Academy Sports 4Q25 Immediate Call Postmortem
January softer than anticipated due to winter stores with half store base shut down for 2-3 days. Business rebounded after they reopened. Raised AUR by 10% through promo optimization, higher sales towards better end of assortment, and strategic price increases. Every quarter is an excuse - WTF is it going to take this company to have positive comps because 10% AUR growth couldn’t even do it? Not to mention all the other “initiatives” that should be helping comps right now. Gutman was all over this in Q&A (I rag on him a lot but very appreciative of his questions today).
Optimistic about the tailwind from further Nike/Jordan expansion (won’t be as big as last year) and “launch of reward program” (roll eyes). Strange they only mentioned the tailwind of the World Cup after that, almost like it’s less important. They doubled down on how big a deal the loyalty program will be in Q&A: “can’t underestimate the impact”. Later in Q&A they said loyalty was equivalent to the 30 basis points from the World Cup this year. Lasser’s question shows me he very much is seeing some of the derivative problems here down the line. Kinda like the derivative issues they have this year from comparison against initiatives last year…
MSD comp increase (for the year) in stores opened 2022-2024. The last data point we heard from the company was an HSD increase in 3Q25 – wonder why they wouldn’t give us 4Q25?
Still early in the tax return cycle and expect consumers to see higher income tax refunds this year. Running a positive comp in the first seven weeks of the quarter and attribute some of that to tax refunds. Am I crazy or did the investment community just completely stop caring about this subject when it was the primary bull thesis for the entire market towards the end of last year?
Adding an additional 55 Jordan doors this Spring to the 145 opened last Spring. Will continue to expand the offering from Nike of higher-level fashion in both footwear and apparel (not sure what higher-level fashion means here). OMG – they only just now are talking about Western Wear (Carhartt, Wrangler, Ariat, Brunt, etc). Is this the top in Boot Barn? There used to be an old saying: “By the time a trend gets to Kohl’s, it’s over.”
In Q&A Horvers mentioned that historically wars create a “run on ammo” – reaffirmed by management later in Q&A. Today I learned that’s a thing.
High single digit decline in traffic for lower income demographics. Dick’s Sporting Goods doesn’t seem to have that problem, but probably don’t play much at such a low level
Not a major deal but really wish a sell-sider would ask about the ~$37 million sale of equipment this quarter as that’s kind of a lot (equivalent of 10 stores on a sale-leaseback like in 3Q25 and by far most in history). Alas it’s probably just too much to hope that at least one of the 20+ analysts that cover the name noticed it.
*These are our unabridged quick thoughts and notes from the call. We get them out as soon as possible after the call ends. Management has given some topics to dig deeper into and will circle back afterwards with much more in depth work on what was mentioned. You can find that work (and more on Academy Sports and other retail/consumer research) at our website here: M Squared Capital
Originally posted on X and Substack.