Academy Sports + Outdoors Reports Record eCommerce Growth, Expands Store Footprint Amid Solid Profit Gains
eCommerce and New Stores Drive Top-Line Momentum
Academy Sports + Outdoors (NASDAQ: ASO) posted third-quarter results showing a 3% rise in total sales to $1.38 billion, supported by eCommerce sales surging 22.2% year over year. Despite flat overall comparable sales (-0.9%), new stores posted high single-digit comp gains. The company opened eleven new stores across ten states during the quarter and plans for continued expansion, now operating 317 locations across 21 states. This commitment to store growth and a modern retail footprint signals a push for market share and deeper local reach.
Gross Margin Expansion Highlights Profit Strength
ASO achieved a robust gross margin of 35.7% in the quarter, up from 34.0% the previous year—a substantial 170-basis point improvement. Diluted GAAP EPS rose 14% to $1.05, with adjusted earnings per share up 16.3% to $1.14. Net income climbed 8.8% to $71.6 million, outpacing sales growth and demonstrating effective margin management.
| Metric | Q3 2025 | Q3 2024 | % Change |
|---|---|---|---|
| Net Sales ($M) | 1,383.7 | 1,343.3 | 3.0% |
| eCommerce Sales Growth | 22.2% | ||
| Gross Margin (%) | 35.7 | 34.0 | +1.7 pts |
| Net Income ($M) | 71.6 | 65.8 | 8.8% |
| Diluted EPS ($) | 1.05 | 0.92 | 14.1% |
| Adjusted EPS ($) | 1.14 | 0.98 | 16.3% |
Full-Year Guidance Narrows, Gross Margin Outlook Raised
The company revised its full-year guidance, tightening the sales range and lifting the low end of gross margin targets. Academy now expects fiscal 2025 net sales between $6.025 billion and $6.2 billion (vs. $6.0–$6.265B prior), comparable sales to decline by as little as 2% (prior low end was -3%), and a gross margin rate between 34.3% and 34.5% (up from a prior low end of 34.0%). EPS guidance was also refined to a $5.35–$5.85 range, with adjusted EPS forecasted at $5.65–$6.15. These moves highlight management’s confidence in profit delivery and margin sustainability, even in a cautious macroeconomic environment.
| Guidance Metric | Previous Low | Previous High | Updated Low | Updated High |
|---|---|---|---|---|
| Net Sales ($B) | 6.00 | 6.27 | 6.03 | 6.20 |
| Comparable Sales (%) | -3.0 | +1.0 | -2.0 | 0.0 |
| Gross Margin (%) | 34.0 | 34.5 | 34.3 | 34.5 |
| Diluted EPS ($) | 5.30 | 6.00 | 5.35 | 5.85 |
| Adjusted EPS ($) | 5.60 | 6.30 | 5.65 | 6.15 |
Capital Allocation Reflects Focus on Sustainable Returns
While year-to-date share repurchases dropped to $99.9 million from $276.6 million, dividend payments increased 9.2% year over year to $26 million. Following quarter end, Academy’s Board declared a quarterly dividend of $0.13 per share, payable January 15, 2026. Inventory levels grew by 11.6% in dollar terms, but only 0.3% on a per-store unit basis—suggesting strategic stocking ahead of anticipated growth, rather than excess inventory risk.
Expansion Remains a Key Pillar
The third quarter saw eleven new store openings, with 24 stores added over the last twelve months. Academy projects another 20–25 new stores in fiscal 2026, continuing its steady march into new geographies and further growing its physical footprint alongside booming digital sales.
| Quarter | Stores Opened | Total Stores (End of Period) |
|---|---|---|
| FY 2024 | 16 | 298 |
| Q1 2025 | 5 | 303 |
| Q2 2025 | 3 | 306 |
| Q3 2025 | 11 | 317 |
Investor Takeaway: Resilience in a Competitive Retail Market
Academy’s ability to boost margins, sustain profit growth, and drive aggressive store expansion—while eCommerce gains accelerate—signals resilience even amid mixed consumer demand. A record Black Friday event, early holiday strength, and a steady dividend policy point to a retailer leaning into value leadership and omni-channel strategies. With tightened guidance and disciplined capital allocation, Academy stands out as a retailer balancing growth ambitions with operational prudence.
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