ASO - Earnings call 3 2024 | Academy Sports and Outdoors, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the Academy Sports and Outdoors Third Quarter Fiscal 2023 Results Conference Call. At this time, this call is being recorded. [Operator Instructions]I would now like to turn the call over to your host, Matt Hodges, Vice President of Investor Relations for Academy Sports and Outdoors. Matt, please go ahead.

Matt Hodges

Good morning, everyone. the call. and joining XXXX third for results financial you Academy Outdoors Sports quarter Thank the are statements on management statements. Chief release Participating call the during Financial Carl Executive and be Officer.As Ford, this Officer; call a considered made reminder, comments in may earnings Steve today's by Lawrence, forward-looking Chief are statements results and differ from materially risks to and could projections. that These uncertainties to our subject actual cause expectations our earnings the and and uncertainties are factors include, SEC identified in release to, filings. the risks our These not in but limited company no remarks non-GAAP The undertakes any obligation forward-looking also financial to statements.Today's revise certain refer to measures. the available are included at to Lawrence call in is now comparable will Steve which the turn release, Reconciliations GAAP investors.academy.com.I over most remarks. today's his measures to earnings for Steve?

Steven Lawrence

and our thank us morning, call. joining for third earnings Good on you Matt. quarter Thanks,

in carried a under continuation QX. shop of the careful seen into through announced down from was the you the customer had billion, challenging the per quarter and with is saw they lulls. $X.XX.Now, shopping The As at sales, saw third adjusted during in want coming then sales clearly key the themes how during emerge and the results X.X% one share which we calendar first Based total negative a the earnings for of when they half quarter in key the $X.X this we the in money. retreating translated X% coming their comp. pressure also We've year a with on being was is these moments of morning, earlier we and to and into about decide to on customers spend trend

merchandise, take power on new gravity promotions sales month, to that customers that theme and run, brand their and expand in value and also the in such digits. or place the by we private as quarters mid-single prior this by we our continues down at to offerings year, stores looking events to customers end Another of see assortment August items our clearance each key the focusing our in the were be season. towards continued online.Breaking innovative down Similar to quarter buying brands

combination rec, we negative that September some business. end coupled month the that mid-single in cooler by the driven with later versus result sales our in a outdoor increased coming with temperatures, in we of The was and sales division, as well digit October furniture, performing were Declines team fitness bikes business and X.X% in comp.Looking business. outdoor our continued our in by sports and average results as discussed sports we lasted Once This early the good to natural negative Day October, resulting September got the the by forward and past the month, our in school driven see calendar, comp. event month, sales temperatures, fall did we which low-double seasonal call, to on momentum QX saw back categories. entire on in the than we an saw slowdown we a digit uptick early into shopping As that We sales our offset QX, ran which at best by attribute softness strength coupled the a believe business. improvement in we a saw on into in of Labor a sales suppressed much at but trend, early warmer a cooking lack for carried decrease. partially was with trend September, in

lap started we quarter. pick mentioned approached X.X% last as But this Our as of end earlier, from saw season, towards up comps to I ran outdoor year. hunting October for the division softer down we business the

which mixed believe gravitated sales year above-average down. soft activity Customers X.X% at the September. as primarily [indiscernible] caused in Promotional the our high-margin was experienced for the towards decrease better that clearance, which we X.X%. above our business down XX.X%, This seasonal ran a for of Our you believe apparel sits quarter the of continues basis last but quarter by with initiatives, than the which a businesses out products. some like items.Moving temperatures XXX we September on gross quarter at our in levels.Now, but to I'd in guidance, to annual rate in merchandise Apparel and the gross updates the line resulted a then remain footwear, moved margin warmer lower-margin back quarter our XX instead came our And three was our to the off during footwear fall softer of the We roughly we through temperatures against couple driven into plan for pre-pandemic in October, during slightly was in last school, was below started starting by to coming range is above strong primary tapered summer margin, versus demand year. which versus early long XX.X%, our our was prior down with XX margin and tamped year. basis points which stores. experienced points expectations. We new quarters progress point erosion basis driver give margin

opened the in stores with locations During we X Virginia, and Texas. new quarter, Indiana, third Missouri

huge to single that our November, openings a represent opened of During with for make our This help is number we've month, largest of opened team members for company, all take stores to accomplishment the single ever moment want a XX in recognize new X a this year, possible. for we on weekend. XXXX. up bringing that and to stores X a our the total final our November I

ensure new into or grand opening. a with better each continue we of getting open store to a we insights As new factors gain what launch successful locations,

in additional we that opened up this store footprint that markets more be through sales need a legacy ticket data year, to sample our their has After own the apparent as or open newer to conversion learn therefore a openings, also sales small, will on the to both well [ our sales have have the become brand will build group, track ramp more stores ] future longer and current on awareness is 'XX to awareness, as that on XXXX what to and is we ramp becoming meet in are likely we'll While from time get surpass investment and targets.What stores we outside started analyze the maturity. is will size of is where in clearer markets as from high take open our and expectations traffic, stores new and refine brand the as used openings. XXXX, additional still store for stores data

have stores that we about the that number dot-com to the of new call.Another good our forward, look we pipeline is open our the accelerate growth earnings of around business. we're of As excited growth guidance to XXXX plan one initiatives our during identified. in we've We'll next

quarter has advancements While made the third in we've the challenges will some growth year, we channel this help that similar our faced this future. drive in meaningful and believe feeling brick customers that mortar the

we partnership last announced our new During Fanatics. call, quarter's with earnings

days, quarter giving for While expanded Xx season. the this dramatically NCAA it the early our in our the styles we just with in offering number started holiday time partnership, customers to with gift we've is of offering over

add more wider we've greatly a expand hunting. been as our [ us SKU [ Sezzle, Over continue much will service best expanded hard categories functionality fan catalog working ] also a paying as base.In adding that supports on help addition new additional for growth, to such ] significantly option such season. SKUs offerings reach as time, each larger, will online our and extensive league's their to [ ] We new to and we start be leverage allowing

positioned As to we our initiative including Cyber head I'd with demand like into expanded update additional the on from the holidays, customer we're capture in Monday.The surge that to and assortment Week you Green key all shopping the that we believe well data and online platform. is new this capabilities third events,

spent to of and at segments. call, adding During this to quarter spend QX. Team fine-tuning along our increase traffic help tool segmentation developing customer toolbox end last work, new various greater our last has QX. discussed from playbooks our our we drive with the customer the

engagement, We help revenue. of CDP main customers with and have us focuses our connection a will which build increasing both sales our incremental drive and customer work, deeper improving in X identification

this While results. marketing initial capabilities to we've our our just of for begun have promising leverage yielded new tests some tool,

was in our help channels. to order the marketing reach our expand grow to various of file test addressable customer First

this group sent the case During offered customer exciting increasing we a our that group, QX, to of we offers of [ customers the trip drive of [ XX%.Another that increase with frequency discount spend both with campaign about the number higher that initial basket subset leveraging reaching to targeted lapse best example use a our on ]. our small ran monitored growth we an customers. managed emails by us continued shop ] with helped saw with a focus a at we're reactivation was how data incremental and of tests size. What was We at this we after this platform,

will is QX don't scaling moving start like and with financial hard The in DC a beyond.The doing has touch of working XXXX initiative to our on continue we is to our for needle our XXXX next core open enabler we have live these Carl? the range CFO, will of I'll tests the getting learnings guidance. who update go to chain believe able impact of final as through many new our roll plan you management out to we performance, This with we're we're new dive all supply been stores.Now, the to turn While warehouse over the on long supply deeper Carl a a it improving ready along results, key our to we're planning to an and huge and we'll running efficiencies year. implementation that expect I'd team be install Ford, walk they Georgia around of spring chain. anticipating in start that system, our on do in work the

Earl Ford

appreciate morning, everyone. the Thank you, Steve. you call. joining We Good

year of XXXX, in X.X% in sales the The represented partially size. walk ticket slight our pressure of Consistent with performance, total experienced comparable $X.X me X.X% details was billion, e-commerce driven through sales third to E-commerce sales channel. X%. increase of sales in third compared quarter we decline Let were transactions, X.X% decline of the offset a in with by vendor an savings. quarter higher point results. offset a and increase was mentioned, sales you for by Net decline freight overall an by with our negative rate basis lower quarter.As merchandise in the XX to promotions due X.X% third to driven compared Steve compared The decline prior margin our a to and sales, in XX.X%, last the year. clearance costs, sales. margin were allowances a in shrink of gross quarter margins, overhead XX.X% in was Higher a merchandise decline planned increase slight mix

substantially higher pre-pandemic, $XXX.X demonstrating the XXXX. margin the made at business operate compared company, expenses to the structural.During XX.X% to a gross rates of basis the of an As operational of changes are or we past continue over quarter, that third quarter to were increase net the sales, than years few points million XXX SG&A

sheet share challenging, and omnichannel, consumer million customer earnings growth control of was expense per driven of as are borrowings XXX% through the credit cash last was of $X.XX. of resulting our profitability were expenses per no strong future. increase support $XXX billion we share $X.XX.Our on variable facility net the X.X% by the the quarter. more initiatives areas in quarter outstanding investing while As million reduced sales, focused in diluted the investments diluted making in demand on our chain Adjusted at $X operating we SG&A than our optimizing GAAP and remains balance versus income long-term our end stores, We with earnings $XXX in new supply year, that such are for remains data.Net and or in

increase a Our believe compared and compared that assortment was million operating the X%. cash is in appropriate in our to billion, This units the $XX.X to quarter, from and declined was year current of dollars inventory third On $X.XX basis, to per business.During store both which the net Heading a season, into last Academy holiday balance level year. generated last flat support activities. the is units. of XX% we remainder inventory

shareholders. execute We capital to cash continue allocation growth our our by strategy self-funding initiatives to and returning

quarter, the approximately repurchased million and shares paid XXX,XXX million $X.X dividends. During $XX for in we out

million, share On we available of $XXX the end payable Board of repurchase quarter, repurchase on spent share share per approved available of $XXX commitment our X remaining repurchase of capital approximately as XXXX.Demonstrating XXXX the $XXX years. million a the capital on the authorization. stockholders the the XXXX, million the a January with had also allocation XX, record share As million Year-to-date, to of $XXX current strategy, our million company November company to now approved has XX, dividend of expenditures. XX, December authorization. new on next $XXX $X.XX for authorization Board Together the X-year has the

sales to full guidance revised results year-to-date and on the to the to $X.XX $X.XX we billion. $X.XX $XXX spend our and billion are to expectations now the year, million.Shifting to comparable to range This For net billion for of a our fourth sales quarter, of between expect XXXX $X.XX we negative range million negative to Based X.X% guidance. X.X%. narrowing $XXX current from previous translates billion fiscal

share some GAAP now to income income earnings range million. to $XXX gross Our guidance per are Steve activity.As year-end we fiscal cash between Steve? turn beyond from rate as fiscal share. call The include QX finish outstanding full adjusted providing expect now in will remarks. million $XXX million estimates GAAP from and margin XXXX. $XXX XXXX give year $X.XX net $X.XX XX.X%. March to million share taxes XX.X% expected range and diluted GAAP potential earnings guidance on weighted plan million are over flow of far now XX.X $XXX is to million in $XXX share to million a are to share $X.XX adjusted to year count repurchase share to the not fiscal diluted do share on per to expected expected of share per to between shares before per is full call.I calculated our be per to for $XXX average We back and closing per the XXXX, generate per to expected diluted for now $X.XX and any free earnings

Steven Lawrence

and from That the challenging during no start has can moments today, the for upcoming QX our customer year. in shop you to bigger seen for third than us. moment And there we're commentary is out the Team on the season. holiday said, quarter As November. we've tell being and key the solid was preparing come been off calendar, a all

Thanksgiving early pattern we put a normalized during set traffic We As a promotions return more to Thanksgiving We for we strong still generate the we less the success part us, week. biggest of patterns of have lot strong Black Friday reaction head into ever.While from ahead promotion of the of helped one saw demand together some as saw pull-forward with expected, events December. customer, business our yielding a of of pre-pandemic we month. momentum of our

Looking quarter, giftable all we an a inventory have for forward on the value our into key outstanding been past I past Christmas.With and with been brands of of and customers we with have is in teams open over supported it in us lot help the position been years will remainder the spend, strong of X the to tell focus over I've you excited promotional best for marketing our the that new cadence, aggressive should all we've are innovative deliver this in DCs categories, a holiday, and along customers by items X year. customers.Our that, our now ready up questions. and a for stores voting can which

Operator

[Operator Instructions] question from Our Nagel first with Brian comes Oppenheimer.

Brian Nagel

plan are takes is, company? to get question this pieces, the the recognizing we guess business early as puts trajectory guidance you question, positive kind the results as But the the comp at weakness. of looking I the moving first you haven't last next we think do the you here I for year, few about comps maybe back the top line to and at and kind for to about but quarters, talked so 'XX My over and of given look have what

Steven Lawrence

back start when last Carl I'll in. the think years, our off may Yes. and reset. and pandemic, coming we'd Thought But year, double-digit thought we X having customer we I going year jump shared we this back-to-back to about that year on challenged this comp call, to of this was year. is anticipated pressure. is this under kind of Clearly, is growth the get the a 'XX thing be

strategy. don't we like feel a have got we challenge a So challenged We've customer.

move focusing the short for. the voting as against that we the looking things delivering managing sure Customer for we've is is we're forward So been on making things customer through term, value. is

ways: proposition; gravitate of in delivering towards value at run we're we on And spectrum, seeing everyday periods then each we're end value couple second, newness. customers during So events a of season. clearance our promotions of the first, that that the the and run we the different year; time end other key the during third, the

and diet to through a has lapping new down start our was also comps. said, ideas.That steady our outdoor we seen in brands quarters, another So been comp as of we're the on which, of started that couple new better delivering focused get business, business double We've being drag digits. first softer

And so, -- I right, year think to guidance for ready into not next move as year. and we you're next give we're

are returning customers' the terms leaning focus we That longer I are things out base to key our stores, on and to what determine. focused think we focus productivity dot-com within can existing on. those more when of on think of opening value the can't getting in the health comps. are turns a growth think little into What our ingredients said, initiatives and term all have we that's newness, of stores, positive that new of bit, being around in the the we we our we're things back control, that

Earl Ford

the We're got with running running say walked and They're that up would them. would of in there's new add it. I within positive out sales customer associated we July. data mentioned the stores comp a a Brian, and the gate. there only thing waterfall Yes, of it big lot He embedded initiatives I omnichannel. also tests through, platform, the to Steve

I working a tool our think think the I as and ramp customer time. getting tailwind we for with more maturity, long that's a data,

Brian Nagel

the where I helpful. relative with know again, internal the amount there we're dealing in generally of capturing demand across all Or could time. you're question, merchandising, look, be initiatives here? business, you've to you the backdrop your second No, done But share fluid look potentially very you that's particularly think as at with capturing parts you share are board? very are do losing a relatively Then a -- short you

Steven Lawrence

we a on and on When first basis, at little it than Yes. at know yearly share quarter. of with share. longer or a we're month longer-term on look picking a bit basis, just we broad Listen, happy look a we horizon look up a over at market we very it basis, look a a at we it When we're that.

look up you sales we're still at our XX%. about If versus XXXX,

here we it. we believe over believe So we're and always holding share there's there. Beneath But share of a that surface, and past broadly, are and the lot on to takes years, on puts X and picked up holding share. the up we've picked we to

Operator

Our Michael comes UBS. next question Lasser from with

Michael Lasser

down looking investments promotional discounting With types to you points, and are the basis order other to your of margin in at how top line? need XX continue these make drive gross the to

Earl Ford

referenced basis of of up to made. back points. XXX that We're a hearken 'XX. points I to basis some kind From the structural Yes. you margin about improvements XX gross FY the standpoint, would we've

with that there I cycle a things to then of optimization, position like really bunch strength. toys, We from a done point, life managing implemented job lasting your made that exited We system a power, think driven lot power want them. codes, inventory learning. you management luggage, inventory we are and and season open-to-buy weren't the reg Pricing, them clearance, done of and They really enhancements, We've early really we've We last to some replenishment, good and around and initiatives of sports overall through just with get optimized management. but synonymous pretty price upgraded about of have categories allocation, I systemically run electronics. to talked system the and just outdoors, about a updates I those we've managing merchandising feel there. that to continue to better And promotions, a buy process. better.

basis decline XX that value point offering. driven by guidance. planned promotions our our included and gravitating It really And towards side was so, the our customer in of was

everyday like -- We to are going an we're provider. value continue

going So key to you're We're guidance. promote going to we've those only shopping that really every see moments, embedded within value during day. and the

to on bit the our little XX.X%. reiterate, quarter was And year we and low low, than so, guidance, out fourth the a fourth the quarter that. it's in The margin I do in gross there last want worse put range high that this

than some costs. chain high, tailwinds On a got we've promotionality, We're on higher the with planning it's bit that. little the and supply

Michael Lasser

the My reduce experience? about follow-up year, next quarter? is, is question SG&A customer as room you more look to impacting the there fourth much how you thinking to are without that how And in

Earl Ford

won't but That get an next up omnichannel, around gauge strategic We're year. of last from that kind supply customer to be third was this a satisfaction I than continue about SG&A data, we will keep to scores, and Yes. our into was costs expense was of $X our chain. quarter standpoint, say, stores, really flexing I investments by guidance, customer year's looking million at -- proud new and really that those. well, variable on our we more

about SG&A we out this. think there, XXX we range basis you if deleverage put the in had along of plan long So span of points about that the

by We sales was deleverage performance. The gross the happy largely variable. deleverage of Now, right and implies associated guidance fixed healthy they're still to basis supply year. issue driven SG&A with now. customers offset this improvements, And cost the is in that committed chain. those way about XXX with points our our in our telling strategic is investments, flexing remain a we're by margin in The us

Operator

Will from is Wells Gaertner with question Fargo. next Our

Frederick Gaertner

touch by [ to by reduced million, looks elaborate $XXX you $XX Can ] assumption. on, PBT cut that first, It it lower cash million. you've like free on reduced million, the CapEx wanted $XX flow reduction? by Just

Earl Ford

play QX in bulk the Will, are about standpoint, sales the end. reduction on flow sales at if of look overall things some I really of X%, low up your good low operations down sales. is that the X.X% $XXX that come cash balance cash a absolutely. There flow it. feel timing the correct. year-end, free rate Yes, do into The up on year cash million associated net last From flow that sales. with and made is from X.X%. we're our from our as cash you operations, flow just Year-to-date, want XX% on at to a We is to of down reinforce, down the

side, On the committed new customer chain. to, it's it's we're stores, it's what omnichannel, investing think We done on data, and it's supply well.

We will those have into X investing no initiatives. regrets

stays inventory management So good. really

You in really that. of the But decline flow cannot manage merchants sales without causes timing some and are our your line open-to-buy for cash We're year-end just really proud the leading then stuff. in nature the top process.

Frederick Gaertner

That's great. me. more And for just one

you talked But customer -- know I does little And data on platform, this you can how also you if see? the -- hit What how? to so, but a are comps. you expecting margins? this I are know beginning in merch will you what this about Just benefits see? And this bit, to benefit benefits benefit

Steven Lawrence

I'll take one. that Yes,

data us in likened in customer had a couldn't tell file. to customer different going the we on we've blunt past, So is and in We online places. We of what understand with shopping before our how instruments bunch store. was this pretty same always had

our segmentation. of customer started doing platform quarter. second is work And holistic So we around view preliminary customer. some our have now, installed We in what new the a we data

it what movement a we within basis segments. we're at see actually even And looking on weekly, is monthly, is can now so, quarterly

can other shopping less maybe So cases, certain maybe in or bit spending can we see frequently. cohorts some within see a a less segment certain we cohorts per little trip,

what get react differently. so, testing started different to to we And triggers is them

one uplift on about talked to our in incent little spend try cases saw up-spend. best cases those to who with and of we less in had them extra I the shopping both call was the make were one we use to In a we goal customers frequently. who case, was but down another And with cases, that some after year-to-date, -- we little the And saw with them the some small sales continue to a our bit maybe test promotion. what was to So had their triggered they're trip. tests, at promotion behavior we get an -- first customers

would tool all markdowns our use perspective, going broad-based is robust So lot to this do a it's more be promotions. for margin with us precise customer longer it's to of I term, what segments.From and think can different a versus see having our we going us make what much is more a across to targeted

going promotions are see continued and on more I a the that think you're to pull-back targeted to that focused, individualized customers.

fund not I'm think So do targeted to company-wide there's sure from on we those it, by huge back but promotions. there's promotions uplift margin offset a an pulling

Operator

Our Robbie next question is of from Ohmes with Bank America.

Unknown Analyst

Hi. This is [ Mattie Chick ] on Ohmes. for Robbie

said call like Are out Cyber about one categories compared Monday? your concentrated to strongest ever. there be of to big events you expecting talk performed Friday, Black for around well looked Black how first, the that are your you Friday And can expectations? to You holiday Just Black Friday? any buying

Steven Lawrence

Yes.

patterns. shopping the discounts. run. I as came and the one saw said the We on we've And events our What get will as this to like is wait moderate then, I I kind So performance. you, spending and the remarks, said year category terms and prepared November, tell going in I'm to was we early in granular of is the of in event this of kind not ever feels a of October too best for pre-pandemic customer, return what call,

So sense it give being good said, lot you a was. time that before of can That how Christmas. there's of still a

But day between part that gives of X Christmas. make into before the you came this weeks continue early to early there's year, Thanksgiving Christmas. call. out the about event as know, about excited X and we've we're extra that so, That seen still got and way And this And We it's momentum too X that the of weekend. week. us extra

that And this get at week strong. last creeps we that after a bit point, do really lull expect be expect a there little we past week. in will so, be we some to of And

the around of their So, the will yes, these seen aggregating continue. customer behavior think we've we year all key shopping moments happen that

Fortunately, think for we've of of ahead we've prepared got this. the the biggest really ourselves us, moment and year I

in season and I cadence shop. have is all prepped constructed been inventory of about think customer the the thoughtful to really Our best take our how out and cadence. been marketing to to advantage there shape And a it's be holiday great year. who's really we're in well willing promotional we've our and We've

Unknown Analyst

were you to trends wanted That's ask expect helpful. continue also or do through any you behavior? momentum seeing I ammo and And saw business. hunt just question in hunt stock XQ? the to a And XQ? you What up Are the on surge the

Steven Lawrence

We quarter, talked one of think, certainly remarks. of the Through in challenged first Definitely, this about little -- comps. the got we're single-digits of imply the the track firearms a been down kind bit that mid-to-high end our in It the first it definitely feels -- if in I Yes. quarter, in year, would more trend. half was towards to through down, like businesses. and was the you QX, it the starting We has the it performed of business prepared it the in mid-teens. better both which of lap ammo. better some And softer it half the got categories it than major

you is belief and starting that the we will and business from forward. and point this that, is certainly like about lapping start hope lot we're talked our remember, normalized. stabilize through a And year activities of It feels get last happened to surge the business more pandemic. to different If a those, lot that

Earl Ford

warmer there than Mattie, is, I'd a little was one thing it bit add average.

ready likes starting gotten that to to season outside more. his that prep little And we're now and amplification. cooler for a little here, so, hunter deer get see get And that activities on didn't and a with that lease mess turn that see it's

Operator

next Our question Anthony Markets. comes from Loop with Capital Chukumba

Anthony Chukumba

of Just wanted come update newness. about Shadow the have OOFOS guys Birkenstocks the product know and Bogg some some been like and to expanded recently in sandals and get new you an Bags recovery of on the and I that have products Systems. been excited have

update wanted So you I there. if any just see to have

Steven Lawrence

towards Certainly, the we've bit it you. year, what couple customer seen of newness. listed that and about a this talked Well, gravitating is Thank Anthony. we you a them, little

are all time. that that a really you being talked so really product We've holiday. the in L.L.Bean, and for So there Other holiday. grilling think addition positioned our There's We us. really the continues kind into And that fueled this seen weight that is that our holiday. just and trend heavier of last well be call right addition about so excited continue flat strong the were in categories in areas, Blackstone being them our fall, the assortments strong. we're by talked category great outdoor this talked categories for That now to we that about certainly we business for about for products, a of it, about grilling. in is right when you getting to about weather to

So we're newness generally, us. board, for across excited about that. the working is But, yes,

also You out working. called the there's that brands, out several other there of are brands and

Anthony Chukumba

newness. Any potentially on on just And [indiscernible] quick one getting footwear follow-up the update terms it. in Got for business? of

Steven Lawrence

this is the not our plans point, year. At next in in it

on access the in businesses and a brand road Adidas you with being really well we've well Brooks We got them at and footwear. with Crocs like as We've well on in new as continue for across Strong mentioned. us. But got doing to doing who's brands. those HEYDUDE that lineup with us. doing talk really Under to point, with biggest brands this our like premier Birkenstock really not for a position for Armour, getting footwear. company, brands said, the well our best us. to total That brands Nike, work it's map. them

brands successful those. So on the have being with with we and we're our very that focused and goal winning is what

Operator

Chris next with comes JPMorgan. Our from Horvers question

Christopher Horvers

like for level? with that you that Are you're the on about XXXX? you It extra And Are anything question there get we my think that the expecting at quarter, the to helpful. the of on is of of day seems you how that much you would as guidance guess, October Series? Is contemplate about down to helped quarter-to-date? So X%. you quarter-to-date. trending a can late bracketing what's be you Rangers-Astros World as in Anything strength something surge think to about the you that? saw that share fourth by do the that was end really to I that need back half we going and look and line

Steven Lawrence

embedded I'll it negative inferences we positive first. us And more actually not, you seen I'll quarter-to-date Yes, it commentary the of a of second performance than refer part is that.In answer Rangers, The or gave. that a terms and November the the to was and guidance Friday, we've the Astros to us. Black make to in from believe back can you you I around gave versus

and our relative business at and is Astros look store mean of percentage you what a If smaller. to the as the the Rangers Rangers, our count business license

actually the So our early the the month. year a Astros to in World with negative was lapping trend sales Rangers Series last

Christopher Horvers

an hunt And overall trend it. about as of it's Got you been the indicator in think such business, the the business. really

big you of weather. rifle start deer X talked the about obviously for in think shift season Carl, of in event. November a You the Texas, some about

what months, bottoming? As confident of just to the saw that sort what you back what's it here's is say, you Like August? cold, let's blamed past you you the focus I spoke that, and actually your started when it's hey, over, peel season business to got in earlier. last from on, Because weather like, different are X the easy degree happened time is how confidence the us guess, and of that and how

Steven Lawrence

Yes.

you the cyclical fairly starting had. impacted other events it believe gives business those, shared we a becoming we in predictable is What that businesses that it's has is last tell is and external seeing is volume what confidence sometimes of we always call, I to also driven which kind a would a this we're what think right more little the you of the us and basis. is by business. level I out with bit weekly now It on some been, so is by maybe

were ammo firearms through year, The got If cadence. cadence. into And this events. you as spikes has we pretty driven business into huge has the settled year, there external in pretty by last go a a back, normal on settled a normal basis weekly

experiencing in this last negative wasn't So business. about year's the much the fluctuation as in business really, the year's comps in we're fluctuation as

said, get and last down confidence being by bit, and die quite that beyond, little and that's it's that ups starts the a QX us kind some a into business noise to bit. but is it's out the to year driven in external the downs, starting stabilizing. we gives any of have That As factors, to right? going that's level what It's like

Operator

Wintermantel next with Our Oliver from ISI. is Evercore question

Oliver Wintermantel

there cadence I the and question bit add you a you maybe until learned bit EBITDA? had you're on X-wall when prepared legacy stores the remarks. -- a of mentioned a your what maybe then, maturity? little in opening new you markets about the markets Could on And expand little

Steven Lawrence

second. I'll tackle first the I'll Yes, part. Carl let tackle the

population new last to existing that new We call, the more we learnings This X year tested the we versus geography were and So on store we a new were of they're called lot from this different heavily suburban our beating that we a a we're year's kind ideas. faster X there. stores had would last years this vintages start, markets. or for we're year, a lot in dense some year, of new at put or get we out within a to of When seeing, those off out are stores that that the footprint, look we while, of you the core plans a surpassing stores. and our do opened this we've of much where year. had and XX the were different urban, years how two last into more do population. testing weighted testing I openings. applied lot markets, We you, tell now We up stores a year, to more stores

side, historical a at slower. that's maybe the even in 'XX tricky is a Midwest, market, the Northern a Indiana we prior the pandemic years. ramps, also stores we opened in little and later maybe effect and into as little But On some right, look we or when out flip and one new go the newer bit some in of them, back go the have from starting in things Illinois, of the of

what see that like. we're before looks So ramps go and look at to curve trying that to back

You're seeing those ramp. probably a have slower

give just so, we're ramp give that. as around seeing and guidance, around give better call guys of better to we'll give a you how little into you, certainly, And we we idea get these XXXX new hopefully, wanted and that color you to out a some guidance And that. stores

Earl Ford

EBITDA. the take Yes. And I'll

the about, some saw had higher rates EBITDA We've to year to talked as I awareness to brand from a customer of within local markets new little states, done isn't reiterate FY about, of still committed positive even into did the March. those in things The know a bit in there's went things, 'XX -- a brand tested our other more out X X a that more lot. new where for in I'll get commentary historically that things, of that to here. coming Feel And We've lot that a talked even are to X, I 'XX. high. and before like invest hurdle are were Steve update we markets our a marketing learned as versus we awareness, as some what where company. retrofits think, EBITDA cohort perspective similar with high lot learnings. talked just as XX%, Tried about, long first a build-to-suits in we'll new us. Steve from you FY year a the we for learned ROIC benefiting

Steven Lawrence

Carl's things faster applied point point, we is because too learnings. ] 'XX seeing [ I Yes. cycling one the we're the a left off vintage To at those of get out end actually the to

of Friday, actually some best over these what's interesting our some So really Black markets. is were markets, of newer

little of lot tried it a maybe us the people through and bit. that starting gives brand break confidence who before, are a to trying hadn't that is So, that

Oliver Wintermantel

in was quarter to -- to million follow-up. There cadence? store openings had that of like openings CapEx the the one It I CapEx year's store reduction million. cadence just the you previous question about stays $XXX reduction next fourth a same. are the signaling something $XXX in Is about looks

Earl Ford

pulled capital we No, out, our to out, little chain new discretionary to talked bit to efficient. has do did kind not discretionary standpoint, initiatives reiterate anything at about. CapEx of with that. those and revised our I'm there's the just been we of line expense I'm refine It's at lower. EPS. we we the like stores, on we've supply commitment we all. any kind a with pulled been getting just to when -- data, This omnichannel, of From coming guidance, to that guidance going willing we're year. a X range, It's has do any customer none pull-down that just closer in top our towards the of end more

Operator

Our comes from Daniel Imbro question Stephens. next with

Joe Enderlin

Daniel. Enderlin is This for on Joe

you last the on are Just kind those could the early XXXX question to from think the within one on stores? there, taking XXXX what additional you're vintage learnings the you any give of color driving most improvement piggybacking that

Steven Lawrence

need vintages brand there's plan half several. Yes. little say in We're more terms more went the hit back marketing make. heritage probably performance up one. how looking And a distortion that stronger loaded. more been We and drive with there's both that at I in on new spend bit more we're markets, The a new markets can in last open in less have a we in little markets. in in that would spring. of were probably Carl the seeing We heritage little stores X stores to awareness. bit new the a to

year think moving to the is the more right first we half the do. thing of into So

going the markets us slowly start existing improved strategy. a have balance better and So across to balance markets, better see new years, having moving to better a localization you're a having between

in We done in looking X learnings. more at these our it, strategy. years having terms down it up we we work new found we're and even Then, we thought even market, gave more even opened Florida, But an about do best probably A+ being and assortment it localization or as we're of we've as saltwater giving we we're X the of fishing, than over to in lot of store we're that opening need were think doing. the a some of I markets, our a smarter past assortment.

So the the stores assortment, to then apply A++ Coast built Gulf an going all going and to Florida to that on use we're now we forward. that opened we

applying each better, the forward. is the we how one I store. better one So across and next. can it's we tell across move inventory taking the learnings broad-based iterative across and an marketing, and getting as across our each operations, that process. from We're It's you that's merchandising, to expectation just

Joe Enderlin

Got it. That's helpful.

cold this as that you in to all? across industry. Just follow-up, think seemed be in sales how any of warmer initial fall at a look weather at the you XQ made influence the weather in Does to influence sales Do opportunity extent? deferral XQ XQ up items could

Steven Lawrence

question is gets big et the cetera. how if -- That's Yes. cold, it cold, stays long it

we're the think ago things a of it candidly, it inventories time. control, that this better is than happy that under one I are about right? maybe year the feels our is today And was place at a like industry in

or well still We've elevate so, promotions our we control I with an And little address they bit But on pandemic. business that deal think big to don't was obviously, going Friday than return have that also we're forecast seem increased we a but into we're pre built think missed. promotions forward. of moving Black I inventory don't But over got, overhang have were where either. a and to of within lower saw counting

Earl Ford

intra-quarter be have thing normalization, QX, and where is Yes. And that and buying about bought it there they supply QX being might they were but not because chain it the it might might a only there. would I worried add be early been gift holiday between it parents

position, our stock think that we're more at confident I the least is frequently. at in be going to inventory looking consumer

think that have closer of third buying confidence yesteryear, stuff in the have so, someone quarter in. a parent more and will that may some that occurred And I or

Steven Lawrence

year-over-year, warm, I we been little sell it the Generally, QX geography, consistent is our our It In at occasionally cold wildcard, think and QX, of usually our and October. when a our products. business, a in gets geography snap colder that's you it's be when look right? fairly in seasonal bit. a bulk helps out candidly, can get

true year. see going I to that think so, we're And same pattern this hold

Operator

comes Gutman Morgan with from question next Stanley. Our Simeon

Jacquelyn Sussman

is Simeon. This Sussman on Jackie for

gross XX.X% I shrink prepared throughout you the are anything in for quarter, of has helpful. think you remarks, to quarter? on shrink. QX-to-date that How prior your margin sequentially call things evolved Just to mentioned quarters? How the in really would terms handling it And getting relative better? Are be out on the

Earl Ford

the Yes, a We was good as question. discussion Jackie, it issue. quarter. that's Shrink a see of topic second big an in still

freight, We third the last basis in muting from this talked we -- do the a points year-round physical to quarter. -- inventory. about shrink don't was shrink little the talked some of bit I is when XX year-round year And play. think about tailwinds in of up Our rate do quarter. we at Look, I last the

were we in shrink basis quarter last up see third in started to the year. points year. So third We quarter of shrink in XX pop of the last

of on We've just as made on law that aids externally done partnerships to through of the in of better technology this into So things this associated way what the That we're tests with us solution in prevention to the subsequent that. team. the react the investments strong some help analytics we year. side. got got to investments a top It's We've local enforcement. and bit better on quicker.I'll second kind both too earlier on beginning detail and last made patterns, I is detection began in first and an really as quicker. of it little with think basis doing. walk quarter much see than really points We've and We've of quarter rollouts well than third read we're number side internal internally XX the without because the quarter trajectory. But getting maybe do a it's doing

lastly, of things the they appreciate. from federal they do them there the detection those we participation the here, kind good have a negative we discussions to want customer We've happen, the And we saw a this side, on lock don't lot. of experience. we and like don't to we crime the federal to that we all these We like standpoint, rings organized seeing That don't Houston about wasn't help busts So, of one long-running can talked of tools can was and really over area. that as But up our like want we test with, aid thing them, feel led in in ORC sort learn I a we doing. a of couple much about a that We've earlier. and COVID, seen were our local product. we're that seeing. what

the That customer they use with bats. bats. is premium turning some we test a make business some there to next we've equipment button peg with lot done want expensive sense. some and learns a is We that and So baseball on for we sure where to the the that glove, made might of well lock AXXXX put an customer for right that, in. baseball of so And those specifically the when associated come inventory call

up our and rate was shrink of quarter. problem, So, we're it's But doing. problem. things that basis a points big It's what mix nationwide a is XX retail-wide this

Steven Lawrence

a are Yes. help navigating against. people staff and make that and helping our around. something we've problem that the we've I'll that's people do these the been been just is was fighting in committed sure because, that this that's trends we've Probably of customers, got of that can a to to I And Carl as to, been shrink are is one who some been emphasize combat there he's out what think have I things who said. one everybody point best it is facing, think embedded right, stores help we

Jacquelyn Sussman

staffing start to pressure we in your that in wages holiday quarter it. about Got as Super the helpful. potential SG&A trends? any are or pre-COVID hours? How on season, are labor you thinking just seeing terms stores, And spend speaking of the of relative you

Steven Lawrence

hourly staffed. keeping We Yes. of good help increases. We're feel wages doing you feel they terms like if are pre-pandemic, appropriately wages like we've for up were look that We we're really the pace, people out Certainly, a getting not really everybody. not job We've maybe where trouble having energized little a a our are of pre-pandemic. definitely, yes, pre-COVID, But versus versus there. team if better at got candidly. any of they're up in done good

Operator

Our Basham next question Wedbush is with from Securities. Seth

Nathan Friedman

This is for Nathan Seth. Friedman on

But higher within Is kind And just year-over-year you what Any know average mentioned more be of mentioned your evidence this in higher of would trending here trade-down ticket any think I you that that promotional trends there seeing. curious clearance. color categories? and you're was some being quarter. I like having your appreciated.

Steven Lawrence

question. the start with I'll down trade

talked a we We terms haven't the of of bit was into little from last on a we quarter, saw lower seen thought that's trip one -- in trade-down little year -- our consumer end lower consolidation. maybe last call the retailer last bit of things end we a quarter's about

We any Conversely, also haven't into we us. seen quarter. retailers other we seen trade-down, that this think, haven't from

things assortment. our So building out I I really said, gaining necessarily being one a X years helping our we're better, think or X us the job don't of trade-down. end we've good That done losing best customers. to don't with that over we're is, regards think is think I the any past of in that

our the allows really within to store. that trade what customer do So to is down

a just we out bat, $XXX for and Marucci to options $XXX So other if end or versus want the doesn't Carl having go to retailer. another bats about, gloves customer to to spend building was a to that talking them higher have trade for

our quarter. basically more average average challenge ticket biggest think we AUR, front.In that ticket, that's was So for us was up flattish, terms on traffic. the The helping of slightly

We is AUR We a going into And think baked continue continue digits. We that that, have will continue. over that that not to period. QX. going guidance. anticipate It's into and low-single we growth promotional It's year-over-year think to that's the to multiyear we our see impact huge. activity

Nathan Friedman

tougher your -- basis And you as of quarter some associated takes and chain your that vendor margin thinking quarter. second, fourth XX shrink and slowing suggest of my allowances be these second that in down offset question One, benefits chain supply is, would And tailwind comparisons points puts chain are with may start is about as you things with I mentioned that the that well? tougher this comparisons. supply sort to true? supply and merchandise lap guess how here you tougher

Earl Ford

Yes, Nathan. it's a question, good

for quarter this talked our on really bit We So about -- so quarter, until first the there. freight a of we first we'll second of point third benefit little the each was year. basis basis and have to tailwind us, a it's didn't standpoint lessening see XX start from that about in quarter XX-Q. detail in freight and around about quarter, an more XX benefit But points

But of going third a the basis point quarter, year. freight but really we points XXs weight full forecast in XX we're that to in within So in that kind quarter. the just quarter quarter quarter this a savings drop-off, expecting or in the think we to standpoint put fourth basis We're tailwind, third beginning see the you're I didn't it's start that tailwinds -- XX there. starting see it's guidance freight first and But to from we second out expecting of the lessen. what to with of from beginning until the tailwinds first

Operator

Matt Hodges	executive
Steven Lawrence	executive
Earl Ford	executive
Brian Nagel	analyst
Michael Lasser	analyst
Frederick Gaertner	analyst
Anthony Chukumba	analyst
Christopher Horvers	analyst
Oliver Wintermantel	analyst
Joe Enderlin	analyst
Jacquelyn Sussman	analyst
Nathan Friedman	analyst
Cristina Fernandez	analyst

Academy Sports and Outdoors (ASO) 30 Nov 232024 Q3 Earnings call transcript