Academy Sports + Outdoors Inc. saw net sales dip 2.2% in its second fiscal quarter, which ended on Aug. 3.

Comparable sales fell 6.9%, a steeper decline than the 5.7% drop seen in the previous quarter, according to the retailer’s latest earnings report. CEO Steve Lawrence attributed the challenging quarter to economic headwinds, a distribution center backlog from a new warehouse management system, and a storm-heavy season in key markets.

As part of its growth initiatives, Academy Sports’ ecommerce business posted its third consecutive quarter of positive growth, with online sales now accounting for 9.7% of total sales — up 30 basis points from last year, Lawrence told investors during the earnings call.

Academy Sports + Outdoors ranks No. 145 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s top online retailers by their annual web sales. Digital Commerce 360 projects Academy Sports + Outdoors ecommerce sales to reach $734.26 million in 2024.

Academy Sports + Outdoors ecommerce sales

Academy Sports sales and financial highlights in Q2

For fiscal Q2, Academy Sports reported net sales of $1.55 billion in Q2. That’s a 2.2% drop from $1.58 billion in the same period last year. Net income fell 9.2% to $142.6 million, from $157.1 million a year ago.

During the earnings call, company executives noted the financial strain on the company’s core customers — primarily active, young families — due to inflation and rising credit card debt.

These customers, earning on average $50,000 to $150,000, remain cautious with spending. Academy has seen a rise in credit card and buy now, pay later (BNPL) usage as household debt hits multiyear highs, according to chief financial officer Carl Ford. While inflation has eased, high prices also continue to impact spending, and sales boosts during major shopping events couldn’t fully offset slower periods, he said.

While sales during Memorial Day, Father’s Day, and the 4th of July performed well, back-to-school shopping in July lagged as many customers delayed purchases into August, pushing some sales into Q3, Lawrence said.

Severe weather, including tornadoes in Houston and Dallas and Hurricane Beryl in July, also disrupted business in key markets. Despite the challenges, Lawrence noted that Academy held on to much of the business gained over the last five years, with Q2 sales up 25% from pre-pandemic levels.

Growth and initiatives

New store openings remain a key driver for the company, Lawrence said. Academy Sports, which operates 285 stores across 19 states, opened one new store in Q2 and three so far this year. The company plans to open 15 to 17 new locations by the end of fiscal 2024, including nine this fall.

Lawrence also pointed to the early success of Academy’s same-day delivery partnership with DoorDash, which launched in June. The service is attracting younger and urban customers, particularly in areas without many physical stores, he said, with average delivery times under an hour through the DoorDash app.

Currently, orders placed through DoorDash are handled separately from Academy Sports’ main website and aren’t included in its ecommerce revenue. However, with Phase 2 of the integration, same-day delivery will be available directly on Academy Sports’ site, and those sales will then contribute to the company’s online revenue, Lawrence said.

Also during Q2, the retailer launched its “myAcademy” rewards program, offering perks like a 10% welcome discount, free shipping on orders over $25 (compared to $50 for non-members), and faster checkout online and in the app.

Daily signups for the program have more than tripled compared to prior efforts, Lawrence said, putting Academy Sports on track to surpass 10 million members by the end of 2024.

“For the remainder of the year, we will focus on increasing traffic and conversion for our stores and website, by leveraging our improved targeted marketing capabilities, and expanding our new loyalty program,” he said in a statement.

Outlook for the year

Academy revised its full-year outlook for fiscal 2024, projecting net sales between $5.9 billion and $6.1 billion. This reflects a 4.3% to 1.4% drop in sales growth compared to 2023.

Ford said the final sales outcome will depend on August trends and the success of efforts like the new store openings, enhanced promotions, loyalty program growth, and leveraging the DoorDash partnership, especially after holiday shipping cutoffs.

Academy Sports Q2 sales recap

• Net sales: $1.55 billion, down 2.2% from $1.58 billion in the same period last year.
• Comparable sales: Down 6.9%.
• Net income: $142.6 million, down 9.2% from $157.1 million.

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