Academy Sports Posts Q3 Net Income Jump, Sales Up 3%

TL;DR

**ASO's Q3 net income jump and continued share buybacks make it a solid play, despite a slight dip in year-to-date earnings.**

AI Summary

Academy Sports & Outdoors, Inc. (ASO) reported a net income of $71.56 million for the thirteen weeks ended November 1, 2025, an increase of 8.8% from $65.76 million in the prior year period. Net sales grew by 3.0% to $1.38 billion from $1.34 billion year-over-year. Gross margin improved to $493.41 million, up from $456.71 million, while selling, general and administrative expenses increased to $393.02 million from $365.24 million. For the thirty-nine weeks ended November 1, 2025, net income decreased to $243.08 million from $284.82 million, despite net sales rising to $4.33 billion from $4.26 billion. The company repurchased 2,080,772 shares for $99.9 million during the thirty-nine weeks ended November 1, 2025, and has $536.5 million remaining under its 2024 Share Repurchase Program. Cash and cash equivalents remained stable at $289.49 million as of November 1, 2025, compared to $288.93 million at February 1, 2025. The company also noted the enactment of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, which is expected to materially decrease current tax expense and increase deferred tax expense for the fiscal year ending January 31, 2026, with no net impact on the effective tax rate.

Why It Matters

Academy Sports' Q3 performance, with an 8.8% net income increase and 3.0% sales growth, signals resilience in a competitive retail landscape, particularly against rivals like Dick's Sporting Goods. This positive momentum could reassure investors about the company's ability to navigate economic headwinds and maintain market share. For employees, stable financial performance often translates to job security and potential growth opportunities. Customers benefit from a healthy company that can invest in better product selection and store experiences. The substantial share repurchase program, with $536.5 million remaining, also indicates management's confidence and commitment to returning value to shareholders, potentially boosting stock performance.

Risk Assessment

Risk Level: medium — While Q3 net income increased by 8.8% to $71.56 million, the thirty-nine-week net income decreased by 14.6% to $243.08 million from $284.82 million, indicating potential longer-term profitability pressures. Merchandise inventories, net, increased significantly to $1.70 billion as of November 1, 2025, from $1.31 billion at February 1, 2025, which could lead to inventory obsolescence or markdown risks if demand softens.

Analyst Insight

Investors should monitor ASO's inventory levels closely for the upcoming quarters, as the substantial increase to $1.70 billion could signal future markdown risks. However, the ongoing $536.5 million share repurchase program suggests management believes the stock is undervalued, making it a potential buy for long-term investors seeking capital returns.

Financial Highlights

debt To Equity

0.47

revenue

$1.38B

operating Margin

7.25%

total Assets

$5.41B

total Debt

$481.27M

net Income

$71.56M

eps

$1.05

gross Margin

35.66%

cash Position

$289.49M

revenue Growth

+3.0%

Key Numbers

• $1.38B — Net Sales (Increased 3.0% for the thirteen weeks ended November 1, 2025, compared to $1.34 billion in the prior year.)
• $71.56M — Net Income (Increased 8.8% for the thirteen weeks ended November 1, 2025, compared to $65.76 million in the prior year.)
• $1.05 — Diluted EPS (Increased from $0.92 for the thirteen weeks ended November 2, 2024, to $1.05 for the thirteen weeks ended November 1, 2025.)
• $243.08M — Net Income (YTD) (Decreased 14.6% for the thirty-nine weeks ended November 1, 2025, compared to $284.82 million in the prior year.)
• $3.57 — Diluted EPS (YTD) (Decreased from $3.86 for the thirty-nine weeks ended November 2, 2024, to $3.57 for the thirty-nine weeks ended November 1, 2025.)
• $1.70B — Merchandise Inventories, net (Increased from $1.31 billion at February 1, 2025, to $1.70 billion at November 1, 2025.)
• $99.9M — Share Repurchases (Amount paid for repurchases during the thirty-nine weeks ended November 1, 2025.)
• $536.5M — Remaining Share Repurchase Authorization (Available under the 2024 Share Repurchase Program as of November 1, 2025.)
• 66.68M — Common Shares Outstanding (As of December 2, 2025, reflecting share repurchases.)
• $289.49M — Cash and Cash Equivalents (As of November 1, 2025, a slight increase from $288.93 million at February 1, 2025.)

Key Players & Entities

• Academy Sports & Outdoors, Inc. (company) — registrant
• Academy, Ltd. (company) — indirect subsidiary and operating company
• Securities and Exchange Commission (regulator) — filing oversight
• One Big Beautiful Bill Act (regulator) — new U.S. tax law
• $71.56 million (dollar_amount) — net income for thirteen weeks ended November 1, 2025
• $1.38 billion (dollar_amount) — net sales for thirteen weeks ended November 1, 2025
• $243.08 million (dollar_amount) — net income for thirty-nine weeks ended November 1, 2025
• $4.33 billion (dollar_amount) — net sales for thirty-nine weeks ended November 1, 2025
• $99.9 million (dollar_amount) — aggregate amount paid for share repurchases for thirty-nine weeks ended November 1, 2025
• $536.5 million (dollar_amount) — amount available for share repurchases under the 2024 Share Repurchase Program

FAQ

Risk Factors

• Inventory Management and Seasonality [medium — market]: The company's significant increase in merchandise inventories to $1.70 billion as of November 1, 2025, from $1.31 billion at February 1, 2025, presents a risk. This buildup, coupled with the seasonal nature of sporting goods sales, could lead to markdowns and impact profitability if demand does not meet expectations.
• Supply Chain Disruptions [medium — operational]: While not explicitly detailed as a new risk, the reliance on a robust supply chain for merchandise is inherent. Any disruptions could impact the availability of goods, as seen in the inventory levels, and potentially affect sales and margins.
• Tax Law Changes (OBBBA) [low — regulatory]: The enactment of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, is noted to materially decrease current tax expense and increase deferred tax expense. While the company expects no net impact on the effective tax rate, changes in tax legislation always introduce a degree of regulatory uncertainty and potential for future adjustments.
• Leverage and Debt Service [medium — financial]: The company maintains significant long-term debt and lease liabilities totaling $481.3 million and $1.26 billion, respectively, as of November 1, 2025. While interest expense has been relatively stable, any downturn in performance could strain the company's ability to service this debt.
• Competition in Retail [high — market]: The sporting goods retail sector is highly competitive. ASO faces competition from national chains, specialty retailers, and online platforms, which can pressure pricing and market share.
• E-commerce and Digital Transformation [medium — operational]: The shift towards online retail requires continuous investment in e-commerce capabilities. Failure to adapt and compete effectively in the digital space could lead to lost sales and market share.
• Share Repurchase Program Execution [low — financial]: The company has a substantial remaining share repurchase authorization of $536.5 million. While this can enhance shareholder value, the timing and execution of these repurchases should be monitored to ensure they are accretive and do not strain liquidity.
• Contingencies and Commitments [low — legal]: As with any public company, ASO is subject to various legal proceedings and contractual commitments. While specific details are in Note 10, these can represent potential financial liabilities or operational constraints.

Industry Context

Academy Sports & Outdoors operates in the highly competitive sporting goods and outdoor recreation retail sector. Key trends include a continued shift towards e-commerce, demand for athleisure wear, and increased consumer interest in outdoor activities. The industry is characterized by strong seasonal sales patterns and a need for effective inventory management to avoid markdowns.

Regulatory Implications

The enactment of the One Big Beautiful Bill Act (OBBBA) is a notable regulatory event, expected to reduce current tax expenses and increase deferred tax expenses. While the company anticipates no net impact on its effective tax rate, changes in tax legislation can introduce complexity and potential future adjustments.

What Investors Should Do

1. Monitor inventory levels closely.
2. Analyze SG&A expense trends.
3. Evaluate the impact of the OBBBA.
4. Assess the effectiveness of share repurchases.
5. Scrutinize the increase in 'Assets held for sale'.

Key Dates

• 2025-11-01: End of thirteen and thirty-nine week periods — Reporting period for the current 10-Q, showing year-over-year performance changes.
• 2025-07-04: Enactment of the One Big Beautiful Bill Act (OBBBA) — Expected to materially decrease current tax expense and increase deferred tax expense, impacting the company's tax profile.
• 2025-02-01: End of prior fiscal year — Balance sheet comparison point for cash and cash equivalents and merchandise inventories.
• 2024-11-02: Prior year thirteen and thirty-nine week periods end — Basis for year-over-year comparisons of net sales, net income, and EPS.
• 2024-01-31: Prior fiscal year end — Reference point for inventory levels and other balance sheet items.

Glossary

Right-of-use assets

Assets representing the right to use a leased asset for a specified period, recognized under ASC 842 lease accounting standards. (Significant component of ASO's balance sheet ($1.23B as of Nov 1, 2025), reflecting their extensive store footprint.)

Deferred tax liabilities, net

Taxes that are expected to be paid in future years, arising from temporary differences between accounting income and taxable income. (Increased to $272.7M as of Nov 1, 2025, partly due to the OBBBA, impacting future cash flows.)

Gross Margin

The difference between net sales and the cost of goods sold, representing the profit before operating expenses. (Improved to $493.4M for the quarter, indicating better pricing or cost control on merchandise.)

Selling, General and Administrative Expenses (SG&A)

Costs incurred in the normal course of business, excluding the cost of goods sold, such as salaries, rent, marketing, and administrative overhead. (Increased to $393.0M for the quarter, outpacing sales growth and impacting operating income.)

Operating Income

Profitability from core business operations before interest and taxes. (Decreased for the 39-week period ($342.0M vs $383.9M), despite higher sales, due to increased SG&A.)

Common Shares Outstanding

The total number of shares of a company's common stock that are currently held by all its shareholders. (Decreased to 66.68M as of Nov 1, 2025, reflecting the impact of the share repurchase program.)

Assets Held for Sale

Assets that management has committed to sell and are available for immediate sale in their present condition, and are actively being marketed. (Appeared on the balance sheet ($20.7M as of Nov 1, 2025), suggesting potential divestitures or closures.)

Write off of deferred loan costs

An expense recognized when previously capitalized costs associated with obtaining debt financing are expensed, often due to refinancing or early extinguishment. (A one-time charge of $449K in the prior year's 39-week period, not present in the current period.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, Academy Sports & Outdoors reported mixed results. For the thirteen weeks ended November 1, 2025, net sales increased by 3.0% to $1.38 billion and net income rose by 8.8% to $71.56 million, with diluted EPS improving to $1.05. However, for the thirty-nine weeks ended November 1, 2025, net income decreased by 14.6% to $243.08 million and diluted EPS fell to $3.57, despite a modest 1.7% increase in net sales to $4.33 billion. Gross margin improved year-over-year for the quarter, but SG&A expenses increased at a faster rate, impacting year-to-date operating income. Inventory levels saw a substantial increase, and cash and cash equivalents remained relatively stable.

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share ASO The Nasdaq Stock Market L

Filing Documents

• aso-20251101.htm (10-Q) — 1113KB
• exhibit311q32025.htm (EX-31.1) — 11KB
• exhibit312q32025.htm (EX-31.2) — 11KB
• exhibit321q32025.htm (EX-32.1) — 6KB
• exhibit322q32025.htm (EX-32.2) — 6KB
• aso-20251101_g1.jpg (GRAPHIC) — 30KB
• 0001817358-25-000191.txt ( ) — 5101KB
• aso-20251101.xsd (EX-101.SCH) — 28KB
• aso-20251101_cal.xml (EX-101.CAL) — 53KB
• aso-20251101_def.xml (EX-101.DEF) — 126KB
• aso-20251101_lab.xml (EX-101.LAB) — 456KB
• aso-20251101_pre.xml (EX-101.PRE) — 307KB
• aso-20251101_htm.xml (XML) — 601KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 3

Financial Statements

Item 1. Financial Statements 3

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 19

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 34

Controls and Procedures

Item 4. Controls and Procedures 34

OTHER INFORMATION

PART II. OTHER INFORMATION 35

Legal Proceedings

Item 1. Legal Proceedings 35

Risk Factors

Item 1A. Risk Factors 35

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 36

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 36

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 36

Other Information

Item 5. Other Information 36

Exhibits

Item 6. Exhibits 37

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS ACADEMY SPORTS AND OUTDOORS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollar amounts in thousands, except per share data) November 1, 2025 February 1, 2025 November 2, 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 289,487 $ 288,929 $ 295,996 Accounts receivable - less allowance for doubtful accounts of $ 2,195 , $ 2,752 and $ 2,609 , respectively 17,508 16,759 18,124 Merchandise inventories, net 1,701,163 1,308,840 1,524,978 Prepaid expenses and other current assets 64,754 95,621 68,884 Assets held for sale 20,658 — — Total current assets 2,093,570 1,710,149 1,907,982 PROPERTY AND EQUIPMENT, NET 591,067 525,136 503,115 RIGHT-OF-USE ASSETS 1,226,518 1,173,075 1,189,116 TRADE NAME 579,588 579,007 578,815 GOODWILL 861,920 861,920 861,920 OTHER NONCURRENT ASSETS 61,321 51,676 50,830 Total assets $ 5,413,984 $ 4,900,963 $ 5,091,778 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 793,558 $ 612,424 $ 764,489 Accrued expenses and other current liabilities 305,786 230,323 314,289 Current lease liabilities 124,685 115,134 130,236 Current maturities of long-term debt 3,000 3,000 3,000 Total current liabilities 1,227,029 960,881 1,212,014 LONG-TERM DEBT, NET 481,266 482,679 483,148 LONG-TERM LEASE LIABILITIES 1,260,067 1,185,741 1,173,158 DEFERRED TAX LIABILITIES, NET 272,733 256,815 250,970 OTHER LONG-TERM LIABILITIES 26,620 10,812 10,961 Total liabilities 3,267,715 2,896,928 3,130,251 COMMITMENTS AND CONTINGENCIES (NOTE 10) STOCKHOLDERS' EQUITY: Preferred stock, $ 0.01 par value, authorized 50,000,000 shares; none issued and outstanding — — — Common stock, $ 0.01 par value, authorized 300,000,000 shares; 66,676,966 ; 68,332,961 and 69,932,128 issued and outstanding as of November 1, 2025, February 1, 2025 and November 2, 2024, respectively 667 683 699 Additional paid-in capital 263,736 247,094 245,511 Retained earnings 1,881,866 1,756,258 1,715,317 Stockh

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