Academy 2026 Q3 Earnings EPS Surges 13.8% as Revenue Grows 3%

Academy Sports & Outdoors (ASO) reported Q3 2026 results that beat EPS expectations by 6.54% while revenue slightly missed estimates. The company raised gross margin guidance to 34.3%-34.5% and narrowed full-year comp guidance to -2% to flat, reflecting improved operational performance and strategic store expansion.

Revenue

Academy’s total revenue rose 3.0% year-over-year to $1.38 billion, driven by growth across all merchandise divisions. The Outdoors segment led with $445.14 million, while Sports and Recreation sales climbed 5.6% to $288.74 million. Apparel and Footwear each grew by 2.8% and 2.4%, respectively, contributing $349.81 million and $292.44 million. Other sales, including non-core categories, added $7.56 million.

Earnings/Net Income

Earnings per share (EPS) surged 13.8% to $1.07, outperforming the prior year’s $0.94. Net income increased 8.8% to $71.56 million, underscoring the company’s improved profitability. The EPS growth highlights effective cost management and operational efficiency, marking a positive trend for shareholders.

Post-Earnings Price Action Review

The strategy of buying Academy shares after a revenue increase quarter-over-quarter on the financial report date and holding for 30 days resulted in a -10.87% return, significantly underperforming the benchmark’s 67.70%. Over three years, the strategy’s CAGR of -3.80% indicates a value decline, while a maximum drawdown of 0.00% and a Sharpe ratio of -0.09 suggest it failed to capture positive returns despite no loss risk. This poor performance, based on backtested data, questions the viability of such a strategy.

CEO Commentary

CEO Steve Lawrence acknowledged a 0.9% comp decline due to mid-quarter softness but highlighted strong holiday momentum. New store openings (26 in the comp base) and omnichannel growth (22% year-over-year) offset challenges in ammunition sales. Strategic priorities include expanding stores in legacy markets, enhancing in-store tech, and leveraging partnerships with brands like Nike to attract higher-income customers.

Guidance

Academy narrowed full-year 2025 comp guidance to -2% to flat from -3% to +1%, raised gross margin expectations to 34.3%-34.5%, and maintained adjusted EPS growth forecasts. New store targets (20-25 in 2026) and a 15% e-commerce penetration goal underscore its focus on long-term resilience.

Additional News

Academy announced plans to open 20-25 new stores in 2026, prioritizing legacy markets for faster payback and lower marketing costs. The company also emphasized expanding its loyalty program to 13 million members by year-end, integrating credit offerings to boost repeat business. Additionally, management highlighted inventory optimization efforts to resume share repurchases in Q4, signaling confidence in future cash flow.

Financial Highlights

• Revenue: $1.38 billion (+3.0% YoY)

• EPS: $1.07 (+13.8% YoY)

• Net Income: $71.56 million (+8.8% YoY)

• Gross Margin: 35.7% (up 170 bps)

• Store Count: 317 locations (up from 293 YoY)

• E-commerce Growth: 22% YoY, 10.4% of sales

Strategic Priorities

1. Store Expansion: 20-25 new stores in 2026, 80% in legacy markets.

2. Omnichannel Growth: Targeting 15% e-commerce penetration.

3. Inventory Management: RFID and handheld tech to enhance efficiency.

4. Customer Focus: 40% of sales from households earning $100K+, driven by Nike/Jordan partnerships.