How Does Academy Sports and Outdoors Company Work?

The company's operations are primarily centered around its large-format brick-and-mortar stores, with 95% of sales fulfilled in these locations. These stores are strategically situated in the Southern, Southeastern, and Midwestern U.S., acting as the main sales channels.

Academy enhances its value proposition by offering free in-store services. These include grill and bike assembly, scope mounting, bore sighting, line winding/spooling, and propane exchange, alongside the convenience of purchasing hunting and fishing licenses.

Complementing its physical presence, the company operates an e-commerce platform that provides nationwide reach. This digital channel is crucial for its omnichannel strategy, evidenced by a 10.2% increase in e-commerce sales in Q1 fiscal 2025.

Integral to its operations are robust supply chain and distribution networks. Investments in warehouse management platforms and new leadership, like the chief supply chain officer appointed in early 2024, aim to boost omnichannel capabilities and reduce liabilities.

Academy Sports + Outdoors is actively expanding its physical footprint. Following the opening of 16 new stores in fiscal 2024, reaching 298 locations, the company plans to introduce 20 to 25 new stores in fiscal 2025. This expansion will extend its reach into states like Pennsylvania and Maryland, aiming for a total of over 300 stores across 21 states.

To counter economic headwinds and inflationary pressures, Academy has prioritized value and supply chain resilience. Efforts include diversifying its sourcing to reduce direct cost exposure to China, aiming for a reduction from approximately 9% to 6% by the end of fiscal 2025. Investments in a new warehouse management system and a partnership with DoorDash for on-demand delivery are also key operational enhancements.

A core element of Academy's competitive edge is its value-based product assortment, featuring a significant number of private label brands. This strategy allows the company to offer quality merchandise at competitive prices, appealing to a broad customer base seeking value in sporting goods and outdoor equipment.

The company is enhancing its omnichannel capabilities by improving its mobile application and online checkout processes, alongside launching a loyalty program to boost customer engagement. The recent introduction of the Jordan Brand in 145 stores and online in Q1 2025 signifies a strategic move to align with popular consumer trends and expand its brand portfolio.

Academy Sports + Outdoors operates as a full-line retailer, distinguishing itself through value pricing and a broad assortment of merchandise. It competes with national retailers such as Dick's Sporting Goods, as well as mass merchandisers like Walmart, Target, and online giant Amazon. The company's ongoing store expansion indicates a strategy to capture greater market share in the sporting goods and outdoor recreation industry.

The company faces significant risks from macroeconomic factors, including inflation, which can impact consumer spending on discretionary items. Changes in trade policies and potential tariffs also pose a threat to its supply chain and cost structure. These headwinds were reflected in a slight dip in net sales and comparable sales during Q1 fiscal 2025.

Academy Sports + Outdoors is focused on several growth pillars: expanding its physical store footprint, increasing its omnichannel sales capabilities, leveraging customer data, and enhancing its supply chain. The company plans to open between 20 and 25 new stores in fiscal 2025 and aims for e-commerce to represent 15% of its total revenue.

For fiscal 2025, the company projects net sales between $5.97 billion and $6.27 billion, with adjusted earnings per share anticipated to be between $5.45 and $6.25. Academy's strategy emphasizes maintaining its position as a value-oriented retailer to gain market share, supported by strong free cash flow generation for growth and shareholder returns.