Academy Sports + Outdoors Reports Q4 and Fiscal 2025 Results; Announces Growth Plans and 2026 Guidance

Key Highlights of the Report

• Q4 Sales up 2.5%; Full-Year Sales up 2.0%: Net sales for Q4 reached \$1.72 billion, while full-year sales hit \$6.05 billion, both showing moderate growth despite macroeconomic pressures.
• Comparable Sales Down, But Signs of Recovery: Comparable sales fell 1.6% in Q4 and 1.5% for the year, but management points to foundational strategies driving a return to topline growth.
• EPS Growth and Dividend Increase: Q4 diluted GAAP EPS increased by 4.8% to \$1.98. The quarterly dividend was raised by 15%, marking the fourth consecutive year of dividend growth.
• Aggressive Store Expansion: 24 new stores were opened in 2025, with plans for an additional 20-25 new stores in 2026, expanding the footprint to 322 locations and 21.9 million gross sq. ft.
• 2026 Guidance Issued: The company expects annual sales growth of 2-5%, adjusted EPS growth of up to 9.9%, and adjusted net income of \$410-\$445 million for FY2026.
• Strong Balance Sheet and Cash Flow: Cash and cash equivalents rose to \$330 million, with merchandise inventories up 14.9% year-over-year. Adjusted free cash flow for 2025 was \$263 million.
• Share Repurchases Continue: \$200.8 million of shares were repurchased in 2025, with \$437 million remaining under the current repurchase authorization.

Full Analysis and Details for Investors

Management Commentary & Strategic Initiatives

CEO Steve Lawrence described 2025 as an “inflection point” for Academy, highlighting market share gains, a return to topline growth, and foundational investments in digital transformation and omni-channel initiatives. Management is optimistic that these strategies, combined with data-driven personalization, should enable a return to consistent comparable sales growth even as macro pressures persist into 2026.

Financial Performance Breakdown

• Q4 2025:
  • Net sales: \$1.72B (+2.5% YoY)
  • Comparable sales: -1.6%
  • Net income: \$133.7M (flat YoY)
  • Adjusted net income: \$132.9M (-4.3%)
  • GAAP diluted EPS: \$1.98 (+4.8%)
  • Adjusted diluted EPS: \$1.97 (+0.5%)
• Full Year 2025:
  • Net sales: \$6.05B (+2.0%)
  • Comparable sales: -1.5%
  • Net income: \$376.8M (-9.9%)
  • Adjusted net income: \$393.2M (-10.5%)
  • GAAP diluted EPS: \$5.54 (-3.3%)
  • Adjusted diluted EPS: \$5.78 (-4.0%)

Balance Sheet and Capital Allocation

• Cash and equivalents: \$330.3M (+14.3% YoY)
• Merchandise inventories: \$1.50B (+14.9%)
• Long-term debt: \$480.8M (essentially flat)
• Share repurchases: \$200.8M in 2025 (down from \$368.3M in 2024)
• Dividends paid: \$34.7M (+10.2%)
• Inventory per store up 6.3% in dollars, flat in units

Store Footprint and Expansion Plans

• Opened 24 new stores in 2025, bringing the total to 322 stores
• Plans to open 20-25 additional stores in 2026
• Total gross sq. ft. at end of 2025: 21.9 million (+1.3 million YoY)

2026 Financial Guidance

• Net sales: \$6.175B – \$6.355B (2.0% – 5.0% growth)
• Comparable sales: -1.0% to +2.0% (vs. -1.5% in 2025)
• Gross margin: 34.5% – 35.0% (2025 actual: 34.8%)
• GAAP net income: \$380M – \$415M (up to +10% growth)
• Adjusted net income: \$410M – \$445M
• GAAP diluted EPS: \$5.65 – \$6.15
• Adjusted diluted EPS: \$6.10 – \$6.60 (up to +9.9%)
• Capital expenditures: \$200M – \$240M
• Adjusted free cash flow: \$250M – \$300M
• Guidance does not include potential upside from future share repurchases; \$437M remains authorized
• Assumed tax rate: 22% – 23%

Dividend and Shareholder Returns

The company declared a quarterly cash dividend of \$0.15 per share, a 15% increase over the prior quarter. This marks the fourth consecutive year of dividend growth, underlining management’s confidence in future cash flows and commitment to returning capital to shareholders.

Factors That May Impact Share Price

• Positive Catalysts:
  • Acceleration in store openings and omni-channel initiatives
  • Increased dividend and continued share repurchase program
  • Solid 2026 guidance with potential for high-single digit earnings growth
  • Potential boost from external events: increased tax refunds, international sporting events, and America’s 250th anniversary
• Risks and Uncertainties:
  • Consumer financial pressure and ongoing macroeconomic headwinds, including inflation and higher interest rates
  • Competitive retail landscape and execution risk related to new store openings and digital transformation
  • Guidance does not factor in potential future share repurchases, which could provide upside

Conclusion

Academy Sports + Outdoors delivered modest growth in 2025 despite a challenging retail environment, increased its dividend, and outlined ambitious expansion and omni-channel strategies for 2026. With a strong balance sheet, continued share repurchases, and solid 2026 earnings guidance, the company remains well-positioned for investors seeking growth and income. However, macroeconomic headwinds and competitive pressures remain key risks to monitor.

Conference Call Details

Academy will host a conference call to discuss these results today at 10:00 a.m. Eastern Time. Investors can join via webcast at investors.academy.com or by dialing 1-877-407-3982 (U.S.) or 1-201-493-6780 (International), Passcode: 13758909.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Forward-looking statements are based on management’s current expectations and are subject to various risks and uncertainties that could cause actual results to differ materially from projections. Investors should review the company’s filings with the SEC and consult their own financial advisors before making investment decisions.

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