Q4 2024 Academy Sports & Outdoors Inc Earnings Call
Steve Lawrence: Participating on today's call are Steve Lawrence, Chief Executive Officer, and Carl <unk>, Chief Financial Officer.
Speaker Change: As a reminder, today's earnings release and the comments made by management. During this call include forward looking statements. These.
Speaker Change: These statements are subject to risks and uncertainties that could cause our actual results to differ materially from our expectations and projections.
Speaker Change: These risks and uncertainties include but are not limited to the factors identified in the earnings release and in our most recent 10-K and 10-Q filings.
Speaker Change: <unk> undertakes no obligation to revise any forward looking statements.
Speaker Change: Today's remarks also refer to certain non-GAAP financial measures reconciliations to the most comparable GAAP measures are included in today's earnings release, which is available at investors <unk> Academy Dotcom.
Speaker Change: This morning, we will review our financial results for the fourth quarter and full year of fiscal 2024 provide an update on our strategic initiatives and discuss our outlook for the year.
Our guidance for the full year fiscal 2025. After we conclude our prepared remarks there'll be time for questions out there yet.
Speaker Change: I'll turn the call over to our CEO, Steve Lawrence.
Speaker Change: Thanks, Dan Good morning to everyone and thank you for joining us today.
Speaker Change: We finished 2024 with the business trending in the right direction.
Speaker Change: Net sales for the quarter were $1 $68 billion, which represented a six 6% decline as most of you know we're up against the 50 <unk> week from last year, which means we're comparing 13 weeks of sales this year versus 14 weeks last year.
Speaker Change: Throughout my commentary any comparisons that I make the last year will remove the extra week and compare 13 weeks this year versus the comparable 13 week time period for last year.
Speaker Change: Looking at it this way Q4 net sales were flat in total and excluding the contributions of our new stores comp sales ran a 3% decrease.
Speaker Change: This represented a sequential improvement versus Q3 and first half trends.
Speaker Change: These results also exceeded our midpoint guidance for both net sales and adjusted earnings per share in the fourth quarter fight navigating a compressed holiday calendar. It was coupled with consumer spending power remain constrained throughout the holiday season.
Speaker Change: Now I'd like to give you a little color around how the quarter played out.
Speaker Change: During our last call. We mentioned the first two weeks of November were soft, although we saw a strong rebound later in the month, we had our largest black Friday sales in company history.
Speaker Change: This momentum continued throughout the remainder of the holiday season and into the first half of January.
Speaker Change: Team did a great job of thoughtfully planning out promotions, while also ensuring we're in stock and at the right price on the key items in categories that over index during holiday each year.
Speaker Change: As a result of this work every division ran a positive comp sales gain in the month of December.
Speaker Change: We did see a softening in the trend the last two weeks of the quarter, which we would attribute the winter storms across our footprint, which suppress sales.
Speaker Change: Looking at the fourth quarter results by Division outdoor was our best performing category posting total net sales growth of plus 2% versus last year.
Speaker Change: We saw solid increases across our hunting fishing and camping business.
Speaker Change: The national brands, such as Yeti and Stanley drove the giftable business for us or private brands, such as monarch and Redfield couple of strong value messaging.
Speaker Change: Apparel was our second best performing category with net sales down 1% to last year.
Speaker Change: In our last call. We mentioned that this division was one of our weaker performers in Q3, driven by warmer temps that persisted throughout the quarter, which suppressed early salesman fault product.
Speaker Change: We saw a significant rebound in this business during holiday driven by youth apparel.
Speaker Change: <unk> and workwear.
Speaker Change: In national brands, such as Nike and Carhartt had strong performance for us during holiday.
Speaker Change: Sports and recreation net sales also improved versus our prior year to date trend with Q4, finishing down 1%.
Speaker Change: We had a well thought out promotional cadence and key giftable categories, such as kids bikes grills and write offs that really resonated with our consumers.
Speaker Change: It was also good to see our fitness business improved based on our focus on lower AUR giftable items.
Speaker Change: We also saw improvement in our footwear business, which had net sales down 2% for the quarter driven by key categories, such as men's athletic and work footwear.
From a brand perspective, Essex, new balancing crocs, all had strong performance for us during holiday.
Speaker Change: Cutting across all of the divisions Who's a strong growth that we saw in our portfolio of private brands.
Speaker Change: These brands represent the value end of our assortment and our customers clearly sought out this product during the fourth quarter as they look to stretch their gift buying budget.
Speaker Change: Turning to margin in the fourth quarter, we reported a gross margin rate of 32, 2% a decline of 110 basis points versus last year.
On a shifted 13 week basis, our merchandize margins were up 10 basis points.
Speaker Change: This was a little lower than we'd planned with the main drivers being an increased penetration of hard lines of business to the total coupled with some additional markdown actions. We took at the end of the quarter to ensure a more aggressive seasonal transition in apparel as we head into the spring season.
Speaker Change: It's cleaner transition is important as we free up and allocate the additional space needed to aggressively launch the Jordan brand in Q1 of 2025.
Speaker Change: More on that in a minute.
Speaker Change: Pulling back to look at the full year, we faced several challenges in 2024, I believe that the team effectively navigated through them, while simultaneously putting in place the building blocks for future growth through continued investment in the business.
Speaker Change: We made solid progress across our key long range growth initiatives in 2024, and we believe that these investments will better position us to drive top line sales and expand our market share as we move forward.
Speaker Change: Key accomplishments last year included.
Speaker Change: During the year, we opened up 16, New Academy stores, expanding our presence to 19 states this particularly.
Speaker Change: Exciting to see the stores, we opened in the back half of the year, which was the first finished only incorporate a refined site selection model for all trending well ahead of our plans.
Speaker Change: An example of this is our meridian, Mississippi store, which opened in Q4 of 2024.
Speaker Change: We classify the store as a small to mid sized market with a draw of roughly 120000 customers, who did not have a lot of alternatives to shop for sports and outdoors.
Speaker Change: When you look at the population. They also over index with the always game family, who loves to hunt fish and play sports.
Speaker Change: While still early in its lifecycle. This store is significantly outperforming its plan is tracking towards the high end of our year, one expectations for new stores of $12 million to $16 million and even more exciting is picked up roughly 25% for the sports and outdoor traffic share in this market.
Speaker Change: At the same time, the 2022 vintage of stores, which moved into our comp base last year outperformed our existing store base by running a positive comp.
Speaker Change: As we head into the new year. The 2023 vintage will now start also feeding into our comp store base, which we believe should help strengthen the tailwind at our new stores provide us.
Speaker Change: We also rolled out our new warehouse management system to our Georgia distribution facility.
Speaker Change: While the integration presented its challenges improving the productivity across our supply chain is a critical enabler to our long term expansion plans were.
Speaker Change: We're mostly past the integration challenges and believe we should see a tailwind from this facility moving forward.
Speaker Change: While we are still in early innings on our customer journey, we've made tremendous progress last year, including a massive identity resolution project and almost doubled our addressable customer count at the same time, we launched my Academy rewards enrolled over 11 million customers during the year.
Speaker Change: Over the holidays, we saw strong uplift in the spend from these loyalty numbers. We believe this should also be an additional tailwind for us moving forward.
Speaker Change: Finally.
Speaker Change: We drove continued growth in our private brands, which for 2024 came in at roughly 23% of total net sales versus 22% in fiscal 'twenty three.
Speaker Change: We expect this growth to carry forward into 2025, as our core customer continues to gravitate towards value.
Speaker Change: Our consistent operational execution in 2024 also drove strong free cash flow for the 20 <unk> consecutive quarter.
This strong cash generation continues to support our growth initiatives and also highlights the health of our business model.
Speaker Change: In 2024, we strategically invested an additional $140 million due to our growth initiatives and returned over $396 million to shareholders through dividends and share repurchases.
Speaker Change: These investments are expected to yield strong returns for years to come.
Speaker Change: Looking ahead to 2025, we're focused on both near term goals and long term objectives.
Speaker Change: As we've stated before we have three major growth engines for our business.
Speaker Change: I'd like to now walk you through each one of them and highlight the opportunity that we see ahead of us this year.
Speaker Change: First new stores.
Speaker Change: Our plan is to open up 20% to 25 new stores this year.
Speaker Change: Early this month, we opened our first three two in Pennsylvania, and New York and East Harrisburg, along with one in Hagerstown, Maryland.
Speaker Change: These stores took us to a couple of key milestones as we now have over 300 stores and have expanded our footprint from 1921 states.
Speaker Change: More importantly, it's the first time over the past four years, where we have opened up three stores in close geographic proximity to each other on a single weekend.
Speaker Change: This allowed us to better leverage our marketing assets in order to more broadly generate excitement and traffic for these grand openings.
Speaker Change: If you look on our Investor site. After this call we posted some content that was created during the Grand opening at York P, a which mark door number 300 for us.
Speaker Change: Another key element of this strategy is to create better balance in our store openings across the year as well as by geography.
Speaker Change: We've made good progress on both fronts with roughly half of our new stores being in sales to our existing footprint and the other half coming in new markets.
Speaker Change: Well not quite at a 50 50 mix we plan to have roughly one third of the new stores opening in the first half of the year versus prior years, where store openings primarily back half weighted.
Speaker Change: As we've covered before most of these stores will be located in suburbs and Exurbs of larger population centers, along with mid size markets, both of which are target rich with our core customer.
Speaker Change: One of our key long term growth drivers is getting our new store flywheel going with each successive vintage adding to the momentum.
Speaker Change: As we mentioned previously the nine stores for the 2022 vintage with the first finished in our comp base last year. These stores in aggregate comp positive for the full year outperforming our existing store base.
Speaker Change: We expect to continue to benefit from this in 2025 as we now add the 14, new stores that we opened up in 2023 to the toll.
Speaker Change: By the end of the year, we'll also start seeing several of the 2020 for vantage contributing to comps as well.
Speaker Change: Shifting to our dot com business, we remain bullish on the opportunities here.
Speaker Change: We did not make as much progress on this front as we hoped in 2024 with our penetration running flat versus the prior year at roughly 11%.
Speaker Change: As we head into 2025 gave a three pronged attack to grow sales.
Speaker Change: First we're going through a deep dive into safe fundamentals, prioritizing and intuitive inspiring and engaging online experience.
Speaker Change: The team is focused on dramatically improving the internal search navigation on our site in order to offer a more enhanced personalized experience.
Speaker Change: We're also leveraging RFID more aggressively to improve inventory availability for bogus as well as to improve fulfillment rates on ship to home orders that originate from our stores more on that in a minute.
Speaker Change: The second component of this growth pillar will be a continued expansion of the endless aisle concept striving significant SKU growth online, particularly in categories, such as firearms footwear and licensed apparel.
Speaker Change: Finally, we plan to continue to expand fulfillment options and shorten our time to fill orders as we continue to focus on reducing friction and improving customer experience and our omnichannel ecosystem.
Speaker Change: The introduction of same day delivery last year through both the door dasher happen our own site of this tap into customers that previously would not have shopped with us because we lack this capability.
Speaker Change: This was particularly helpful. The last four to five days heading into Christmas, where traditional shipping methods would not have gotten some items into customers' hands in time for holiday.
Speaker Change: Moving over to the third leg of our growth strategy for laser focused on improving the performance and productivity of our existing store base.
Speaker Change: We know that strong execution on this front is foundational to moving back to comp store growth now.
Speaker Change: Now I'd like to run through the key drivers of the strategy that we plan to bring to bear in 2025.
Speaker Change: First.
Speaker Change: The customer has repeatedly demonstrated over the past couple of years, a strong appetite for newness and our plan is to dramatically accelerate the flow of new items and brands in 2025.
Speaker Change: We're expanding our partnership with Nike and in April of this year, we will do our biggest new brand launch in the company's history with the introduction of Jordan brand into a 145 stores and online.
Speaker Change: We plan to launch the brand in late April with shops in men's women's and kids and integrate apparel shoes and accessories into across merchandise shop.
Speaker Change: Our focus will be on sport product with the goal of extending the reach of the brand into underserved markets.
Speaker Change: Historically this has been one of the most requested brands in both our stores and online. We're excited that we can now bring the Jordan brand the Academy customer.
Speaker Change: If you look at our Investor site. After this call you'll see our first commercial for Jordan that teases for launch.
Speaker Change: In addition to Jordan, we're increasing our investments with Nike and expanding our assortments into lifestyle and performance running shoes, coupled with additional fashion apparel.
Speaker Change: To support both the addition of the Jordan brand and the expansion of Nike Assortments, we're freeing up space by downsizing and or eliminating underperforming brands and categories.
Speaker Change: Other brand additions for 2025 include key national brands, such as converse, which landed in all sorts of just after holiday and is off to a fast start along with Osprey and backpacks.
Speaker Change: We're also taking brands that perform well in limited doors last year, expanding them out deeper into the chain.
Speaker Change: Customers will see brands like Birla Bowl.
Speaker Change: Been incubating for the past 24 months and into all doors.
Speaker Change: Other brands that we'll see an acceleration in door count include more established brands like area and birkenstock, along with emerging brands, such as Waggling golf apparel Ninja and coolers and grills.
Speaker Change: Another key focus for us is to ensure that we're leaning into our position as the value leader in our space.
Speaker Change: The macroeconomic data, we see heading into 2025 indicates that the lower to middle income consumer is under pressure and our goal remains to ensure that our customers get the best prices from us on a daily basis.
Speaker Change: Our plan is to hold prices across most of the large key items across our assortment to deliver deep value at an outstanding quality to our customers.
Speaker Change: As we navigate through the increased tariffs that have been levied for using a regular price optimization tool coupled with a portfolio approach to help recommend places, where we can offset cost increases and mitigate the margin impact while not raising prices on the big key items that drive large amounts of traffic and volume for the company.
Speaker Change: Our portfolio of proprietary brands remains one of the main ways, we deliver on value. We also plan to grow private brands at a faster pace than the average over the next year through new brand extensions.
Speaker Change: One key focus will be growing our Brazos brand, which has traditionally been focused on work boots with an expanded offering of year round work, where apparel strong values relative to national brand alternatives.
Speaker Change: We also recently launched an exclusive Jacob Wheeler aligned with the Magellan outdoors.
Speaker Change: For those of you not familiar with Jacobs. He is the goat a bass fishing, it's been an outstanding partner for us for many years.
Speaker Change: The product will be positioned at slightly higher prices in our current Magellan outdoors assortment.
Speaker Change: He added features and benefits that we built into the line will be in a much sharper price versus similar products in the marketplace.
Speaker Change: The third major driver of productivity in our existing store base is to leverage all the work we've done over the past year on our customer file.
Speaker Change: As I previously mentioned.
Speaker Change: Or my Academy loyalty program over the summer last year.
Speaker Change: Out of the work the team did to enroll over 11 million customers.
Speaker Change: While we're still in the early innings of this initiative, we saw strong engagement with the program over holiday. We expect this to be powerful driver of new customer acquisition and retention moving forward.
Speaker Change: So I'd also call out the work the team has done with our new customer data platform or on improving customer identity resolution.
Speaker Change: Through this work, we've almost doubled our addressable customer file which translates into more targeted communications moving forward.
Speaker Change: At the same time.
Speaker Change: Getting better at leveraging customer insights coming from our CDP and loyalty program helped personalize and improve customer shopping experiences both online and in store.
Speaker Change: The end result of all this work is that we're seeing improvements in both our marketing reach and effectiveness.
Speaker Change: To help fuel this improved marketing efficiency department with a new advertising agency Dara Jesse based out of Boston with deep experience in marketing outdoor brands, such as Yeti and kosta, coupled with helping regional brands such as water Burger in China, we are expanding our reach into new territories.
Speaker Change: We believe their work will help our brand to continue to resonate our core geography, while also helping us build our brand awareness faster as we head into newer markets.
Speaker Change: The first tranche of work as the Jordan introduction, and then you will see a larger fully integrated campaign launch as we head into the summer months, which will lean into our position as a center of fun for all of the always game families. We serve.
Speaker Change: The last driver productivity for snow cover today is around new technology that we plan to roll out into our stores and distribution centers.
Speaker Change: With the continued acceleration in the blending of physical stores with the online business customers continue to raise your expectations from inventory visibility and availability across channels.
Speaker Change: We've been piloting some use cases for RFID over the past couple of years and are now ready to roll it out more broadly.
Speaker Change: <unk> just have handheld scanners sent out to all stores during the first half of the year.
Speaker Change: We use a scanner stuff paid counts weekly on National brands currently RFID tag their product such as Nike under armour Adidas in Colombia.
Speaker Change: Based on our pilots, we expect to see a 20% to 25% improvement in inventory accuracy with RFID.
Speaker Change: We anticipate that this rollout will be a huge unlock our ability to improve conversion both in stores and online.
Speaker Change: We're pairing our RFID expansion with the rollout of new handheld devices for our store associates with all stores being fully rolled out this spring.
Speaker Change: These devices will have integrated point of sale functionality, which will greatly improve our ability to save the sale with a customer who cannot find the item. They are looking for in the store they're currently shopping in.
Speaker Change: We've also invested in the implementation of a new warehouse management system in our distribution centers. It will allow us to improve labor management and continuously evaluate new capabilities.
Speaker Change: Having worked in retail for over 35 years over that time I've encountered several truism instead of keep returning to.
Speaker Change: The one that comes to mind. This morning is that hope is not a plan.
Speaker Change: I know that I covered a lot of ground. This morning, but that was purposeful.
<unk> has been diligently working on a comprehensive multi pronged plan, whose academy back to topline growth in 2025.
Speaker Change: <unk> identified and are aggressively putting in place strategies to support and deliver against each of our growth pillars.
Speaker Change: These tactics have been tested and validated we are excited about what 2025 holds for us.
Speaker Change: Now I'd like to turn it over to our CFO, Carl <unk>, who will give you more color on how Q4 played out for us along with providing guidance for 2025.
Carl: Thank you Steve.
Carl: Fourth quarter net sales of $1 $6 8 billion and comparable sales of negative 3% came in at the high end of our guidance.
Carl: For the 13 weeks ended February one 2025 compared to the 13 weeks ended February three 2024 sales were down 0.2%.
Carl: Our fourth quarter comp transactions declined five 9%, while comp ticket increased by three 1% compared to last year.
Carl: Overall in the fourth quarter Academy generated net income of $133 6 million and diluted earnings per share of $1 89.
Carl: Fourth quarter, adjusted net income, which excludes stock based compensation of $6 million was $139 million or $1 96, and adjusted diluted earnings per share.
Carl: Throughout my following commentary any comparison I make is comparing the fourth quarter and fiscal year 2024 versus the fourth quarter and fiscal year 2023, respectively.
Carl: Gross margin of 32, 2% in the fourth quarter was down 110 basis points versus last year, driven by higher freight and distribution costs during the quarter and lower merchandise margins.
Carl: 90 basis points of the decrease was driven by higher import freight expenses driven by our strategic decision to mitigate potential port strikes and tariff risks as well as elevated distribution costs due to the remaining costs from a third quarter cleanup at the Georgia distribution facility.
Carl: Our SG&A dollars as a percentage of sales increased by 110 basis points, while SG&A in total was down seven $5 million compared to the fourth quarter of last year.
Carl: Excluding the $17 million in expense from the extra week last year fourth quarter, SG&A expenses increased $10 million of which all was related to strategic investments that were partially offset by base expense control.
Carl: Leverage during the quarter was a result of investing in our growth initiatives opening new stores.
Carl: Vesting in the Omnichannel business maturing, our customer data platform and scaling and leveraging our supply chain.
Carl: We remain confident in our continued investment in these areas as part of our long range plan.
Carl: We expect them to be instrumental to growing our business over the long term.
Carl: Q4, total SG&A per store was down modestly after adjusting for the extra week last year.
Carl: The decrease in SG&A per store is driven from our relentless focus on expense control.
Carl: To put our SG&A results into perspective every incremental dollar we spend will be on growth initiatives and we will continue to tighten our core expenses.
Carl: As Steve mentioned earlier on the call. We were pleased with our performance throughout the holiday shopping season, despite challenging weather to start and end the quarter.
Carl: While our total fourth quarter store traffic decreased by low single digits. Our performance during key shopping periods throughout December and the beginning of January are a testament to customers' perception of our compelling value proposition and robust assortment.
Carl: During the month of December traffic growth accelerated by 700 basis points versus our October exit rate.
Carl: Which was supported by our ability to capture customers trading down and becoming more value conscious during the holiday shopping season amidst a continued challenging macro backdrop.
Carl: In December Academy gained roughly 40 basis points of store traffic share among households, earning greater than $100000 of annual income with monthly traffic increasing by mid single digits amongst this customer cohort versus last year.
Carl: This trend continued throughout the month of January as we gained another roughly 20 basis points of store traffic share within this customer demographic.
Carl: Both periods customers in the top quintile of household income drove outsized sales growth of high single digits.
Carl: These data points clearly shows that we're beginning to see an uptick in traffic in our assortment and value is resonating not only with our core customer our customers in the upper income quintiles as well.
Carl: Looking at the balance sheet, we ended the quarter with $289 million in cash.
Carl: Our inventory balance was $1 $3 billion, an increase of nine 6% compared to last year.
Carl: Total inventory units increased by two 6%, which includes an additional 16 stores compared to the end of Q4 2023.
Carl: On a per store basis inventory units were down two 9% and inventory dollars were up three 7%.
Carl: For the full year, we generated $528 million in cash from operations, we invest invest in approximately $200 million back into ourselves.
Carl: Repurchased approximately six 5 million shares for $365 million.
Carl: And paid out $31 million in dividends.
Carl: In 2024 Academy generated approximately $342 million of adjusted free cash flow compared to $330 million in 2023.
Carl: On a per share basis. This represents a year over year increase of approximately 10% versus 2023.
Carl: In terms of capital allocation, our strategy remains focused on executing against three pillars, which are one financial stability.
Carl: Self funding growth initiatives, and three increasing shareholder returns through share repurchases and dividends.
Carl: We believe these priorities will help drive future sales and earnings growth as well as increase shareholder value.
Carl: Fourth quarter dividends paid resulted in a dividend yield of approximately 84 basis points and share repurchases represented a total of 3% of our market cap.
Carl: Combined we have returned a total yield of approximately three 8% to our shareholders in the fourth quarter.
Carl: Following the $91 million of share repurchases in the fourth quarter and subsequent repurchases. We now have approximately $566 million remaining on our repurchase authorization.
Carl: Finally, we are pleased to announce the board recently approved an 18% increase in our dividend, resulting in 13 cents per share payable on April 17th 2024 to stockholders of record as of March 25 2025.
Carl: As I wrap up let me provide a little more detail on our 2025 guidance expectations.
Carl: As mentioned earlier in the call we are in a unique position among retailers with the current growth opportunities in front of our team and we believe our path to returning to sales growth is clear and achievable.
Carl: I'd like to share a few data points and assumptions that influence our 2025 guidance.
Carl: Net sales came in at the high side of guidance during the fourth quarter, but we did see softness in the shoulder months driven by weather and we feel macro uncertainty will persist during 2025.
Carl: In addition, our gross margin rate declines for the full year were primarily driven from disruptions in our supply chain that we expect to become a tailwind throughout 2025.
Carl: While the current macro environment makes it difficult to predict when the external pressures on our business will subside. We believe we have appropriately positioned our merchandise offering.
Carl: Marketing strategy and inventory levels to manage through the current cycle.
Carl: We continue to prudently invest in our business for long term growth and to create value for our shareholders.
Carl: With that said, we are taking a measured view of the sales environment, which assumes a continuation of the consumer behavior. We saw in Q4, coupled with the internal initiatives within our business.
Carl: Our guidance for 2025 is as follows.
Carl: Net sales are expected to range from $6 $1 billion to $6 3 billion with comparable sales of negative 2% to positive 1%.
Carl: Our gross margin rate is expected to range from 34.0% to 34, 5%.
Carl: Contemplated within this guidance is the impact of 210% tariffs placed on China in February and March.
Carl: And the 25% tariff on steel and aluminum.
Carl: As we mentioned on the last call our direct import exposure to China was 10%.
Carl: And as we sit today is under 9% and trending towards 8% as we continue to diversify our sourcing base.
Carl: We have virtually zero exposure to Canada and Mexico.
Carl: We have mitigated the pressure from the announced tariffs.
Carl: And we will continue to work with our vendors and our price optimization teams to ensure we remain a valued leader for our customers.
Carl: GAAP net income is between $375 million and $410 million.
Carl: Adjusted net income, which excludes certain estimated expenses primarily stock based compensation of approximately $25 million is forecasted to range from $400 million to $435 million.
Carl: It is important to note that earnings in the fourth quarter of 2024 included approximately $22 million that we do not anticipate will reoccur in 2025.
Carl: We have provided additional detail in the earnings release, we issued this morning.
Carl: GAAP diluted earnings per share of $5 40 to $5 85, and adjusted diluted earnings per share of $5 75.
Carl: To $6 20.
Carl: The earnings per share estimates are based on a revised share count of 70 million diluted weighted average shares outstanding for the full year.
Carl: These amounts do not include any potential future repurchase activity using our remaining $566 million authorization.
Carl: We also remain confident in the strength of our cash flows and expect to generate between $219 million and $320 million of adjusted free cash flow.
Carl: Including $220 million to $250 million of capital expenditures.
Carl: Looking at the shape of the year, we expect Q1 to be our most challenging quarter from a comp sales and earnings per share perspective, and Q2 to be the strongest.
Carl: The first quarter will be impacted by the opening of five new stores and the cost of the merchandising execution work to launch the Jordan brand in our stores as well as the expansion of Nike.
Carl: The benefits of these investments and our additional internal initiatives will not start to bear fruit until the second quarter. So we also expect the back half of the year to be better than the first half.
Speaker Change: The Delta from the low end to the high end of the annual comp guidance will depend on the growth engines, Steve outlined.
Carl: One <unk>.
Carl: Drive new store growth the 'twenty two through 'twenty four store vintages will continue to be a bigger contributor as they mature.
Carl: To invest in e-commerce to focus on user experience search and fulfillment options.
Carl: Three amp.
Carl: Implement new technologies like RFID, and associate handheld that will increase accuracy speed and conversion.
Carl: <unk> introduced new brands with compelling Assortments like Jordan.
Carl: Converse and Osprey.
Speaker Change: Five grow private brands at a faster pace third new brand extensions like Magellan outdoor pro by Jacob Wheeler.
Speaker Change: And finally grow our my Academy loyalty program to reach more customers.
Speaker Change: We also expect to see continued growth in the upper income Quintiles other consumer as they continue to trade into value.
Speaker Change: To conclude we're cautiously optimistic as we head into 2025 and believe these initiatives and our relentless focus on marching towards positive comps will position us nicely.
Speaker Change: With that we will now open it up for any questions you might have operator, please open the line for questions.
Speaker Change: Thank you the company and we will now open up the call to your questions.
Speaker Change: Ask your question. Please press star one.
Speaker Change: We will pause for a moment to wait for the queue to fill at the end of the question and answer session CEO, Steve Lawrence will make closing comments.
Speaker Change: Thank you. Our first question comes from the line of Anthony <unk> with loop capital. Please proceed with your question.
Anthony: Good morning. Thank you for taking my question a lot of good information shared on the call. So I guess my question was on your gross margin guidance for 2025, specifically I.
Speaker Change: I guess I was surprised.
Anthony: Given the tariff impact that you are.
Anthony: And that to be up 40 basis points at the midpoint. So I guess I was just wondering what we're going to be what are expected to be the drivers of gross margin expansion in 2025. Thank you.
Anthony: Hey, Anthony it's Carl Yeah, I think some of it is recapturing the supply chain headwinds that we experienced in 2024, specifically around the Georgia distribution facility, but also some investments that we made associated with where we're bringing in import freight that was a 30 basis point headwind.
Anthony: In FY 'twenty four if you go beyond that we expect soft lines to penetrate higher in 2025 that will be supported by Jordan and Nike that will not be the only thing but.
Anthony: Soft lines mix and then promotion effectiveness, we've got some tools that we're using on our pricing engine to be a little bit more scientific associated with promo effectiveness and we think all of that taken in <unk>.
Anthony: Together would drive the midpoint guidance range that we put out there.
Anthony: Got it so there's a lot of other great questions on here, so I'll leave it at that thank you.
Anthony: Okay.
Speaker Change: Our next question comes from the line of Christopher <unk> with Jpmorgan. Please proceed with your question.
Thanks, guys and good morning. So my first question is.
Speaker Change: As you think about the consumer the great debate of how much is weather versus how much is uncertainty weighing on the consumer can you can you share what you're seeing sort of.
Speaker Change: Quarter to date, how that makes you think about that whether it's a weather issue versus a consumer and would you expect the first quarter to be below the lower end of the annual comp guide range.
Speaker Change: So it's an interesting question I would tell you that as we talked about in.
Speaker Change: In the prepared remarks, we saw a kind of a softening in the business at the tail end of January we saw that continue into <unk>.
Speaker Change: The start of February and at the time, we were asking ourselves the same question as this weather.
Speaker Change: Or is this you know more macro pullback.
Speaker Change: A couple of things we did we transitioned the floor much more cleanly. This year the spring goods, which we're very happy we did.
Speaker Change: Of course that hit right as the temperatures got really cold at the tail end of January and February but.
Speaker Change: But what we saw as we got past kind of that clearance cycle and the cooler temps as the weather warmed up we've seen the business rebound.
Speaker Change: And stabilize we're pretty happy with the trend we saw it coming out at the end of February and through the first couple of weeks of March obviously, we still have the majority of the quarter still ahead of us from a time period from a volume perspective, but we really like the trend we've seen in the business, which would indicate that while the consumer is out there is still being cautious and we have that modeled into our guidance for this year.
Speaker Change: Hmm.
Speaker Change: We also recognize that some of the strategies, we have in place and the value position. We have in this space thinks it's going to allow us to win this year. So when you think about the year.
Speaker Change: I think we have encompassed in that guidance, a continued softening or softness in the middle income to lower income consumer.
Speaker Change: That being said, we also believe though the initiatives that we have in place whether it's the new brand introductions. The technology Rollouts that we're putting out in stores. The new store growth. We think all those things are going to be things are going to help us counteract some of that softness in the economy and move back to growth as we go through the year from a sequencing.
Speaker Change: Carl said this in his commentary, we expect Q1 to be the most challenged we expect Q2 to be probably the best quarter candidly. The years, we see a lot of these initiatives really kick in I mean, we talked about on the call. The Jordan launch really doesn't happen until the end of April so most of the impact that youre going to see.
Speaker Change: In Q2, we also have five new stores a lot of the technology Rollouts are fully rolled out by the time, we get to father's day and then that's when we start lapping our distribution conversion from last year, we saw kind of a softness in those stores. So all those things lead us to believe that we're going to see Q2 be the best quarter, probably of the year for us and we see the back half of the year would be better than the first half of the year.
Speaker Change: Okay.
Speaker Change: Understood and then on the yes snowing.
Speaker Change: Snow in Houston and Dallas. This is quite quite unusual just think about January and February.
Speaker Change: The as you think about like what's embedded in the combat at sort of a two part question. One is on the new stores you talked about the 2022 vintage Comping positively I guess you know normally.
Speaker Change: Year, one year, two stores comp sort of in the double digit range. So how are you thinking about like how much did they contribute what's your expectation on what new stores contribute to the comps and 25.
Speaker Change: And then related to any commentary on what's embedded for the Nike launch. Thanks, so much.
Speaker Change: Sure so.
You are correct that we expect to see a growth candidly in the first five years of the new stores lifecycle.
Speaker Change: For the last year. The 22, then into stores comped significantly better than the base stores did so the spread relative to the base stores was about what we expected I think what we didn't plan on obviously was the challenges of the base stores in terms of the negative trend in Iran.
Speaker Change: That being said the impact and we have nine of them that impacted the comps last year this year.
Speaker Change: We have 14 stores from 2023 that start adding to that now we've got 23 stores feeling that base and obviously as we get deeper into the year. Some of the 24 vintage of stores.
Speaker Change: Really start kicking in as well and what was really exciting we called this out.
Speaker Change: And the call was the stores, we opened up in the back half of 'twenty four under this kind of new site selection criteria.
Speaker Change: Are performing very very well very very well and so we think as we get more of those in the base, we're going to see a continued acceleration and so.
Speaker Change: We just got to get this waterfall going so far nine stores hasn't moved the needle. This year 23 should start moving the needle.
Speaker Change: For this is just going to gain steam as we as we evolve these stores immature in terms of Jordan and the impact on the comps we havent, we havent disclosed that I will tell you that it's going to launch as I said at the tail end of April. So we're going to we have about three quarters of business under our belt this year.
Speaker Change: That being said even through three quarters, it's going to be a top 20 brand for us and candidly as we go into 'twenty, six and beyond and have a full year of it and we see expansion there.
Speaker Change: It would be a top 10 brand for us so it's a meaningful growth driver for us moving forward.
Speaker Change: Thank you have a great spring.
Speaker Change: Thanks.
Speaker Change: Our next question comes from the line of Brian Nagel with Oppenheimer. Please proceed with your question.
Brian Nagel: Hi, good morning.
Speaker Change: Good morning.
Speaker Change: The first question I want I want to follow up just on the on the launch of Jordan in your stores.
Speaker Change: So clearly I mean, the way you were talking about this this is a significant move for Academy is there any more color you can give us on just the number of products that are launching.
Speaker Change: Is it.
Speaker Change: Totally incremental are you, replacing some product with with Jordan.
Speaker Change: Has academy sold Georgia in any way in the past then I think you touched on this in your prepared comments, but.
Speaker Change: Just with Nike in General is this you should we really view this.
Speaker Change: Launch of Jordan is a indication of just an overall strengthening relationship with Nike.
Speaker Change: Spectrum, more and more Nike product.
Speaker Change: In your stores over time.
Speaker Change: Yeah I'll start the answer is yes, its both so I'll start with Jordan.
Speaker Change: Previously, we had not had access to Jordan.
Speaker Change: In any categories and so this is this is the first time, we'll have it available to sell both in our stores and online launching at 145 stores plus online at the tail end of April.
Speaker Change: We're going to set up shops within men's women's and kids that will cross merchandize categories. Together, so you're going to see apparel footwear accessories sporting goods merchandize together will also have sporting goods out posted within sporting goods, so basketball things like that with the rest of the goods you would expect to find them with.
Speaker Change: Socks slides all those kinds of things are part of this launch.
Speaker Change: And we're really excited about it.
Speaker Change: Then the most requested brand on our website and our stores from customers.
Speaker Change: And really the angle were taking with Jordan as sport.
Speaker Change: So when you think about it.
Speaker Change: We have we talked about our entry points of sport and how.
Speaker Change: The youth sports players really start with us as kind of getting their gear and then how we take them through that journey through sport.
We're going to be the place we're going to buy your Jordan jumped man cleats or basketball shoes.
Speaker Change: We're not going to have some of the kind of retro limited edition released that drive some of the.
Speaker Change: True sporting goods or I'm, sorry <unk>.
Speaker Change: Retailers that we're going to have the support product and we think thats a great place for us to be and we're going to help them take this brand out.
Speaker Change: To underserved communities that currently they really werent, reaching with their current distribution on the second piece of it from a Nike perspective, yeah. It's two parts. So it's the launch of Jordan, but we're also expanding our footprint with Nike as well as access to more premium products. There, so youre going to see like.
Speaker Change: Like the $2 70, which is a hot shoe for them over the past couple of years expand out more rapidly into door count.
Speaker Change: We're going to have some new fashion and apparel and so when we when you walk into our stores at the end of March Youre going to see an expanded Nike footprint.
Speaker Change: And adjacent to our <unk>.
Speaker Change: Jordan shop to free up that space, we're eliminating some underperforming brands and categories. One of the categories were downsizing not that you guys didn't really care, it's called power Marine it's productive for us about three months out of the year, we're downsizing that freeing up some space to create a seasonal pattern on the perimeter, which ultimately takes pressure off the apparel pads. So.
Speaker Change: I would tell you our partnership with Nike has never been stronger and the Jordan launch coupled with the expansion. We're getting we're really excited about what that holds for us this year.
Speaker Change: No. That's very helpful. I appreciate all that color and if.
Speaker Change: Paul just a follow up question.
Speaker Change: With regard to tariffs you just given the focus of all of US on this topic. So it sounds like the comments you've made your exposure to China is limited and getting more limited we have no exposure to.
Speaker Change: In Mexico and Canada.
Speaker Change: Submit discussed most of it I guess is the question I have is if you look at that.
Speaker Change: The rest of the business is there is there anything hidden in there from a maybe from a.
Speaker Change: From a component standpoint that we could see some tariff impact is not captured that.
Speaker Change: China number in the commentary around Mexico and Canada.
Speaker Change: Yeah. So at this point, what we've given color commentary around is the stuff that were imported records on right. So obviously, we have a pretty diversified sourcing base of people that we do business with from a national brand perspective, they make products all over the world and so in some cases, they may be impacted by some of this.
Speaker Change: And you know what we know will happen is if they decide to pass costs, along it's not going to be just to us it'll be to everybody. So far I've seen most of the vendors try to hold cost as much as humanly possible. We've had a couple of places here and there we've seen some some prices nudge up but I believe that.
Speaker Change: As we move forward the national brands are taking the same approach we do write a first step when we saw these tariffs come across has worked with our factory partners in CFL absorb some of that and then second you start looking for places, where you might be able to offset some of the costs, but not make it over noticeable customers. So one of the things I think Karl mentioned on his prepared remarks.
Speaker Change: Where the value provider in our space, we offer great items, and a great everyday value and we know.
Speaker Change: Categories over the summer months like Grilles that we saw at $99 99, or kids spikes that we saw at 49 99 customer looks to us for those and we're going to protect prices on those things.
Speaker Change: Look for places for offsets, where maybe the customer may not notice.
Speaker Change: Yeah.
Speaker Change: That's very helpful. I appreciate it thank you.
Speaker Change: Our next question comes from the line of Kate Mcshane with Goldman Sachs. Please proceed with your question.
Kate Mcshane: Good morning, Thanks for taking our question.
Speaker Change: I was wondering if we could good morning wonder.
Speaker Change: I Wonder if we could ask for a little bit more context around the numbers you provided on the higher income cohort that is shopping academy. We wondered if this was a meaningful change from what you were seeing in previous quarters. It sounds like maybe it was.
Speaker Change: And what do you think well driver on this.
Speaker Change: What the driver is and now and is there any insight you can give around the basket size and what that looks like with that customer versus your core customer.
Speaker Change: Yeah. So we started to see this in the third quarter and we commented on it then you know quintiles four and five we are starting to see transact more with us and we're taking market share there I would say it accelerated in the fourth quarter. It's a.
Speaker Change: Pretty pronounced.
Speaker Change: What does it mean I think they're thinking value I think if you look at it.
Speaker Change: Households that are generally making above $100000 per year.
Speaker Change: We're seeking value there theyre trying to afford a lifestyle that includes sports and outdoors and they need that from a value provider and are turning to us. We thought that's what should have been happening all along we really didn't start to see it until the third quarter and it has accelerated as it really.
Speaker Change: <unk> the basket composition, we're seeing them transact with higher basket not just in those and those quintiles four and five but overall there was a lot of discussion about.
Speaker Change: Big ticket items things of that nature like we're seeing tickets over $200.
Speaker Change: Tickets.
Speaker Change: Larger tickets for us are up.
And really it's just about like 50 to 100 dollar ticket that we're seeing that decline that drives those overall year over year sales down 0.2% in the fourth quarter. So it's real it's accelerating I like what I see it's what I thought should have been happening before didn't start to see it until the third quarter.
Speaker Change: Okay.
Speaker Change: Okay. Thank you.
Speaker Change: Thanks Kate.
Speaker Change: Our next question comes from the line of Greg Melick with Evercore. Please proceed with your question.
Greg Melick: Thanks, I had two questions I wanted to start with.
Greg Melick: Tara follow up not going into the categories on the tariffs.
Speaker Change: Is it fair to think about the direct sourcing the 8% would be it's roughly a third of your private label of 'twenty. Three if we were trying to think about what percentage of your products is coming is imported or from China is that a fair fair right now yes.
Greg Melick: Yes, that's correct.
Speaker Change: By the way we started.
Greg Melick: Trying to diversify our sourcing base candidly pre.
Greg Melick: Pre pandemic right when the first round of tariffs happened I think it was in 2019 and.
Greg Melick: We started on this journey I think everybody did right and at the time.
Greg Melick: It really kind of stopped us or pauses was pandemic and then just getting access to product.
Greg Melick: Once every school was I think we like a lot of other people resumed that journey post pandemic and have been working this number down. That's why you know 10% last year is going to be closer to 8%. This year and we're going to continue to do that I think the thing that you have to think about also though as these tariffs are getting levied as they're not all against China. So for example, the 25%.
Greg Melick: On steel and aluminum as against any country right and so I think.
Greg Melick: Where in the past, maybe we thought having less exposure to China was the answer I think having a diversified base is probably ultimately give me the better answer because you never know who is going to get hit with the next round of tariffs.
Greg Melick: Got it and then second on <unk>.
Greg Melick: To go deeper into the some of the categories, where you're starting to see a turn particularly outdoor I think you mentioned.
Greg Melick: Some of these bigger ticket areas.
Greg Melick:
Greg Melick: I was starting to pick up I'm. Just curious are we fully down and have cycled the pull forward of COVID-19 demand and a lot of those categories are we starting to see that and what we're gonna be fitness or grills or you name it.
Greg Melick: Yes, we believe so.
Greg Melick: Well you know CAGR like Grilles that you just mentioned with strong all the way through we never saw kind of a pull back on that but certainly fitness has had a rough couple of years. Since 2022, 23 24 were all negative comps for US we saw that stabilize as we got into Q4 I think it was two pronged first maybe we're past a little bit of that pull forward and then second.
Greg Melick: We really focused on some really sharp pricing and giftable items still big ticket, maybe over 200 Bucks, but really great value for what it was and we saw that stabilize bikes was another business that.
Greg Melick: That had been really challenging for.
Greg Melick: For the past couple of years, we saw that business really inflect back to positive in Q4, we had a really good.
Greg Melick: Christmas with kids bikes in particular categories like fishing, which I'll also saw surge during the pandemic.
Greg Melick: Really started coming back last year in the back half of the year and.
Greg Melick: In outdoor has been one of our better performing businesses candidly all year, the firearms business has been pretty strong.
Greg Melick: As well as the fishing business that I, just mentioned and camping, which camping is a little more driven by some of the drink or trends that are out there, but we're definitely starting to see some of these categories searched during COVID-19 start to come back.
Greg Melick: Got it thanks and good luck. Thanks.
Greg Melick: Thank you.
Greg Melick: Okay.
Speaker Change: Our next question comes from the line of Michael Lasser with UBS. Please proceed with your question.
Michael Lasser: Good morning. Thank you so much for taking my question.
Michael Lasser: Understanding that it is a very uncertain time right now.
Speaker Change: Midpoint of your guidance.
Speaker Change: In beds, the expectation that that academy is going to comp negative. This year. Despite all of the initiatives that are at play, including the launch of Jordan the trade down you're already starting to see and the contribution from the ramp of the new stores.
Speaker Change: So this begs the question what type of environment macro.
Speaker Change: Backdrop for the sporting goods industry would be necessary for CAD and <unk> to drive a positive full year comp and then I have a follow up thanks.
Speaker Change: I'll take that one so we've seen sequential comp improvement starting in the second quarter of 2020 for third quarter was a little better in the second and fourth quarters, a little better.
Speaker Change: We're expecting that to continue.
Speaker Change: That's kind of inflected are represented in that low points I think.
Speaker Change: Those initiatives that we talked about self help initiatives. If you will that that Steve and I ran through Nike Jordan the handhelds RFID is a big deal.
Speaker Change: For us and some of the e-commerce foundational and user experience types of things those are real we put a business case on those and we track against that that's embedded within our guidance, but in terms of macro headwinds when we looked at the sarcoma data for our for front of the categories that they cover in our foot.
Speaker Change: For the year.
Speaker Change: Down about two 5%.
Speaker Change: And so we're not expecting that to magically increase we actually think tariffs will impose.
Speaker Change: More pressure on consumers not just at academies business, but overall so.
Speaker Change: We're really optimistic on our initiatives, we're really realistic associated with the macro environment that the consumer affairs.
Speaker Change: Health, if you will at the top Quintiles theyre seeking value more we see that but we don't think it's a rosy economic outlook for 2025.
Speaker Change: Understood My follow up question is.
Speaker Change: On your gross margin outlook for the year.
Speaker Change: You laid out that.
Speaker Change: Majority of your gross margin recapture will be driven by some of the supply chain and other factors that impacted your gross margin in 2024 with that being said do you.
Speaker Change: Have would probably be a lower margin vendor coming deeper into your assortment.
Speaker Change: And the potential that tariffs will weigh on the profitability of the overall sector. So how did you incorporate those factors along with what is likely to be very promotional environment. If the consumer doesn't take a step down into your gross margin expectations for the year and can you also.
Speaker Change: Isolate how much exposure you have to reciprocal Paris.
Speaker Change: As those come in around April 2nd that could create a little bit more pressure on academies profitability in 2025. Thank you very much.
Speaker Change: That's a multi pronged question, we will try to tackle it.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: So when you bring up.
Speaker Change: The margin from the incoming vendor I'm, assuming you're talking about Jordan, Jordan actually would be accretive from a margin perspective apparel carries the highest margin mix of our business across the footprint, so having bigger better apparel business mixes us up and provides a margin tailwind. The other thing you have to think about is and you've been doing this a while you understand this Mike.
Speaker Change: The first six months to 12 months you have a new brand on the floor, there's not a lot of cleanup markdowns right and so we took a lot of those markdowns on the other side of the year as you turn to <unk> into this year were very clean from an inventory perspective, we're going to have all this new product that's going to sell primarily at higher prices at full margin and so we think it will actually provide a bit of its margin tailwind for us as we've crossed.
Speaker Change: Throughout the year other things that can also be offsets or I think Karl brought up we see apparel growing at a faster rate. This year, that's a margin tailwind for us.
Speaker Change: We've done some regular price optimization, which we think will help offset a lot of the tariff impact.
So we feel like we've got it appropriately modeled into our into our guidance as we move forward.
Speaker Change: Cyclical tariffs I think this is going to be a fluid situation I think as we progress through the year anybody who says they have a really good idea of how this is going to play out.
Speaker Change: Probably isn't being realistic right. So what we've done is put in place a process where each month, we get together, we see what the latest rounds of tariffs then.
Speaker Change: We start looking at ways to offset them or deal with them and then we put that pricing action into place for the subsequent month.
Speaker Change: And I think that's how we're going to purchase all the way through and I think thats, how we have to approach it.
Speaker Change: Understood that's very helpful, even Karl and welcome to Dan Aldridge. Good luck to you all thank.
Michael Lasser: Thank you Michael.
Speaker Change: Thank you our final question will come from the line of Simeon Gutman with Morgan Stanley. Please proceed with your question.
Good morning team.
Simeon Gutman: My first question Karl you mentioned SG&A per store I think in the fourth quarter being well managed can you give us the 52 to 52 week, what's implied for SG&A per store for 2025, and then I have one follow up.
Simeon Gutman: Yes. It is deleverage at the mid point, it's a little under 100 basis points, but I just want to reemphasize.
Simeon Gutman: That deleverage is all from 20 to 25 new stores.
Simeon Gutman: Getting getting more into customer data grow in the dotcom business.
Simeon Gutman: It's not going to be on what we would consider base expenses, it's going to be on those seeds for the future, but it's a little below a 100 basis points implied.
Simeon Gutman: Within the midpoint of the 25 guidance.
Simeon Gutman: Okay and then the follow up is also on the <unk>.
Simeon Gutman: New stores or I guess.
Simeon Gutman: I think Steve mentioned the base the base stores, because if you take.
Simeon Gutman: The estimated benefit from new classes of stores.
Simeon Gutman: I think you could get to something like a one point contribution of comp.
Simeon Gutman: Rough math, it could be even higher it could be a little lower but its certainly positive which means the base.
Speaker Change: Still implied to be negative my question is on the base stores mature stores, what's happening to the trend line. There does it look similar.
Speaker Change: Two the ramping stores and then what's happening to cash flows our cash flow stable growing or deteriorating in some of these base stores that have had negative comps for a couple of years.
Speaker Change: I think Karl and I will tag team. This one so in terms of the base stores I mean, obviously, they've been comping negative, but as we've seen the trend improved sequentially.
Speaker Change: Order over quarter during the back half a year, we've seen the same thing happened with the base stores and candidly when we went through the prepared remarks.
Speaker Change: Obviously, new stores I think we understand the economics and know the value of those and it's our best way to grow market share and to grow our brand, but we know that we've got to get the base stores moving back and that's why we spent the most time talking about the initiatives. We have there the new brand launches the new technology rolling out the stores to work we've done around marketing to drive increased traffic I would tell you the preponderance of the strategies.
Speaker Change: We're banking on and working towards in 2026, and 25% and 26 I'm sorry.
Speaker Change: <unk> are really focused on turning the base store comp around.
Speaker Change: Yeah, and then I would say cash flow I'm proud of our cash flow.
Speaker Change: Look at cash flow from operations as a rate to sales I think we're top quartile in retail.
Speaker Change: Do that because I benchmark it all the time.
Speaker Change: Cash flow, we're managing well, we're managing inventory in those base stores well if you look at.
Speaker Change: Free cash flow if you will it was up year over year on a negative five comp.
Speaker Change: One comp for the year that has not happened stance, we're pretty proud of how we're managing through this.
Speaker Change: Okay.
Speaker Change: Okay. Thanks, good luck thanks.
Speaker Change: Thanks Simeon.
Speaker Change: As Carlin I outlined today, we remain confident in our long range plan and business strategies over the past 20 months, we've strengthened and solidified our management team and is pleased to welcome our new SVP and Chief I'm, sorry, EVP and Chief information officer or some of the non earlier. This month. We've also augmented our long range plan pillars with a strong tactical plan.
Speaker Change: We believe should move us back topline growth in 2025.
Speaker Change: We've got multiple pathways to grow and a strong operating model that allows us to fund our growth investments. While also consistently returning value to our shareholders. Finally, we have a beloved brand in our core geographies a lot of white space for expansion.
Speaker Change: The opportunity before us is clear and we're excited to pursue it we believe that by staying true to our strategy. We can achieve our vision, becoming the best sports and outdoor retailer in the country.
Speaker Change: Before ending the call today I want to thank our investors and analysts for joining us on the call I also want to take a moment to acknowledge and recognize the 22000 plus team members and their incredible efforts and consistently exceeding customer expectations. During 2020 for our associates remain the key ingredient in our secret sauce, and I believe they're going to deliver a strong result in 2025.
Have a great rest of your day.
Speaker Change: Okay.
Speaker Change: The call is now concluded you may now disconnect. Thank you.