion in total revenue for the quarter, noting progress despite challenges. Key growth areas included e-commerce, which saw 18% growth, and the opening of three new stores, with 20–25 additional locations planned for the year. The CEO acknowledged softer demand in seasonal categories early in the quarter and a slower start among lower-income consumers but expressed optimism about improved traffic among high-income shoppers and ongoing tariff mitigation strategies. He emphasized the company’s strategic focus on enhancing online functionality, store productivity through RFID and handheld devices, and targeted marketing via My Academy.

Guidance
Academy updated its full-year comp sales guidance for fiscal 2026 to a range of -3% to +1%, up from the previously issued range of -4%. The company is forecasting gross margin rates between 34%–34.5% and expects SG&A deleverage of approximately 100 basis points for the year. Free cash flow for Q2 was reported at $21.7 million, with $530 million remaining in buyback authorization. The company remains optimistic about continued e-commerce acceleration, new store contributions, and inventory normalization as tailwinds for future performance.

Additional News
On September 1, 2025, a Nigerian court sentenced an Indian man to death for setting his wife ablaze due to her dark skin color, sparking widespread attention and condemnation. Separately, Shell announced its decision to abandon a major biofuel project in the Netherlands, raising questions about the future of renewable energy initiatives in the region. In business news, the Federal Government of Nigeria announced the withdrawal of subsidies on compressed natural gas, leading to a price increase to N450 per standard cubic meter. These developments reflect broader economic and social trends impacting both international and domestic markets.