Academy Sports + Outdoors (ASO) Reports Disappointing Q2 Results, Updates Guidance

Academy Sports + Outdoors has released its financial results for the second quarter of fiscal 2025, showcasing an increase in sales and adjustments in guidance. The company’s performance and future outlook provide key insights into its strategic direction.

ASO Fails to Meet EPS Expectations in Q2 2025

Academy Sports + Outdoors (ASO) has reported its financial results for the second quarter of fiscal 2025, revealing a 3.3% increase in net sales to $1.599 billion compared to $1.549 billion in the same period last year. This growth was primarily driven by a 17.7% rise in eCommerce sales and positive performance from new store openings in Florida, Virginia, and West Virginia. Despite these gains, the company’s diluted GAAP EPS for the quarter was $1.85, falling short of the expected $2.05. The reported EPS also marked a decrease from $1.95 in the same quarter of the previous year.

Comparing the current performance against expectations, the company’s revenue came in slightly below the anticipated $1.6 billion, while the EPS missed the forecast by $0.20. The comparable sales increase of 0.2% was a notable improvement from the previous year’s decline of 6.9%, indicating a positive shift in consumer engagement with the brand. However, the net income for the quarter decreased by 12.1% to $125.4 million, compared to $142.6 million in the prior year.

The company’s strategic initiatives seem to be gaining traction, as evidenced by the positive market share movement and the opening of three new stores. These factors contributed to the overall sales growth, although the decline in net income suggests that there are still areas needing improvement. The adjustments in operating income, which decreased by 11.6%, highlight the challenges the company faces in maintaining profitability amidst rising costs and competitive pressures.

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ASO Narrows Guidance for Fiscal 2025

Looking ahead, Academy Sports + Outdoors has revised its guidance for fiscal 2025. The company has narrowed the low end of its sales guidance from a decline of 4.0% to a decline of 3.0%, while maintaining the high end at a positive 1.0%. This adjustment reflects a more optimistic outlook for the remainder of the year, driven by the company’s confidence in its strategic initiatives and market positioning.

The updated guidance also includes expectations for a gross margin rate between 34.0% and 34.5%, and a tax rate of 23.5%. The company has raised the low end of its GAAP net income guidance from $350 million to $360 million, while maintaining the high end at $410 million. Similarly, the adjusted net income guidance has been revised to a range of $380 million to $430 million, reflecting the company’s focus on improving profitability.

Academy Sports + Outdoors plans to continue its expansion efforts by opening 20 to 25 new stores in fiscal 2025. This expansion, coupled with strategic tariff mitigation actions and pricing optimization strategies, is expected to support the company’s growth objectives. The company’s ability to adapt to changing market conditions and consumer preferences will be crucial in achieving its updated financial targets and sustaining long-term growth.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.