Q4 2025 Academy Sports & Outdoors Inc Earnings Call

March 17, 2026

Only five results conference call.

The call is being recorded and all participants are in a listen only mode. Following the prepared remarks there'll be a brief question and answer session.

<unk> will be limited to analysts and investors. Please limit yourself to one question and one follow up to ask your question. During the call. Please press star one on your telephone keypad. If you require operator assistance at any time during the call. Please press star zero on your telephone keypad.

I would now like to turn the call over to Dan Aldridge, Vice President of Investor Relations for Academy Sports.

And outdoors.

Speaker #1: Good morning and welcome to the Academy Sports & Outdoors 4th Quarter Fiscal. 2025 results. Conference call. The call is being recorded and all participants are on a listen-only mode.

Good morning, everyone and thank you for joining me Academy sports and outdoors fourth quarter and fiscal year 2025 financial results call participating on today's call are Steve Lawrence Chief Executive Officer, and Carl Board Chief Financial Officer. As a reminder, today's earnings release and the comments made by management during this call.

Speaker #1: Following the prepared remarks, there will be a brief question-and-answer session. Questions will be limited to analysts and investors. Please limit yourself to one question and one follow-up.

Forward looking statements.

These statements are subject to risks and uncertainties that could cause our actual results to differ materially from our expectations and projections.

Speaker #1: To ask your question during the call, please press star 1 on your telephone keypad. If you require operator assistance at any time during the call, please press star 0 on your telephone keypad.

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 #1: I would now like to turn the call over to Dan Aldridge, Vice President of Investor Relations for Academy Sports & Outdoors.

The company undertakes no obligation to revise any forward looking statements.

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 Dot Academy Dot com.

Speaker #2: Good morning, everyone, and thank you for joining the Academy Sports & Outdoors 4th Quarter and Fiscal Year 2025 financial results call. Participating on today's call are Steve Lawrence, Chief Executive Officer, and Carl Ford, Chief Financial Officer.

This morning, we will review our financial results for the fourth quarter of fiscal 2025, and the full year provide an update on strategic initiatives discuss outlook for the year and share guidance for the full year of fiscal 2026. After we conclude our prepared remarks, there will be time for questions with that I'll turn the call over to CEO, Steve Lawrence.

Speaker #2: As a reminder, today's earnings release and the comments made by managers during the call include forward-looking statements. Please note that these are subject to risks and uncertainties that could cause our actual results to differ materially from our expectations and projections.

Speaker #2: 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.

Thanks, Dan and good morning to everyone on the line today.

Speaker #2: The company undertakes no obligation to revise any forward-looking statements. 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.academy.com.

On our call. This morning, we plan to cover our fourth quarter and full year results for 2025, along with providing initial guidance for 2026.

I'll remind you that we also have an analyst day planned for April seven in New York City, which will also be webcast.

Speaker #2: This morning, we will review our financial results for the 4th Quarter of Fiscal 2025 and the full year, provide an update on strategic initiatives, discuss outlook for the year, and share guidance for the full year Fiscal 2026.

Into more detail on our long range plan, how the investments we've been making in 2025 and 2026 play into our multi year strategy.

I'll start with the fourth quarter, which played out largely as we had forecasted with sales coming in at $1 7 billion, which was a two 5% increase versus last year.

Speaker #2: After we conclude prepared remarks, there will be time for questions. With that, I'll turn the call over to CEO Steve Lawrence.

<unk> and to a negative one 6% comp decrease.

Speaker #3: Thanks, Dan, and good morning to everyone on the line today. Our call this morning, we plan to cover our 4th Quarter and full year results for 2025, along with providing initial guidance for 2026.

These results were within our implied guidance range for the quarter.

As we shared on our last call sales were strong over the Thanksgiving and cyber week time periods.

Similar to prior years, we saw customer spending patterns in the second and third week of December and then surge during the week, leading into Christmas, which continued into the last week of the month.

Speaker #3: I will remind you that we also have an analyst date planned for April 7th in New York City which will also be webcast. We plan and how the investments we've been making in 2025 and 2026 play into our multi-year strategy.

January was softer than we anticipated primarily driven by the large winter storms in the last 10 days of the month, which caused roughly half of our stores to be partially or fully shut down for two to three days.

Speaker #3: I'll start with the 4th Quarter, which played out largely as we forecasted with sales coming in at 1.7 billion dollars, which is a 2.5% increase versus last year, translated into a mate of 1.6% comp decrease.

You saw the business rebound once our stores reopened.

As we discussed on prior calls the big unknown for US. This holiday was how the customer is going to react to the inflationary pressures on pricing for goods imported from overseas.

Speaker #3: These results were within our implied guidance for the quarter. As we shared on our last call, sales were strong over the Thanksgiving and Cyber Week time periods.

Our forecast was for average unit retail to be up low double digits for the quarter, we delivered against that by raising our average unit retails up 10% through a combination of promotional optimization growing sales and a better best out of our assortment.

Speaker #3: Similar to prior years, we saw customers' spending patterns soften in the second and third week of December, and then surged during the week leading into Christmas, which continued into the last week of the month.

Speaker #3: January was softer than we anticipated, primarily driven by the large winter storms in the last 10 days of the month, which caused roughly half of our stores to be partially or fully shut down for two to three days.

And some strategic AUR increases.

All of these efforts helped improve our gross margin by 140 basis points versus last year.

Going back to the full year I am proud of how our team executed in a choppy environment.

Speaker #3: We saw the business rebound once our stores reopened. As we discussed on prior calls, the big unknown for us this holiday was how the customer was going to react to the inflationary pressures on pricing for goods that were imported from overseas.

Navigated through all of the challenges in 2025, while still growing top line sales to $6 $5 billion were up 2%, which resulted in solid market share gains across our footprint.

Speaker #3: Our forecast was for average unit retails to be up low double digits for the quarter, and we delivered against that by raising our average unit retails up 10% through a combination of promotional optimization, growing sales in the Better Best End of our assortment, and some strategic AUR increases.

We also put in place many foundational building blocks, which should help drive sales in 2026 and beyond some of which include first I'm proud of how the team rallied midyear to mitigate and offset the impact of incremental tariffs that were levied late Q1, and Q2 of last year.

<unk> had to react mid year. After most of the merchandise was already purchased and managed to offset the increased expense through a combination of sourcing country diversification.

Speaker #3: All of these efforts helped improve our gross margin by 140 basis points versus last year. Pulling back to the full year, I'm proud of how our team executed in the choppy environment.

Inventory pull forward at lower costs.

Speaker #3: We navigated through all of the challenges in 2025, while still growing top-line sales to $6.05 billion, up 2%, which resulted in solid market share gains across our footprint.

Pricing and promotional optimization work.

The results of these efforts yielded an annual AUR increase of 6%, which translated into a gross margin rate of 34, 8% for plus 90 basis points versus the prior year.

Speaker #3: We also put in place many foundational building blocks which should help drive sales in 2026 and beyond, some of which include: first, I'm proud of how the team rallied mid-year to mitigate and offset the impact of the incremental tariffs that were levied in late '21 and '22 of last year.

As we embarked on this journey to raise AUR is we've also remained committed to not losing our reputation crowding outstanding value by constantly monitor and pricing across the marketplace.

What we found through the ongoing customer research work, we do is that.

Speaker #3: The team had to react mid-year after most of the merchandise was already purchased, and managed to offset increased expense through a combination of sourcing country diversification, inventory pull-forward at lower costs, and pricing and promotional optimization work.

We've managed to improve average unit retails across the full year, while also improving our value perception with customers relative to key competitors I can assure you that this was no easy feat.

Another key accomplishment was the 13, 6% growth we drove in our dot com business.

Speaker #3: The results of these efforts yielded an annual AUR increase of 6%, which translated into a gross margin rate of 34.8% for plus 90 basis points versus the prior year.

We put a lot of new players in place late in 2024, and they jumped in and quickly work improved core search that experienced fundamentals.

Speaker #3: As we embarked on this journey to raise AURs, we've also remained committed to not losing our reputation for having outstanding value by constantly monitoring pricing across the marketplace.

They also showed tremendous agility throughout the year as we incorporated emerging AI capabilities or our site for data enrichment on our items to help improve relevance and search.

Speaker #3: What we found through the ongoing customer research work we do is that we've managed to improve average unit retails across the full year, while also improving our value perception with customers relative to key competitors.

Leveraging image generation capabilities on our private brand apparel.

By introducing <unk> AI onto our site for the first time the launch of Scout prior to Christmas.

Speaker #3: I can assure you that this was no easy feat. Another key accomplishment was the 13.6% growth we drove in our dot-com business. We put a lot of new players in place late in 2024, and they jumped in and quickly worked to improve core search, site experience fundamentals.

While we're still in the early innings on these efforts. We're excited about the initial results we're seeing on this front.

Third new store expansion remains our number one growth opportunity.

During the year, we successfully opened up 24, new stores, which in aggregate are tracking to exceed their year one performance.

Speaker #3: They also showed tremendous agility throughout the year as we incorporated emerging AI capabilities into our site for data enrichment on our items to help improve relevance in search, leveraging image generation capabilities on our private brand apparel, and finally, by introducing agentic AI onto our site for the first time—the launch of Scout, prior to Christmas.

At the same time tourists that opened up in 2022 through 2024, which are now in the comp base drove mid single digit comp increases.

We expect this tailwind to grow in 2026, as the 2025 and enter new stores roles under the comps as we progress throughout the year.

Steve Lawrence: Improve core search site experience fundamentals. They also showed tremendous agility throughout the year as we incorporated emerging AI capabilities into our site for data enrichment on our items to help improve relevance in search, leveraging image generation capabilities on our private brand apparel, and finally, by introducing agentic AI onto our site for the first time, the launch of Scout prior to Christmas. While we're still in the early innings on these efforts, we're excited about the initial results we're seeing on this front. Third, new store expansion remains our number one growth opportunity. During the year, we successfully opened up 24 new stores which in aggregate are tracking to exceed their year 1 performance. At the same time, stores that opened up in 2022 through 2024, which are now in the comp base, showed mid-single-digit comp increases.

Fourth the team was laser focused on improving in stocks through a combination of assortment rationalization efforts, coupled with the rollout of RFID scanners to all of our stores in Q2.

Speaker #3: While we're still in the early innings on these efforts, we're excited about the initial results we're seeing. On this third, new store expansion remains our number one growth opportunity.

During the year, we shifted the weekly counts and inventory updates on brands that are RFID enabled which in aggregate represent roughly 25% of our annual volume.

Speaker #3: During the year, we successfully opened up 24 new stores which, in aggregate, are tracking to exceed their year-one performance. At the same time, stores that opened up in 2022 through 2024, which are now in the comp base, drove mid-single-digit comp increases.

The end result was improvements to our in stocks across the company by 500 basis points, which had a major impact on overall customer satisfaction, along with improving conversion.

Speaker #3: We expect this tailwind to grow in 2026, as the 2025 vintage and new stores roll into the comps as we progress throughout the year.

We also believe that the merchants did a great job of leaning into emerging trends and brands, which help reinforce our position as a key destination during gift, giving time periods, which is father's day and Christmas fell on a stock up time periods such as back to school.

Speaker #3: Fourth, the team was laser-focused on improving in-stocks through a combination of assortment rationalization efforts, coupled with the rollout of RFID scanners to all of our stores in Q2.

Adding in demand brands, such as Jordan and converse for assortment.

Speaker #3: During the year, we shifted to weekly counts and inventory updates on brands that are RFID-enabled, which, in aggregate, represent roughly 25% of our annual volume.

With expanding other hot trending items, such as Birkenstocks per logo baseball lifestyle 101 turtle box speakers <unk> helped us drive traffic into our stores during the key moments of our customers' calendars.

Steve Lawrence: We expect this tailwind to grow in 2026 as the 2025 vintage of new stores rolls into the comps as we progress throughout the year. Fourth, the team was laser-focused on improving in-stocks through a combination of assortment rationalization efforts, coupled with the rollout of RFID scanners to all of our stores in Q2. During the year, we shifted to weekly counts and inventory updates on brands that are RFID enabled, which in aggregate represent roughly 25% of our annual volume. The end result was improvement in store in-stocks across the company by 500 basis points, which had a major impact on overall customer satisfaction along with improving conversion.

Speaker #3: The end result was improvement store in-stocks across the company by 500 basis points, which had a major impact on overall customer satisfaction along with improving conversion.

This is another initiative that will continue to push on in 2026.

Next.

Our my Academy rewards loyalty program has continued to grow since we kicked it off in mid 2024, we now have over 13 million customers enrolled in this program.

Speaker #3: We also believe that the merchants did a great job of leaning into emerging trends and brands, which helped reinforce our position as a key destination during gift-giving time periods such as Father's Day and Christmas, along with stock-up time periods such as back-to-school.

This is another initiative that we're still in the early innings on when we have some exciting plans to accelerate growth on this front in 2026 and will share in a couple of minutes.

Speaker #3: Adding in-demand brands such as Jordan and Converse to our assortment, coupled with expanding other hot-trending items such as Birkenstocks, Furlabo, baseball lifestyle 101, Turtlebox speakers, and Ray-Ban Metas, helped us drive traffic into our stores during the key moments on our customers' calendars.

Finally, all of these efforts combined to help us drive new customers in our stores, which was evidenced by the 10% growth. We saw in consumers, whose household income over $100000 a year.

Steve Lawrence: We also believe that the merchants did a great job of leaning into emerging trends and brands, which helped reinforce our position as a key destination during gift-giving time periods such as Father's Day and Christmas, along with stock-up time periods such as back to school. Adding in-demand brands such as Jordan and Converse to our assortment, coupled with expanding other hot trending items such as Birkenstock, Hervé Léger, Baseball Lifestyle 101, Turtlebox speakers, and Ray-Ban Meta helped us drive traffic into our stores during the key moments on our customers' calendars. This is another initiative that we'll continue to push on in 2026. Next, our myAcademy Rewards loyalty program has continued to grow since we kicked it off in mid-2024. We now have over 13 million customers enrolled in this program.

Increased traffic from this cohort is in effect, helping us diversify and somewhat derisked, our customer base with these higher income consumers now representing our largest and fastest growing customer cohort.

Speaker #3: This is another initiative that will continue to push on in 2026. Next, our My Academy Rewards loyalty program has continued to grow since we kicked it off in mid-2024, and we now have over 13 million customers enrolled in this program.

To be clear.

Remain focused and committed to maintaining our position as the value provider in the sports and outdoor space.

Speaker #3: This is another initiative that we're still in the early innings on, and we have some exciting plans to accelerate growth on this front in 2026 that will share in a couple of minutes.

That being said, we believe layering on new trending brands and items targeted at the better best ended the assortment is a good way for us to both expand our share of wallet with existing customers.

Speaker #3: Finally, all of these efforts combined to help us drive new customers into our stores, which was evidenced by the 10% growth we saw—over $100,000 a year.

So attracting new customers shop with us.

Shifting gears to 2026, you saw in our press release earlier. This morning, we are providing sales guidance for 2026, plus two plus 5% total growth, which translates into a negative one to plus two comp sales.

Speaker #3: The increased traffic from this cohort is, in effect, helping us diversify and somewhat de-risk our customer base, with these higher-income consumers now representing our largest and fastest-growing customer cohort.

Steve Lawrence: This is another initiative that we're still in the early innings on, and we have some exciting plans to accelerate growth on this front in 2026 that I'll share in a couple of minutes. Finally, all these efforts combined to help us drive new customers into our stores, which was evidenced by the 10% growth we saw in consumers whose household income is over $100,000 a year. The increased traffic from this cohort is in effect helping us diversify and somewhat de-risk our customer base with these higher income consumers now representing our largest and fastest growing customer cohort. To be clear, we remain focused and committed to maintaining our position as the value provider in the sports and outdoor space.

The low end of our guidance contemplates a continued muted backdrop for discretionary consumer spending.

Speaker #3: To be clear, we remain focused and committed to maintaining our position as the value provider in the sports and outdoor space. That being said, we believe layering on new trending brands and items targeted at the 'Better Best' end of the assortment is a good way for us to both expand our share of wallet with existing customers, while also attracting new customers to shop with us.

Our belief is that most of the macroeconomic pressures of consumer base for the bank.

Back half of 'twenty five will carry into the first half of 2026.

In particular <unk>.

Larry pressures on good source outside of the U S should continue through the first half of the year.

Assuming no additional dramatic changes in trade policy, we believe that as we lap the increased tariff costs in the back half of the year prices should settle in at their new levels.

Speaker #3: Shifting gears to 2026, we saw on our press release early this morning that we're providing sales guides for 2026 of plus 2 to plus 5% total growth, which translates into a negative 1 to plus 2 comp sales.

Steve Lawrence: That being said, we believe layering on new trending brands and items targeted at the better, best end of the assortment is a good way for us to both expand our share of wallet with existing customers while also attracting new customers to shop with us. Shifting gears to 2026. You saw in our press release earlier this morning that we're providing sales guidance for 2026 of +2 to +5% total growth, which translates into a -1 to +2 comp sales. The low end of our guidance contemplates a continued muted backdrop for discretionary consumer spending. Our belief is that most of the macroeconomic pressures the consumer faced in the back half of 2025 will carry into the first half of 2026. In particular, inflationary pressures on goods sourced outside of the US should continue through the first half of the year.

That being said, we're also several tailwind that should help us overcome some of these macroeconomic pressures.

Speaker #3: The low end of our guidance contemplates a continued muted backdrop for discretionary consumer spending. Our belief is that most of the macroeconomic pressures that consumers face in the back half of '25 will carry into the first half of 2026.

<unk> mentioned, our external events that we should benefit from <unk>.

First we're still early in the taxes turn cycle, but we believe consumers should see higher income tax refunds. This year in the past we've seen categories such as firearms sunsets in work boots benefit for earlier <unk> higher refunds during the tax season.

Speaker #3: In particular, inflationary pressures on goods sourced outside of the US should continue through the first half of the year. Assuming no additional dramatic changes in trade policy, we believe that as we lap the increased tariff costs in the back half of the year, prices should settle in at their new levels.

It's hard to discern how much of an impact. We're currently seeing for reasons that I'll share with you through the first seven weeks of the quarter were running a positive comp. We believe some portion of these results could be attributed to higher tax refunds.

Speaker #3: That being said, there are also several tailwinds that should help us overcome some of these macroeconomic pressures. Diverse 3-year-old mention our external events that we should benefit from.

Second as most of you are aware the World Cup is coming to the U S. This summer and approximately 30 matches will be played in venues across our footprint.

Speaker #3: First, we're still early in the tax return cycle, but we believe consumers should see higher-income tax refunds this year. In the past, we've seen categories such as firearms, gun safes, and work boots benefit from earlier and/or higher refunds during the tax season.

We believe this should translate into increased tourism in foot traffic in the second quarter, which should provide a sales lift for our license team can tailgating businesses.

Steve Lawrence: Assuming no additional dramatic changes in trade policy, we believe that as we lap the increased tariff costs in the back half of the year, prices should settle in at their new levels. That being said, there are also several tailwinds that should help us overcome some of these macroeconomic pressures. The first three I'll mention are external events that we should benefit from. First, we're still early in the tax return cycle, but we believe consumers should see higher income tax refunds this year. In the past, we've seen categories such as firearms, gun safes, and work boots benefit from earlier and/or higher refunds during the tax season. It's hard to discern how much of an impact we're currently seeing from refunds, but I will share with you through the first 7 weeks of the quarter, we're running a positive comp.

Longer term, we have seen events such as this drive increased participation in youth soccer, which should help drive sales in our sporting goods business in the back half of the year and into 2027.

Speaker #3: It's hard to discern how much of an impact we're currently seeing from refunds, but I'll share with you that through the first seven weeks of the quarter, we're running a positive comp, and we believe some portion of these results could be attributed to higher tax refunds.

Finally, 2026 is the 250th anniversary of the United States, We traditionally see strong selling over the summer and patriotic merchandize and we believe this year will be even stronger coupled with surgeon national Pride around 250 birthday with all of the excitement for team USA. This summer.

Speaker #3: Second, as most of you are aware, the World Cup is coming to the US this summer, and approximately 30 matches will be played in venues across our football.

Speaker #3: We believe this should translate into increased tourism and foot traffic in the second quarter, which should provide a sales lift for our licensed team and tailgating businesses.

At the same time, we have multiple self help initiatives, we put in place, which should also enable us to drive comp growth.

Steve Lawrence: We believe some portion of these results could be attributed to higher tax refunds. Second, as most of you are aware, the World Cup is coming to the US this summer, and approximately 30 matches will be played in venues across our footprint. We believe this should translate into increased tourism and foot traffic in Q2, which should provide a sales lift for our licensed team and tailgating businesses. Longer term, we've seen events such as this drive increased participation in youth soccer, which should help drive sales in our sporting goods business in the back half of the year and into 2027. Finally, 2026 is the 250th anniversary of the United States.

We expect the momentum we started to build in our dot com results in 2025, we will continue to propel the business forward.

Speaker #3: Longer term, we've seen events such as this drive increased participation and use in soccer, which should help drive sales in our sporting goods business in the back half of the year and into 2027.

We're accelerating academies digital transformation by building a modern omnichannel business that will deepen engagement with our customers through data driven personalization.

Speaker #3: Finally, 2026 is the 250th anniversary of the United States. We traditionally see strong selling over the summer in patriotic merchandise, and we believe this year will be even stronger when you couple this surge in national pride around our 250th birthday with all of the excitement for Team USA this summer.

Enhancements for 2026 include moving.

Moving to an AI based semantic search platform on our site in late Q2 improved relevancy and conversion.

We're also working with leading AI platforms, such as open AI and Google to enable our catalog of products and offers surface inside their ecosystems, which will greatly simplify the browsing experience for customers who are using AI as the search engine for shopping.

Speaker #3: At the same time, we have multiple self-help initiatives we put in place, which should also enable us to drive comp growth. We expect the momentum we started to build in our dot-com results in 2025 will continue to propel the business forward.

Steve Lawrence: We traditionally see strong selling over the summer in patriotic merchandise, and we believe this year will be even stronger when you couple the surge in national pride around our 250th birthday with all of the excitement for Team USA this summer. At the same time, we have multiple self-help initiatives we put in place, which should also enable us to drive comp growth. We expect the momentum we started to build in our dot-com results in 2025 will continue to propel the business forward. We're accelerating Academy's digital transformation by building a modern omni-channel business that will deepen engagement with our customers through data-driven personalization. Key enhancements for 2026 include moving to an AI-based semantic search platform on our site in late Q2 to improve relevancy and conversion.

We also continue to grow our online assortment traditional drop ship partnerships.

Speaker #3: We're accelerating Academy's digital transformation by building a modern, omnichannel business that will deepen engagement with our customers through data-driven personalization. Key enhancements for 2026 include moving to an AI-based semantic search platform on our site in late Q2 to improve relevancy and conversion.

When you combine this push to expand our endless aisles with the new handheld devices, we rollout the stores in conjunction with our IV last year you can see we're empowering our store team members take care of their customers needs in real time.

Dramatically expanding the assortment available to them well beyond what is physically available in that individual store.

Speaker #3: We're also working with leading AI platforms such as OpenAI and Google to enable our catalog of products and offers to surface inside their ecosystems, which will greatly simplify the browsing experience for customers who are using AI as a search engine for shopping.

Lastly, we continue to expand our reach beyond our own channels through third party storefronts on platforms, where our customers frequently.

Chat box, our chief customer officer presented at our Analyst day on April seven to give you a deeper dive into many of the topics I just covered along with some of the other initiatives that we have in the works for later in the year and beyond.

Speaker #3: We also continue to grow our online assortment through additional dropship partnerships. When you combine this push to expand our endless aisles with the new handheld devices we rolled out to stores in conjunction with RFID last year, you can see we're empowering our store team members to take care of their customers' needs in real time, by dramatically expanding the assortment available to them well beyond what is physically available in that individual store.

Steve Lawrence: We're also working with leading AI platforms such as OpenAI and Google to enable our catalog of products and offers to surface inside their ecosystems, which will greatly simplify the browsing experience for customers who are using AI as a search engine for shopping. We also continue to grow our online assortment through additional drop ship partnerships. When you combine this push to expand our endless aisles with the new handheld devices we rolled out to stores in conjunction with RFID last year, you can see we're empowering our store team members to take care of their customers' needs in real time by dramatically expanding the assortment available to them well beyond what is physically available in that individual store. Lastly, we continue to expand our reach beyond our own channels through third-party storefronts on platforms where our customers frequent.

Another big landmark for Us in 2026 will be the relaunch the academy credit card.

We launched this program seven years ago and for many years. This served as our only customer loyalty vehicle and.

In 2024, we introduced my Academy rewards as a way to extend loyalty offers to customers either didn't want Andrew or qualify for a private label credit card.

Speaker #3: Lastly, we continue to expand our reach beyond our own channels through third-party storefronts on platforms where our customers frequent. Chad Fox, our Chief Customer Officer, presented our analyst day on April 7th to give you a deeper dive into many of the topics I just covered along with some of the other initiatives that we have in the works for later in the year and beyond.

These programs have worked in parallel to each other but we are not connected.

With this relaunch in Q2, we have streamlined the sign up process and are also creating a unified customer loyalty program expanded ways to provide increased value to our customers.

The new program will have three tiers.

Speaker #3: Another big landmark for us in 2026 will be the relaunch of the Academy Credit Card. We launched this program seven years ago and, for many years, this served as our only customer loyalty vehicle.

My Academy Awards, which is currently comprised 13 million members is based here and does not require an academy credit card access.

Steve Lawrence: Chad Fox, our Chief Customer Officer, presented our Analyst Day on 7 April to give you a deeper dive into many of the topics I just covered, along with some of the other initiatives that we have in the works for later in the year and beyond. Another big landmark for us in 2026 will be the relaunch of the Academy credit card. We launched this program 7 years ago, and for many years this served as our only customer loyalty vehicle. In 2024, we introduced My Academy Rewards as a way to extend loyalty offers to customers who either didn't want and/or qualify for our private label credit card. These programs have worked in parallel to each other but were not connected.

Benefits customers get for joining my Academy include assign on first discount at $15 off of next purchase.

Speaker #3: In 2024, we drew My Academy Rewards as a way to extend loyalty to customers who either didn't want and/or qualify for our private label credit card.

Birthday reward.

Free shipping on dotcom orders over $25 and a $25 reward after spending $500 inside of Academy within the first 90 days.

Speaker #3: These programs have worked in parallel to each other, but were not connected. With this relaunch in Q2, we have streamlined the sign-up process and are also creating a unified customer loyalty program to expanded ways to provide increased value to our customers.

Second tiers of private label credit card, which can only be used at academy.

Value proposition for this tier includes all the benefits of joining my Academy with some additional perks.

Speaker #3: The new program will have three tiers. My Academy Rewards, which is currently comprised of 13 million members, is the base tier and does not require an Academy Credit Card to access.

Up first discount accelerants from $15 up to $30 off.

Customers get free shipping on all Dot com orders with no minimum and similar to today customers receive 5% of all purchases made in our stores and dotcom site on this card.

Speaker #3: Key benefits customers get for joining My Academy include a sign-on first discount of $15 off their next purchase, birthday reward, free shipping on dot-com orders over $25, and a $25 reward after spending $500 inside of Academy within the first 90 days.

Steve Lawrence: With this relaunch in Q2, we have streamlined the sign-up process and are also creating a unified customer loyalty program with expanded ways to provide increased value to our customers. The new program will have three tiers. myAcademy Rewards, which is currently comprised of 13 million members, is the base tier and does not require an Academy credit card to access. Key benefits customers get for joining myAcademy include a sign-on first discount of $15 off their next purchase, birthday reward, free shipping on dot-com orders over $25, and a $25 reward after spending 500 inside of Academy within the first 90 days. The second tier is a private label credit card, which can only be used at Academy. Value proposition for this tier include all the benefits of joining myAcademy with some additional perks.

The third tier is a new mine Academy rewards Mastercard, which can be used as a normal credit card across all purchases.

Benefits for this year include all the once I listed for the private label credit card along with a couple of additional incentives.

Speaker #3: The second tier is a private label credit card, which can only be used at Academy. The value proposition for this tier includes all the benefits of joining My Academy, with some additional perks.

First they get a higher spending limit and customers traditionally get it on a private label credit card.

In addition to the 5% offer spending with US. These customers also get 2% back on all purchases made outside of Academy and rewards. It can redeemed shop back at Academy.

Speaker #3: The sign-up first discount accelerates from $15 off to $30 off, customers get free shipping on all dot-com orders with no minimum, and similar to today, customers receive 5% off all purchases made in our stores and dot-com site on this card.

Finally, big initial $50 reward shop after they spend the first $500 outside of Academy on their card.

Speaker #3: The third tier is a new My Academy Rewards MasterCard, which can be used as a normal credit card across all purchases. Benefits through this tier include all the ones I listed for the private label credit card along with a couple of additional incentives.

The beauty of this new car is a unique and best in class value proposition that helps solve an unmet customer needs.

Most retailers cards, only give rewards for spending within our brands four walls or on the website.

Steve Lawrence: The sign-up first discount accelerates from $15 off to $30 off. Customers get free shipping on all dot-com orders with no minimum. Similar to today, customers receive 5% off all purchases made in our stores and dot-com site on this card. The third tier is a new myAcademy Rewards Mastercard, which can be used as a normal credit card across all purchases. Benefits for this tier include all the ones I listed for the private label credit card, along with a couple of additional incentives. First, they get a higher spending limit than customers traditionally get on a private label credit card. In addition to the 5% off for spending with us, these customers also get 2% back on all purchases made outside of Academy in rewards they can redeem to shop back at Academy.

Rmi Academy rewards Mastercard will.

Speaker #3: First, they get a higher spending limit than customers traditionally get on our private label credit card. In addition to the 5% off for spending with us, these customers also get 2% back on all purchases made outside of Academy in rewards they can redeem to shop back at Academy.

It will allow always game families that we serve to leverage all of their spend on weekly necessities, such as groceries and gas.

Taking the rewards there from this spend to redeeming them and academy to buy all the gear they need to fill their families activities and passions.

Speaker #3: Finally, they get an additional $50 reward to shop after they spend their first $500 outside of Academy on their card. The beauty of this new card is a unique and best-in-class value proposition that helps solve and unmet customer need.

We will fully relaunched the program and convert existing cardholders over to the new card in Q2 in advance of father's day.

All reissued cards will have a reactivation reward included with our new credit card, which should help drive a good tailwind heading into the key summer selling time period.

Speaker #3: Most retailers’ cards only give rewards for spending within a brand’s four walls or on their website. Our My Academy Rewards MasterCard will allow always-game families that we serve to leverage all of their spend on weekly necessities such as groceries and gas, taking the rewards they earn from this spend and redeeming them at Academy to buy all the gear they need to fuel their families’ activities and passions.

Similar to last year will continue to add and expand our offering of better and best brands that resonate with our core consumers. For example, while we launched the Jordan brand and 145 doors by spurring some categories such as voice apparel stocks in slides and backpacks of our expanded out all doors.

Steve Lawrence: Finally, they get an initial $50 reward to shop after they spend their first $500 outside of Academy on their card. The beauty of this new card is a unique and best-in-class value proposition that helps solve an unmet customer need. Most retailers' cards only give rewards for spending within a brand's four walls or on their website. Our myAcademy Rewards Mastercard will allow all these game families that we serve to leverage all of their spend on weekly necessities such as groceries and gas, taking the rewards they earn from this spend and redeeming them at Academy to buy all the gear they need to fuel their families, activities, and passions. We will fully relaunch the program and convert existing cardholders over to the new card in Q2 in advance of Father's Day.

We will expand our Jordan brand shop concept. This spring out to an additional 55 stores, you'll take this integrated presentation of more than 200 doors overall.

Speaker #3: We will fully relaunch the program and convert existing cardholders over to the new card in Q2 in advance of Father's Day. All reissued cards will have a reactivation reward included with their new credit card, which should help drive a good tailwind heading into the key summer selling time period.

At the same time, we also will continue to extend our offering from Nike of higher level fashion in both footwear and apparel into all stores and online.

Another key general rapidly growing as our operating and working western where.

Speaker #3: Similar to last year, we'll continue to add and expand our offering of better and best brands that resonate with our core consumers. For example, while we launched the Jordan brand in 145 doors last spring, some categories such as boys' apparel, socks and slides, and backpacks have already expanded out to all doors.

We're capitalizing on this growing lifestyle movement by expanding our breadth of assortment from key brands such as carhartt wrangler in areas, while also expanding our vendor matrix tests emerging brands, such as <unk> and Brandt.

Steve Lawrence: All reissued cards will have a reactivation reward included with their new credit card, which should help drive a good tailwind heading into the key summer selling time period. Similar to last year, we'll continue to add and expand our offering of better and best brands that resonate with our core consumers. For example, while we launched the Jordan brand in 145 doors last spring, some categories such as boys apparel, socks and slides, and backpacks have already expanded out to all doors. We'll expand our Jordan brand shop concept this spring out to an additional 55 stores, which will take this integrated presentation to more than 200 doors overall. At the same time, we also will continue to expand our offering from Nike of higher-level fashion in both footwear and apparel into all stores and online.

On the fitness front, one of the hottest trends out there is high rocks for.

Speaker #3: We'll expand our Jordan brand shop concept this spring out to an additional 55 stores which will take this integrated presentation to more than 200 doors overall.

For those not familiar with Iraq's it is a multi disciplined workout where people train four and participate in over 80 races across the globe.

Speaker #3: At the same time, we also will continue to expand our offering from Nike of higher-level fashion in both footwear and apparel and to all stores and online.

We are their exclusive brick and mortar partner in the U S and will bring their branded training equipment over 70 Academy doors. This spring so people could trade at home for the races.

Speaker #3: Another key trend we're rapidly growing is our offering in work and western wear. We're capitalizing on this growing lifestyle movement by expanding our breadth of assortment from key brands such as Carhartt, Wrangler, and Ariatt.

The last Big Merchandize initiative I'll cover today is our continued push into the baseball lifestyle culture. We.

We continue to expand our assortment of the hottest bats, and gloves and supplemented that with an assortment of apparel and lifestyle accessories from hot new brands, such as baseball lifestyle, While 130 mentioned Bruce Bowl.

Speaker #3: We're also expanding our vendor matrix to test emerging brands such as Huey and Brunt. On the fitness front, one of the hottest trends out there is Hyrox.

Speaker #3: For those not familiar with Hyrox, it is a multidisciplined workout where people train for and participate in over 80 races across the globe. We are their exclusive brick-and-mortar partner in the US, and we'll bring their branded training equipment to over 70 Academy doors this spring so people can train at home for the races.

This area was one of our best selling categories for holiday and we expect this momentum will carry through into spring and summer selling seasons.

Steve Lawrence: Another key trend we're rapidly growing is our offering in work and western wear. We're capitalizing on this growing lifestyle movement by expanding our breadth of assortment from key brands such as Carhartt, Wrangler, and Ariat, while also expanding our vendor matrix to test emerging brands such as Hooey and Grunt Style. On the fitness front, one of the hottest trends out there is Hyrox. For those not familiar with Hyrox, it is a multi-disciplined workout where people train for and participate in over 80 races across the globe. We are their exclusive brick-and-mortar partner in the US, and we'll bring their branded training equipment to over 70 Academy doors this spring so people can train at home for the races. The last big merchandise initiative I will cover today is our continued push into the baseball lifestyle culture.

We plan to share more on our other exciting brand launches at our analyst day in April.

Last cell health initiative I will cover is leaning into and expanding on some of the strategic investments we've made over the past couple of years.

Speaker #3: The last big merchandise initiative I will cover today is our continued push into the baseball lifestyle culture. We continue to expand our assortment of the high stats and gloves, and have supplemented that with an assortment of apparel and lifestyle accessories from hot, new brands such as Baseball Lifestyle 101, 30 Mids, and Bruce Bolt.

As I mentioned earlier rolling out of RFID scanners last year was a game changer for us as it helps us improve in stocks and drive higher conversion rates.

During spanning tagging to include our private branded apparel and footwear products.

This will allow us to facilitate weekly counts and update inventory on roughly one third of our sales base by the end of spring.

Speaker #3: This area was one of our best-selling categories over the holiday, and we expect that the momentum will carry through into the spring and summer selling seasons.

We also remain committed to our new store expansion plans and as we shared in our Q3 call. Our plan is to open up 20 to 25 new stores in 2026.

Speaker #3: We plan to share more on our other exciting brand launches at our analyst day in April. The last self-help initiative I will cover is leaning into and expanding on some of the strategic investments we've made over the past couple of years.

Steve Lawrence: We continue to expand our assortment of the hottest bats and gloves and have supplemented that with an assortment of apparel and lifestyle accessories from hot new brands such as Baseball Lifestyle 101, Dirty Mids, and Bruce Bolt. This area was one of our best-selling categories over holiday, and we expect that the momentum will carry through into spring and summer selling seasons. We plan to share more on our other exciting brand launches at our Analyst Day in April. The last self-help initiative I will cover is leaning into and expanding on some of the strategic investments we've made over the past couple of years. As I mentioned earlier, rolling out our RFID scanners last year was a game changer for us as it helped us improve in stocks and drive higher conversion rates.

The majority of these stores will be infill within our legacy in existing markets that should be strong performance for us right out of the gates.

Speaker #3: As I mentioned earlier, rolling out our RFID scanners last year was a game-changer for us as it helped us improve in-stocks and drive higher conversion rates.

At the same time as we move through the year. The 2025 vintage new stores will start to flow into our comp base by the end of the year. We will have over 50 stores that opened up between 2022 and 2025 impacting our comparable sales growth.

Speaker #3: This spring, we're expanding tagging to include our private branded apparel and footwear products. This will allow us to facilitate weekly counts and update inventory on roughly one-third of our sales base by the end of spring.

We will give you a deeper dive into how we've refined our real estate strategy during our analyst day on April seven.

Speaker #3: We also remain committed to our new store expansion plans, and as we shared in our Q3 call, our plan is to open up 20 to 25 new stores in 2026.

Summarized we are proud of all of it the team accomplished in 2025, while we expect the macroeconomic backdrop to be challenging for the lower in Midland Com consumer fluid through a combination of external factors that when coupled with our internal initiatives should allow us to grow top line sales, 2% to 5% while also driving margin expansion.

Speaker #3: The majority of these stores will be infill within our legacy and existing markets and should be strong performers for us right out of the gates.

Steve Lawrence: This spring, we're expanding tagging to include our private branded apparel and footwear products. This will allow us to facilitate weekly counts and update inventory on roughly 1/3 of our sales base by the end of spring. We also remain committed to our new store expansion plans, and as we shared in our Q3 call, our plan is to open up 20 to 25 new stores in 2026. The majority of these stores will be infill within our legacy and existing markets and should be strong performers for us right out of the gates. At the same time, as we move through the year, the 2025 vintage new stores will start to pull in our comp base. By the end of the year, we'll have over 50 stores that opened up between 2022 and 2025, impacting our comparable sales growth.

Speaker #3: At the same time, as we move through the year, the 2025 vintage new stores will start to flow into our cot base, and by the end of the year, we'll have over 50 stores that opened up between 2022 and 2025, impacting our comparable sales growth.

Earnings per share growth in 2026.

I will now turn it over to Karl to give you a deeper dive into the Q4 and full year financials for 2025, along with our initial guidance for 2026 Carl.

Speaker #3: We'll give you a deeper dive into how we've refined our real estate strategy during our analyst day on April 7th. To summarize, we are proud of all that the team accomplished in 2025.

Thank you Steve fourth quarter net sales were $1 7 billion up two 5% and comparable sales were down one 6%.

Speaker #3: While we expect the macroeconomic backdrop to be challenging for the lower and middle-income consumer, we believe that there are a combination of external factors that, when coupled with our internal initiatives, should allow us to grow top-line sales 2 to 5 percent while also driving margin expansion and earnings-per-share growth in 2026.

Breaking down the comp transactions were down six 4% while ticket was up five 1%.

Steve Lawrence: We'll give you a deeper dive into how we've refined our real estate strategy during our Analyst Day on 7 April. To summarize, we are proud of all that the team accomplished in 2025. While we expect the macroeconomic backdrop to be challenging for the lower and middle-income consumer, we believe that there are a combination of external factors that when coupled with our internal initiatives, should allow us to grow top-line sales 2 to 5% while also driving margin expansion and earnings per share growth in 2026. I will now turn it over to Carl to give you a deeper dive into the Q4 and full year financials for 2025, along with our initial guidance for 2026. Carl?

In the fourth quarter Academy generated net income of $133 7 million and diluted earnings per share of $1 98.

Speaker #3: I will now turn it over to Carl to give you a deeper dive into Q4 and pull your financials for 2025, along with our initial guidance for annual 2026.

Speaker #3: Carl?

Fourth quarter, adjusted net income was $132 9 million or $1 97.

Speaker #2: Thank you, Steve. Fourth quarter net sales were $1.7 billion, up 2.5%. Comparable sales were down 1.6%. Breaking down the comp, transactions were down 6.4%, while ticket was up 5.1%.

And adjusted diluted earnings per share.

Gross margin of 33, 6% in the fourth quarter was up 140 basis points versus last year and exceeded our implied guidance.

Speaker #2: In the fourth quarter, Academy generated net income of $133.7 million and diluted earnings-per-share of $1.98. Fourth quarter adjusted net income was $132.9 million. Or $1.97 in adjusted diluted earnings-per-share.

The majority of the expansion was driven by efficiency gains in our supply chain.

Carl Ford: Thank you, Steve. Q4 net sales were $1.7 billion, up 2.5%, and comparable sales were down 1.6%. Breaking down the comp, transactions were down 6.4%, while ticket was up 5.1%. In Q4, Academy generated net income of $133.7 million and diluted earnings per share of $1.98. Q4 adjusted net income was $132.9 million or $1.97 in adjusted diluted earnings per share. Gross margin of 33.6% in Q4 was up 140 basis points versus last year and exceeded our implied guidance.

And the lapping of costs incurred for port disruption from the prior year.

Merch margin inclusive of tariffs was flat as we manage prices, while managing alignment with our value pricing strategy.

SG&A expenses came in at 23, 7% of sales for the fourth quarter and.

Speaker #2: Gross margin of 33.6% in the fourth quarter was up 140 basis points versus last year and exceeded our implied guidance. The majority of the expansion was driven by efficiency gains in our supply chain.

An increase of approximately $21 million or 70 basis points.

The increase was driven by growth initiatives totaling approximately 135 basis points.

Speaker #2: And the lapping of costs incurred for port disruption from the prior year. Merch margin inclusive of tariffs was flat as we managed prices while managing alignment with our value pricing strategy.

Apprised of 115 basis points of new store growth as we've opened 24 new stores in the last 12 months.

And 20 basis points of technology investments.

Speaker #2: SG&A expenses came in at 23.7% of sales for the fourth quarter, an increase of approximately $21 million, or 70 basis points. The increase was driven by growth initiatives totaling approximately 135 basis points.

Fuel our omnichannel growth.

Carl Ford: The majority of the expansion was driven by efficiency gains in our supply chain and the lapping of costs incurred for port disruption from the prior year. Merch margin, inclusive of tariffs, was flat as we managed prices while managing alignment with our value pricing strategy. SG&A expenses came in at 23.7% of sales for Q4, an increase of approximately $21 million or 70 basis points. The increase was driven by growth initiatives totaling approximately 135 basis points, comprised of 115 basis points of new store growth as we've opened 24 new stores in the last twelve months and 20 basis points of technology investments to fuel our omni-channel growth. The acceleration in new store growth from 2022 to 2025 has had an outsized impact on SG&A expense growth.

The acceleration in new store growth from 2022 to 2025 has had an outsized impact on SG&A expense growth, but as we move through 2026, the number of new stores at 20 to 25 will be similar to FY 'twenty five.

Speaker #2: Comprised of $115 basis points of new store growth as we've opened 24 new stores in the last 12 months, and 20 basis points of technology investments to fuel our omnichannel growth.

Looking at the balance sheet, we ended the quarter with $330 million in cash, which was a 14% increase from the prior year.

Our inventory balance was $1 5 billion.

Speaker #2: The acceleration in new store growth from 2022 to 2025 has had an outsized impact on SG&A expense growth, but as we move through 2026, the number of new stores at 20 to 25 will be similar to FY25.

An increase of 15% compared to last year.

On a per store basis inventory dollars were up six 3% while inventory units were flat.

For the full year, we generated $435 million in cash from operations of <unk>.

Speaker #2: Looking at the balance sheet, we ended the quarter with $330 million in cash, which was a 14% increase from the prior year. Our inventory balance was $1.5 billion.

Which we reinvested $172 million back into the business to drive our growth initiatives.

These actions led to approximately $263 million.

Speaker #2: An increase of 15% compared to last year. On a per-store basis, inventory dollars were up 6.3% while inventory units were flat. For the full year, we generated $435 million in cash from operations.

Carl Ford: As we move through 2026, the number of new stores at 20 to 25 will be similar to FY 2025. Looking at the balance sheet, we ended the quarter with $330 million in cash, which was a 14% increase from the prior year. Our inventory balance was $1.5 billion, an increase of 15% compared to last year. On a per store basis, inventory dollars were up 6.3%, while inventory units were flat. For the full year, we generated $435 million in cash from operations, of which we reinvested $172 million back into the business to drive our growth initiatives.

The adjusted free cash flow.

Of which we returned $234 million to investors through $35 million in dividends and $199 million in share repurchases at an average price of $50 62.

Speaker #2: Of which we reinvested $172 million back into the business to drive our growth initiatives. These actions led to approximately $263 million. Of adjusted free cash flow.

In terms of capital allocation, our strategy remains focused on generating cash flow to reinvest into our growth initiatives for that business and to return the majority of our free cash flow back to investors through dividends and stock repurchases.

Speaker #2: Of which we returned $234 million to investors through 35 million in dividends and $199 million in share repurchases at an average price of $50.62.

During the fourth quarter, we paid $8 6 million in dividends and repurchased approximately $100 million of our shares at an average share price of $54 in <unk>.

Carl Ford: These actions led to approximately $263 million of adjusted free cash flow, of which we returned $234 million to investors through $35 million in dividends and $199 million in share repurchases at an average price of $50.62. In terms of capital allocation, our strategy remains focused on generating cash flow to reinvest into our growth initiatives for the business and to return the majority of our free cash flow back to investors through dividends and stock repurchases. During Q4, we paid $8.6 million in dividends and repurchased approximately $100 million of our shares at an average share price of $54.03.

We are pleased to announce the board recently approved a 15% increase in our dividend.

Speaker #2: In terms of capital allocation, our strategy remains focused on generating cash flow to reinvest into our growth initiatives for the business. And to return the majority of our free cash flow back to investors.

<unk> and <unk> 15 per share.

On April 10th 2026 to stockholders of record as of March 20th 2025.

Speaker #2: Through dividends and stock repurchases. During the fourth quarter, we paid $8.6 million in dividends and repurchased approximately $100 million of our shares at an average share price of $54.03.

Our guidance for 2026 is as follows net.

Net sales are expected to range from $6 $1 8 billion.

To $6 $3 6 billion, an increase of 2% to 5%.

Speaker #2: We are pleased to announce the board recently approved a 15% increase in our dividend. Resulting in 15 cents per share. Payable on April 10th, 2026.

With comparable sales of negative 1% to positive, 2% with a midpoint of positive 0.5%.

I'd like to share the assumptions that influence our 2026 guidance.

Speaker #2: To stockholders of record as of March 20th, 2025. Our guidance for 2026 is as follows. Net sales are expected to range from 6.18 billion dollars to 6.36 billion dollars and increase of 2% to 5%.

As we head into 2026, we expect the consumer to continue to face a challenging economic backdrop.

But we are confident that our internal initiatives alone support the midpoint of our guidance.

Carl Ford: We are pleased to announce the board recently approved a 15% increase in our dividend, resulting in $0.15 per share payable on 10 April 2026 to stockholders of record as of 20 March 2025. Our guidance for 2026 is as follows. Net sales are expected to range from $6.18 billion to $6.36 billion, an increase of 2% to 5% with comparable sales of -1% to 2% with a midpoint of 0.5%. I'd like to share the assumptions that influence our 2026 guidance. As we head into 2026, we expect the consumer to continue to face a challenging economic backdrop.

The low end of our sales guidance contemplates a continued muted backdrop in discretionary consumer spending.

Speaker #2: With comparable sales of negative 1% to positive 2%, with a midpoint of positive 0.5%, I'd like to share the assumptions that influence our 2026 guidance.

And the high end represents an improvement in consumer health aided by the macro events already mentioned.

We also expect traffic to improve as our internal initiatives continue to resonate and prices stabilize throughout the year.

Speaker #2: As we head into 2026, we expect the consumer to continue to face a challenging economic backdrop. But we are confident that our internal initiatives alone support the midpoint of our guidance.

Our gross margin rate is expected to range from 34, 5% to 35, 8%.

Speaker #2: The low end of our sales guidance contemplates a continued muted backdrop in discretionary consumer spending. And the high end represents an improvement in consumer health.

GAAP net income is between $380 million and $415 million.

<unk> net income, which excludes stock based compensation of approximately $37 million is forecasted to range from $410 million to $445 million.

Speaker #2: Aided by the macro events already mentioned. We also expect traffic to improve. As our internal initiatives continue to resonate and prices stabilize throughout the year.

Carl Ford: We are confident that our internal initiatives alone support the midpoint of our guidance. The low end of our sales guidance contemplates a continued muted backdrop in discretionary consumer spending, and the high end represents an improvement in consumer health, aided by the macro events already mentioned. We also expect traffic to improve as our internal initiatives continue to resonate and prices stabilize throughout the year. Our gross margin rate is expected to range from 34.5% to 35.0%. GAAP net income is between $380 million and $415 million. Adjusted net income, which excludes stock-based compensation of approximately $37 million, is forecasted to range from $410 million to $445 million.

Our gross margin gains for the full year of 2025 were primarily driven from merch margin expansion.

Speaker #2: Our gross margin rate is expected to range from 34.5% to 35.0%. Gap net income is between $380 million and $415 million. Adjusted net income, which excludes stock-based compensation of approximately $37 million, is forecasted to range from $410 million to $445 million.

As we expanded Nike and launch the Jordan brand.

And while we don't anticipate the same level of expansion, we do see growth as we expand the Jordan brand shop concept into 55 more doors and.

And expand soft line brands like <unk>.

This of course will be partially offset by the impact of continued tariffs, especially in the first half of the year.

Speaker #2: Our gross margin gains for the full year of 2025 were primarily driven from merch margin expansion. As we expanded Nike and launched the Jordan brand, and while we don't anticipate the same level of expansion, we do see growth as we expand the Jordan brand shop concept into 55 more doors.

In addition, we expect shrink to be a tailwind.

As we continue to rollout RFID, so more national brands.

And private label apparel and footwear.

We expect GAAP diluted earnings per share of $5 65.

To $6 15, and adjusted diluted earnings per share of $6 10 to $6 60.

Speaker #2: And expand soft line brands like Berlabo. This, of course, will be partially upset by the impact of continued tariffs. Especially in the first half of the year.

Carl Ford: Our gross margin gains for the full year of 2025 were primarily driven from merch margin expansion as we expanded Nike and launched the Jordan brand. While we don't anticipate the same level of expansion, we do see growth as we expand the Jordan brand shop concept into 55 more doors and expand soft line brands like Bernabeau. This, of course, will be partially offset by the impact of continued tariffs, especially in the first half of the year. In addition, we expect shrink to be a tailwind as we continue to roll out RFID to more national brands, private label apparel, and footwear. We expect GAAP diluted earnings per share of $5.65 to $6.15, and adjusted diluted earnings per share of $6.10 to $6.60.

The earnings per share estimates are based on the expected share count of 67 million diluted weighted average shares outstanding for the full year.

Speaker #2: In addition, we expect shrink to be a tailwind. As we continue to roll out our FID to more national brands footwear. We expect gap diluted earnings per share of $5.65 to $6.15 and adjusted diluted earnings per share of $6.10 to $6.60.

These amounts do not include potential future repurchase activity.

Our current authorization at $437 million remaining at the end of fiscal 2025.

We are also confident in the strength of our cash flows and expect to generate between $250 million and $300 million of adjusted free cash flow.

Speaker #2: The earnings per share estimates are based on an expected share count of 67 million diluted weighted average shares outstanding for the full year. These amounts do not include potential future repurchase activity.

After investing $200 million to $240 million back into the business in the form of capital expenditures, primarily for our strategic growth initiatives.

Speaker #2: Our current authorization had $437 million remaining at the end of fiscal 2025. We are also confident in the strength of our cash flows. And expect to generate between $250 million and $300 million of adjusted free cash flow.

Looking at the anticipated shape of the year, our Q1 performance through the first seven weeks is off to a positive comp sales start and we expect it to be our strongest quarter as we lap a negative three 7% comp from 2025.

Carl Ford: The earnings per share estimates are based on an expected share count of 67 million diluted weighted average shares outstanding for the full year. These amounts do not include potential future repurchase activity. Our current authorization had $437 million remaining at the end of fiscal 2025. We are also confident in the strength of our cash flows and expect to generate between $250 million and $300 million of adjusted free cash flow after investing $200 million to $240 million back into the business in the form of capital expenditures, primarily for our strategic growth initiatives.

On the surface the second quarter could appear the most challenging as we lap a positive comp.

Speaker #2: After investing $200 million to $240 million back into the business in the form of capital expenditures, primarily for our strategic growth initiatives, looking at the anticipated shape of the year, our Q1 performance through the first seven weeks is off to a positive comp sale start.

The launch of Jordan brand and a subsequent Nike assortment expansion. However.

However, we are optimistic as we expect to see tailwind from the launch of the New mine Academy rewards Mastercard.

As well as the continued rollout of the Jordan brand shop concept into 55 doors. This spring.

Speaker #2: And we expect it to be our strongest quarter, as we lap a negative 3.7% comp from 2025. On the surface, the second quarter could appear the most challenging.

Additionally, we expect to see a tailwind from the World Cup increased tax refunds and Americas 250 <unk> anniversary.

Speaker #2: As we lap a positive comp, the launch of Jordan brand, and the subsequent Nike assortment expansion. However, we're optimistic. As we expect to see tailwinds from the launch of the new My Academy Rewards Mastercard, as well as the continued rollout of the Jordan brand shop concept into 55 doors this spring.

We expect the positive momentum in the first half to carryover into the second half of the year, but we're mindful that tariffs and any prolonged impact of gas prices could have a negative impact on the U S consumer.

Carl Ford: Looking at the anticipated shape of the year, our Q1 performance through the first 7 weeks is off to a positive comp sales start, and we expect it to be our strongest quarter as we lap a negative 3.7% comp from 2025. On the surface, the Q2 could appear the most challenging as we lap a positive comp, the launch of Jordan Brand, and the subsequent Nike assortment expansion. However, we're optimistic as we expect to see tailwinds from the launch of the new myAcademy Rewards Mastercard, as well as the continued rollout of the Jordan brand shop concept into 55 doors this spring. Additionally, we expect to see a tailwind from the World Cup, increased tax refunds, and America's 250th anniversary.

It's also important to remember that the 20% to 25, new store openings in 2026 will be more back half weighted when compared to fiscal 2025 due to the initial pausing of signing new leases for 2026, when tariffs caused uncertainty in construction prices.

Speaker #2: Additionally, we expect to see a tailwind from the World Cup. Increased tax refunds and America's $250th anniversary. We expect the positive momentum in the first half to carry over into the second half of the year.

We will provide updates to our guidance each quarter as conditions warrant.

Speaker #2: But we're mindful that tariffs and any prolonged impact to gas prices could have a negative impact on the US consumer. It's also important to remember that the 20 to 25 new store openings in 2026 will be more back half weighted when compared to fiscal 2025.

Include we're optimistic as we head into the new fiscal year and believe we have made the right investments and strategic decisions.

Look forward to speaking with you again during our analyst day on April 7th about our long range plan opt.

Operator, please open the line for questions.

Speaker #2: Due to the initial pausing of signing new leases for 2026, when tariffs caused uncertainty in construction prices, we will provide updates to our guidance each quarter as conditions warrant.

Carl Ford: We expect the positive momentum in the first half to carry over into the second half of the year, but we're mindful that tariffs and any prolonged impact to gas prices could have a negative impact on the US consumer. It's also important to remember that the 20 to 25 new store openings in 2026 will be more back half weighted when compared to fiscal 2025 due to the initial pausing of signing new leases for 2026 when tariffs caused uncertainty in construction prices. We will provide updates to our guidance each quarter as conditions warrant. To conclude, we're optimistic as we head into the new fiscal year and believe we have made the right investments and strategic decisions. I look forward to speaking with you again during our Analyst Day on 7 April about our long-range plan. Operator, please open the line for questions.

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Speaker #2: To conclude, we're optimistic as we head into the new fiscal year and believe we have made the right investments and strategic decisions. I look forward to speaking with you again during our Analyst Day on April 7th about our long-range plan.

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One moment, please while we poll for questions.

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Hi, first question comes from Christopher Harvest with J P. Morgan Your line is now live.

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Thanks, Good morning, guys. So my first question is on sales.

Mentioned in large number of store closures at the end of January can you quantify how much of a headwind that was to your overall performance in the fourth quarter and then as we try to.

Speaker #1: As a reminder, we ask that you please limit to one question and one follow-up. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator 1: Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. As a reminder, we ask that you please limit to one question and one follow-up. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. My first question comes from Christopher Horvers with JP Morgan. Your line is now live.

Operator: Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. As a reminder, we ask that you please limit to one question and one follow-up. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. My first question comes from Christopher Horvers with JP Morgan. Your line is now live.

Parse out what the right underlying trend in the business is.

Speaker #1: One moment, please, while we pull for questions. My first question comes from Christopher Horvitz with JP Morgan. Your line is now live.

Any specificity on where you're running quarter to date, you did have weather headwinds that you lap last year in February.

And then in.

And then March wasn't that much better than <unk> had the war recently, which I think historically when these events happen. It does drive some sort of run on the on the ammo business as well. So how do you think about like the puts and takes of what the right underlying trend is in and have you seen that in the net impact from whats going.

Speaker #3: Thanks. Good morning, guys. So my first question is on sales. You mentioned a large number of store closures at the end of January. Can you quantify how much of a headwind that was to your overall performance in the fourth quarter?

Speaker #3: And then, as we try to parse out what the right underlying trend in the business is, where are you any specificity on where you're running quarter to date?

On and around.

Yes, sure I'll start so Chris we saw trends coming through Christmas pretty strong the last week, leading up to Christmas and even the week. After Christmas January is actually running positive for US we had roughly half of our stores.

Speaker #3: You did have weather headwinds that you lapped last year in February, and then March wasn't that much better. And then you've had the war recently, which I think historically when these events happen, it does drive some sort of run on the ammo business as well.

Christopher Horvers: Thanks. Good morning, guys. My first question is on sales. You mentioned a large number of store closures at the end of January. Can you quantify how much of a headwind that was to your overall performance in Q4? As we try to, you know, parse out what the right underlying trend in the business is, any specificity on where you're running quarter to date? You did have weather headwinds that you lapped last year in February, and then March wasn't that much better. You've had the war recently, which I think historically, when these events happen, it does drive some sort of run on the ammo business as well. How do you think about, like, the puts and takes of what the right underlying trend is?

Close for about three days it was over a weekend this year versus last year.

Some other was during the week. If you took those three days out we had roughly half of our stores running are shut down we're running a positive comp in the mid single digit range. We estimate that it's probably worth about 100 basis points of comp of a headwind for us within Q4.

Speaker #3: So, how do you think about the puts and takes of what the right underlying trend is? And have you seen any of that impact from what's going on in Iran?

Speaker #4: Yeah, sure. I'll start. So Chris, we saw trends coming through Christmas pretty strong the last week leading up to Christmas and even the week after Christmas.

We were pleased to see though that once the stores reopen as we said the business resume.

February was strong we were happy with the positive comps we had.

Speaker #4: January was actually running positive for us. We had roughly half of our stores closed for about three days. It was over a weekend this year versus last year.

The cost across every division that has continued into early March.

So it feels pretty broad based I would tell you that ammo the CAGR you just mentioned.

Christopher Horvers: Have you seen them, that impact from what's going on in Iran?

Speaker #4: We had some weather that was during the week. If you took those three days out where we had roughly half of our stores running or shut down, we're running a positive comp in the mid-single digit range.

Christopher Horvers: Have you seen them, that impact from what's going on in Iran?

Got better during the quarter in Q4. So we were we talked I think in the previous call about how we are up against a run up part of election in Q3, and we saw that business start to stabilize in Q4 started off running down high single digits by the end of the quarter was running down low single digits. It's running positive comp was running positive comp in February before.

Steve Lawrence: Yeah, sure. I'll start. You know, Chris, we saw trends coming through Christmas pretty strong the last week leading up to Christmas and even the week after Christmas. January is actually running positive for us. We had roughly half of our stores closed for about 3 days. It was over a weekend this year versus last year, where we had some weather. It was during the week. If you took those 3 days out where we had roughly half of our stores running or shut down, we're running a positive comp in the mid-single-digit range. We estimate that it's probably worth about 100 basis points in comp of a headwind for us within Q4. We were pleased to see, though, that once the stores reopened, as we said, the business resumed. February was strong.

Speaker #4: We estimate that it's probably worth about 100 basis points in comp of a headwind for us within Q4. We're pleased to see, though, that once the stores reopen, as we said, the business resumed.

Speaker #4: February was strong. We were happy with the positive comps. We had positive comps across every division. That's continued into early March, so it feels pretty broad-based.

The war kicked off a couple of weeks ago and then since then it's obviously accelerated a little bit but it's also been a solid business for us it probably aided a little bit by.

Speaker #4: I will tell you that ammo, the category you just mentioned, got better during the quarter in Q4. So we talked to, I think, in the previous call about how we're up against the run-up part of the election in Q3.

Current events.

Understood and then my follow up question Carlos on the SG&A side.

Mentioned that youre going to annualize, you'll have two back to back years of similar kind of unit growth.

Speaker #4: And we saw that business start to stabilize in Q4. Started off running down high single digits by the end of the quarter. It was running down low single digits.

As you look at what's happened ex that lapping.

Steve Lawrence: You know, we were happy with the positive comps. We had positive comps across every division. That's continued into early March. It feels pretty broad-based. I would tell you that ammo, you know, the category you just mentioned, got better during the quarter in Q4. We talked, I think, in the previous call about how we're up against a run-up prior to the election in Q3, and we saw that business start to stabilize in Q4. It started off running down high single digits by the end of the quarter. It was running down low single digits. It's running positive comp. It was running positive comp in February before the war kicked off a couple of weeks ago, and then since then, it's obviously accelerated a little bit. It's also been a solid business for us.

Speaker #4: It's running positive comp. It was running positive comp in February before the war kicked off a couple of weeks ago. And then since then, it's obviously accelerated a little bit.

Lapped Jordan, Jordan rollout and some of the costs that you've put in on the advertising and the updates there, but <unk> been running 67% it looks like.

Speaker #4: But it's also been a solid business for us. It probably aided a little bit by the current events.

We were thinking that was the right trend here in 2026, but the guidance seems to imply about 2% to 3% SG&A growth. This year is there anything like how much of that is the annualized <unk> of a similar number of store opens.

Speaker #3: Understood. And then my follow-up question, Carl, is on the SG&A side. You mentioned that you're going to annualize—you'll have two back-to-back years of similar kind of unit growth.

Speaker #3: As you look at what's happened ex the lapping you'll lap Jordan the Jordan rollout and some of the costs that you put in on the advertising and the updates there.

There are some investments that are being dialed back or anything unique unique to get down to that math I know you mentioned the cadence of the year and and how the stores are going to be weighted so any additional detail on that would be helpful. As well. Thanks. So much.

Steve Lawrence: It probably aided a little bit by the current events.

Speaker #3: But you've been running six, seven percent, it looks like. We were thinking that was the right trend here in 2026. But the guidance seems to imply about 2% to 3% SG&A growth this year.

Christopher Horvers: Understood. My follow-up question, Carl, is on the SG&A side. You mentioned that, you know, you're gonna annualize. You'll have two back-to-back years of similar kinda unit growth. You know, as you look at what's happened, you know, ex the, you know, lapping, you'll lap Jordan, the Jordan rollout and some of the costs that you put in on the advertising and the updates there. But you've been running 6 to 7%, it looks like. We were thinking that was the right trend here in 2026, but the guidance seems to imply about 2 to 3% SG&A growth this year. Is there anything, like how much of that is the, you know, annualization of a similar number of store opens? Is there some investments that are being dialed back or anything unique to get down to that math?

Yes so.

The main driver of our SG&A growth has been the store increases and so as we move from 16 and 2024 to 20.

Speaker #3: Is there anything how much of that is the annualization of a similar number of store opens? Is there some investments that are being dialed back or anything unique to get down to that math?

Four in FY 'twenty five.

Outsized impact we're guiding 20% to 25, we think thats the right number for US next year, we feel good about all the openings.

<unk> not having the growth in the number of units it will be about 8% unit growth for us.

Speaker #3: I know you mentioned the cadence of the year and how the stores are going to be weighted. So any additional detail on that would be helpful as well.

It provides a good level.

Speaker #3: Thanks so much.

Leverage as it relates to next year's guidance at the midpoint, what's implied is modest leverage from an SG&A standpoint.

Speaker #4: Yeah. So the main driver of our SG&A growth has been the store increases. And so as we move from 16 in 2024 to 24 in FY25, that had an outsized impact.

I'll remind you that in Q1 of last of 2025, we had $75 million in the Jordan launch cost that was associated with primarily the 145 shop doors, that's going to be less.

Speaker #4: We're guiding 20 to 25. We think that's the right number for us next year. We feel good about all the openings. Simply not having the growth in the number of units, it'll be about an 8% unit growth for us.

Christopher Horvers: I know you mentioned the cadence of the year and how the stores are gonna be weighted, so any additional detail on that would be helpful as well. Thanks so much.

This year it'll be in Q2 not Q1.

Carl Ford: Yeah. The main driver of our SG&A growth has been the store increases. As we moved from 16 in 2024 to 20, 4 in FY 2025, that had an outsized impact. We're guiding 20 to 25. We think that's the right number for us next year. We feel good about all of the openings. Simply not having the growth in the number of units, it'll be about 8% unit growth for us, provides a good level of leverage. As it relates to next year's guidance at the midpoint, what's implied is modest leverage from an SG&A standpoint. I will remind you that in Q1 of 2025, we had $7.5 million in the Jordan launch cost that was associated with primarily the 145 shop doors.

And then overall like look we're looking for ways to leverage in the business and so they're doing.

Speaker #4: It provides a good level of leverage. As it relates to next year's guidance, at at the midpoint, what's implied is modest leverage from an SG&A standpoint.

Doing things smarter and more efficiently we found some automation opportunities.

That's helpful.

And we're going to have modest leverage next year at the midpoint.

Speaker #4: I will remind you that in Q1 of 2025, we had $7.5 million in the Jordan launch cost. That was associated with primarily the 145 shop doors.

Thanks, very much have a great spring.

Our next question comes from Simeon Gutman with Morgan Stanley. Your line is now live.

Speaker #4: That's going to be less this year. And it'll be in Q2, not Q1. And then overall, look, we're looking for ways to leverage in the business.

Good morning, guys.

If you look at 25 2025 in the rearview mirror.

Questionary spend was fairly light across the board for most end markets.

Speaker #4: And so things doing things smarter and more efficiently. We found some automation opportunities that's helpful. And we're going to have modest leverage next year at the midpoint.

But you were lapping easier compares and you did add a few initiatives, which.

Our working still seem promising so.

Speaker #3: Thanks very much. Have a great spring.

Looking at the following year and I appreciate the range and it's early and there's a lot of geopolitical things brewing.

Carl Ford: That's gonna be less this year, and it'll be in Q2, not Q1. Overall, like look, we're looking for ways to leverage in the business, and so doing things smarter and more efficiently. We found some automation opportunities that's helpful, and we're gonna have modest leverage next year at the midpoint.

Speaker #1: Our next question comes from Simeon Gutman with Morgan Stanley. Your line is now live.

But big picture the return to positive comps why do you think it's taking.

Speaker #5: Good morning, guys. So if you look at '25, 2025, and the rearview mirror, discretionary spend was fairly light across the board for most end markets.

As long as it is given the initiatives and the drivers.

And the confidence of landing maybe in the higher end of that range for this year. Thank you.

Speaker #5: But you were lapping easier initiatives, which are working, still seem promising. So looking at the following year, and I appreciate the range and it's early and there's a lot of geopolitical things brewing.

Yes, I think when we talked about guidance I mean, we were looking at.

Christopher Horvers: Thanks very much. Have a great spring.

The puts and takes I would say from a.

Operator 2: Our next question comes from Simeon Gutman with Morgan Stanley. Your line is now live.

Operator: Our next question comes from Simeon Gutman with Morgan Stanley. Your line is now live.

From a headwind perspective, I think that the consumer was under pressure as you've noted last year.

I think that persisted throughout most of the year and I think that was probably the one thing that stops us from getting all the way across the line to get to a positive comp I will note that we actually grew the top line last year, which is the first time since two.

Simeon Gutman: Good morning, guys. If you look at 25, 2025 in the rearview mirror, discretionary spend was fairly light across the board for most end markets. You know, you were lapping easier compares, and you did add a few initiatives which are working, still seem promising. You know, looking at the following year, I appreciate the range, and it's early, and there's a lot of geopolitical things brewing. You know, big picture, the return to positive comps, why do you think it's taking as long as it is, given the initiatives and the drivers and the confidence of landing maybe in the higher end of that range for this year? Thank you.

Speaker #5: But big picture, the return to positive comps, why do you think it's taking as long as it is given the initiatives and the drivers and the confidence of landing maybe in the higher end of that range for this year?

2021 that we've grown the topline so thats a good starting point, but we know delivering consecutive positive comps as the key moving forward. So that's why we really talked about some of the growth initiatives. We have both self help as well as some external.

Speaker #5: Thank you.

Speaker #4: Yeah, I think when we talked about guidance, I mean, we were looking at the puts and the takes. And I'd say from a headwind perspective, I think that the consumer was under pressure, as you noted last year.

You look at our Dot com business, that's been surging. It was up almost 14% last year I think we've got a really good foundational base. There we're going to continue to lean into that I think some of the most of the team is making and meeting a day I'm really going to help out there the new stores.

Speaker #4: I think that persisted throughout most of the year. And I think that was probably the one thing that stopped us from getting all the way across the line to get to a positive comp.

Speaker #4: I will note that we actually grew the top line last year, which is the first time since 2021 that we've grown the top line.

Did it get stronger right, we mentioned that our new stores that opened up from 22 to 24 around a mid single digit positive comp and we had roughly $25 26.

Speaker #4: So that's a good starting point. But we know delivering consecutive positive comps is the key moving forward. So that's why we really talked about some of the growth initiatives we have, both self-help as well as some external you look at our dot-com business.

Steve Lawrence: Yeah. I think when we talked about guidance, Simeon, we were looking at, you know, the puts and the takes. I'd say from a headwind perspective, I think that the consumer was under pressure, as you noted last year. I think that persisted throughout most of the year, and I think that was probably the one thing that stopped us from getting all the way across the line to get to positive comp. I will note that we actually grew the top line last year, which is the first time since 2021 that we've grown the top line. That's a good starting point. We know delivering consecutive positive comps is the key moving forward. That's why we really talked about some of the growth initiatives we have, both self-held as well as some external.

We're feeling that last year that number doubles this year as more stores fill in the comp base that becomes increasing tailwind.

Underestimate the impact of this loyalty credit card relaunch.

Speaker #4: That's been surging. It was up almost 14% last year. I think we've got a really good foundational base there. We're going to continue to lean into that.

Integration, that's a big big deal for US It was granted.

<unk> kind of two separate programs based off when we launched domestic integrating it I think is really going to allow us to start delivering.

Speaker #4: I think some of the teams making and leaning into AI are really going to help out there. The new stores continue to get stronger, right?

Value to the consumer.

Speaker #4: We mentioned that our new stores that opened up from '22 to '24 ran a mid-single digit positive comp. And we had roughly 25, 26 that were feeling that last year.

And then you think about other things we've got some outside growth in some categories. We're carrying like work in western one of those or training lifestyle.

Initiatives out there that we're really doubling down on this year continuing to lean in newness with all the things we mentioned on the call and then you've got the external tailwind like the tax refunds World Cup and then obviously the 250 <unk> anniversary United States. So we feel like we've got a really good.

Speaker #4: That number doubles this year as more stores fill in the comp base. So that becomes an increasing tailwind. Can't underestimate the impact of this loyalty credit card relaunch and integration.

Steve Lawrence: You know, you look at our dotcom business, that's been surging. It was up almost 14% last year. We think we've got a really good foundational base there. We're gonna continue to lean into that. I think some of the moves the team's making and leaning into AI are really gonna help out there. The new stores continue to get stronger, right? We mentioned that our new stores that opened up from 2022 to 2024 ran a mid-single-digit positive comp, and we had roughly 25, 26 that we opened last year, that number doubles this year as more stores fill in the comp base. That becomes an increasing tailwind. Can't underestimate the impact of this loyalty credit card relaunch and integration. That's a big, big deal for us. It was ran as kinda two separate programs based off when we launched them.

Speaker #4: That's a big, big deal for us. It was a ran us kind of two separate programs based off when we launched them. I think integrating it, I think, is really going to allow us to start delivering value to the consumer.

Point of view around what we think the headwinds are we think we got a lot of self help as well as external tailwind to allow us to get back to positive comps we think.

Speaker #4: And then you think about other things. We've got some outsized growth in some categories we're carrying, like work in Western, where those are trending lifestyle initiatives out there that were really doubling down on this year.

Okay.

Thanks, and a follow up the store economic model. If you step back how is the profitability ramp of the newer stores and then given the lighter comp backdrop.

Speaker #4: Continuing to lean into newness with all the things we’ve mentioned on the call. And then you’ve got the external tailwinds, like the tax refunds, World Cup, and then obviously the 250th anniversary of the United States.

How do you think of the year two year three stores in the economic model the returns producing the way you thought.

Steve Lawrence: I think integrating it, I think, is really gonna allow us to start delivering value to the consumer. You think about other things. We've got some outsized growth in some categories we're carrying, like work and western wear. Those are trending lifestyle initiatives out there that we're really doubling down on this year. Continue to lean in newness with all the things we've mentioned on the call. You've got the external tailwinds like the tax refunds, World Cup, and obviously the 250th anniversary of the United States. We feel like we've got a really good point of view around what we think the headwinds are. We think we got a lot of self-help as well as external tailwinds that allow us to get back to positive comps. We think this is the year that happens.

Speaker #4: So, we feel like we've got a really good point of view around what we think the headwinds are. We think we've got a lot of self-help, as well as external tailwinds, that allow us to get back to positive comps.

Yeah. Thanks for asking so our stores in year, one are performing a little bit better than what we anticipated and with mid single digit comps for those that are in the comp set and that's that's after the 14th month at the end of the comps.

Speaker #4: We think this is the year that happens.

Speaker #5: Thanks. And a follow-up, the store economic model, if you step back, how is the profitability ramp of the newer stores? And then given the lighter comp backdrop, how do you think of the year two, year three stores or the economic model or the returns producing the way you thought?

They're performing well so we're pretty pleased with it.

We've seen some opportunities to infill and in legacy in existing markets. Those typically perform a little bit better than those in our newer markets, where we're establishing brand awareness from an economic model standpoint from a capex standpoint, it's two and a half to $3 5 million of net.

Speaker #4: Yeah, thanks for asking. So our stores in year one are performing a little bit better than what we anticipated. And with mid-single-digit comps for those that are in the comp set—and that's after the 14th month that they enter the comp set—they're performing well.

Simeon Gutman: Thanks. A follow-up. The store economic model, if you step back, how is the profitability ramp of the newer stores? You know, given the lighter comp backdrop, how do you think of the year two, year three stores of the economic model with the returns producing the way you thought?

Capex and then we invest in the incremental inventory there too we expect a 20% ROIC from a multiyear standpoint from a growth trajectory. What we're seeing is that they continue to grow in.

Speaker #4: So, we're pretty pleased with it. We've seen some opportunities to infill in legacy and existing markets. Those typically perform a little bit better than those in our newer markets, where we're establishing brand awareness.

In the legacy markets, it's pretty steady growth in the new markets. When you look at those that are in the comp set they're growing well into years, two and three as well. So again, we like what we're seeing we've learned a ton over over time since we started the launch.

Carl Ford: Yeah. Thanks for asking. Our stores in year one are performing a little bit better than what we anticipated. With mid-single digit comps for those that are in the comp set, and that's after the 14th month that they enter the comp set, they're performing well. We're pretty pleased with it. We've seen some opportunities to infill in legacy and existing markets. Those typically perform a little bit better than those in our newer markets where we're establishing brand awareness. From an economic model standpoint, from a CapEx standpoint, it's $2.5 to 3.5 million of net CapEx, and then we invest in incremental inventory there too. We expect a 20% ROIC.

Speaker #4: From an economic model standpoint, from a CAPEX standpoint, it's two and a half to three and a half million dollars of net CAPEX. And then we invest some incremental inventory there too.

In 2022, and we feel really good about the 2026 cohort.

Speaker #4: We expect a 20% ROIC from a multi-year standpoint, from a growth trajectory. What we're seeing is that they continue to grow. In the legacy markets, it's pretty steady growth.

Thanks, Good luck see you in a couple of weeks. Thank.

Thanks, Andrew.

Our next question comes from John <unk> with Guggenheim Securities. Your line is now live.

Speaker #4: And then in the new markets, when you look at those that are in the comp set, they're growing well into years two and three as well.

Hey, guys wanted to start with.

This year, the the waterfall effect of new stores, it looks like that could be 60, or 70 basis points something like that.

Speaker #4: So again, we like what we're seeing. We've learned a ton over time since we started launching in 2022, and we feel really good about the 2026 cohort.

Single digit is that fair.

Carl Ford: From a multiyear standpoint from a growth trajectory, what we're seeing is that they continue to grow. In the legacy markets, it's pretty steady growth. In the new markets, when you look at those that are in the comp set, they're growing well into years 2 and 3 as well. Again, we like what we're seeing. We've learned a ton over time since we started launching in 2022, and we feel really good about the 2026 cohort.

Does that sort of suggest.

Mature stores do you think will be flattish.

And then the.

Speaker #1: Thanks. Good luck. See you in a couple of weeks.

The impact of loyalty and and.

Speaker #4: Thanks, Simeon.

Mastercard launch could that be as impactful.

Speaker #1: Our next question comes from John Heinbachl with Guggenheim Securities. Your line is now live.

As the waterfall.

How would you just sort of compare the two.

I think you are in the right range, John I think that.

Speaker #6: Hey, guys. I wanted to start with this year, the waterfall effect of new stores looks like that could be 60 or 70 basis points, something like that at a mid-single digit.

We saw mid single digit growth last year in the 'twenty two through 'twenty four vintage of stores.

You multiply that times percentage they contribute.

Speaker #6: Is that fair? Does that sort of suggest mature stores you think will be flattish? And then the impact of loyalty and the Mastercard launch, could that be as impactful as the waterfall?

It's probably about a 30 basis point tailwind last year that'll probably come close to doubling this year and I think you can assume a very similar sort of lift or oil.

Simeon Gutman: Thanks. Good luck. See you in a couple weeks.

Carl Ford: Thanks, Simeon Gutman.

Operator 2: Our next question comes from John Heinbockel with Guggenheim Securities. Your line is now live.

Operator: Our next question comes from John Heinbockel with Guggenheim Securities. Your line is now live.

Royalty relaunch and remind you that's only for about a half a year, because we're really kind of kicking the full relaunch off heading into father's day. So we'll also get the benefit of that as we lap.

John Heinbockel: Hey, guys. Wanted to start with this year, the waterfall effect of new stores. Looks like that could be 60 or 70 basis points or something like that at a mid-single digit. Is that fair? You know, does that sort of suggest, you know, mature stores you think will be flattish? The impact of loyalty and the Mastercard launch, could that be as impactful as the waterfall? How would you sort of compare the two?

Speaker #6: How would you sort of compare the two?

Speaker #4: I think you're in the right range, John. I think that we saw a mid-single digit growth last year in the 22 through 24 vintage of stores.

In the first half of next year as well so we're really excited about both those initiatives.

And then maybe as a follow up.

I know, there's been a lot of opportunity with regard to supply chain.

Speaker #4: And you multiply that times the percentage they contribute. It was probably about a 30 basis point tailwind last year. That'll probably come close to doubling this year.

Which is I guess been pushed out a little bit.

The current update on.

Speaker #4: And I think you can assume a very similar sort of lift for the loyalty relaunch. And mind you, that's only for about half a year, because we're really kind of kicking the full relaunch off heading into Father's Day.

I guess all of the initiatives and some of it right as technology. Some of it is the throughput but.

Steve Lawrence: I think you're in the right range, John. I think that, you know, we saw mid-single digit growth last year in the 2022 through 2024 vintage of stores. You know, you multiply that times the percentage they contributed, you know, it's probably about a 30 basis point tailwind last year that'll probably come close to doubling this year.

Where are we on that where are we tracking.

Speaker #4: So, we'll also get the benefit of that as we lap the first half of next year as well. So, we're really excited about both those initiatives.

Yes, so from a supply chain standpoint, I'll get to the future facing in a second but we did see the majority of our gross margin gains in the fourth quarter through the supply chain.

Speaker #6: And then, maybe as a follow-up—I know there's been a lot of opportunity with regard to supply chain, which I guess has been pushed out a little bit.

Some was from.

Lapping I don't even know if people remember this but in Q3 and Q4, there was proposed east coast Port strikes and we took the mitigating activities we were up against those.

John Heinbockel: Yep.

Carl Ford: Yep.

Steve Lawrence: I think you can assume a very similar sort of lift for the loyalty relaunch. Mind you, that's only for about a half a year because we're really kinda kicking the full relaunch off heading into Father's Day. We'll also get the benefit of that as we lap the first half of next year as well. We're really excited about both those initiatives.

Speaker #6: What's the current update on I guess all of the initiatives and some of it, right, is technology. Some of it is throughput. But where are we on that?

The efficiency that we saw at the efficiencies that we saw in Q4 2025 was more than just the lapping.

And I think Rod Powell, our chief supply chain officers doing a great job as it relates to driving efficiencies out of transportation as well as D. C efficiency, so moving forward.

Speaker #6: Where are we tracking?

Speaker #4: Yeah. So from a supply chain standpoint, I'll get to the future-facing in a second. But we did see the majority of our gross margin gains in the fourth quarter through the supply chain.

John Heinbockel: Maybe as a follow-up, I know there's been a lot of opportunity with regard to supply chain, you know, which is, I guess, been pushed out a little bit. What's the current update on, you know, I guess all of the initiatives? Some of it, right, is technology, some of it is throughput. You know, where are we on that? Where are we tracking?

I think I'd like to couch the majority of the ongoing benefit because we are going to contextualize that in the analyst day on April seven, but we have rolled out one of our distribution centers on.

Speaker #4: Some was from lapping I don't even know if people remember this, but in Q3 and Q4, there was proposed East Coast port strikes. And we took some mitigating activities.

Speaker #4: We were up against those. The efficiency that we saw, the efficiencies that we saw in Q4 of 2025 was more than just the lapping.

The Manhattan active.

Warehouse management program, we are looking to slay the Kt distribution center and the Cookeville distribution Center later, it will not be in 2026.

Carl Ford: Yeah. From a supply chain standpoint, I'll get to the future facing in a second. We did see the majority of our gross margin gains in Q4 through the supply chain. Some was from lapping. I don't even know if people remember this, but in Q3 and Q4, there was proposed East Coast port strikes, and we took some mitigating activities. We were up against those. The efficiencies that we saw in Q4 2025 was more than just the lapping. I think Rob Howell, our Chief Supply Chain Officer, is doing a great job as it relates to driving efficiencies out of transportation as well as DC efficiency.

Speaker #4: And I think Rob Howell, our Chief Supply Chain Officer, is doing a great job as it relates to driving efficiencies out of transportation, as well as DC efficiency.

We've got some pretty good efficiencies that are going on there right now based on the unitary management, there and that is implied within the guidance as it relates to beyond that I still feel really good about the supply chain efficiencies.

Speaker #4: So moving forward, I think I’d like to couch the majority of the ongoing benefit, because we’re going to contextualize that in the Analyst Day on April 7th.

That we spoke about previously, but I'd like to give you more color. If you don't mind I'd like to wait until April seven speak to beyond 2026.

Speaker #4: We have rolled out one of our distribution centers on the Manhattan Active Warehouse Management program. We are looking to slate the Katy Distribution Center and the Cookville Distribution Center later.

Sure. Thank you.

Thank you.

Okay.

Our next question comes from Brian Nagel with Oppenheimer.

Speaker #4: It will not be in 2026. We've got some pretty good efficiencies that are going on there right now, based off the unitary management there.

Carl Ford: Moving forward, I think I'd like to couch the majority of the ongoing benefit because we're gonna contextualize that in the Analyst Day on 7 April. We have rolled out one of our distribution centers on the Manhattan Active warehouse management program. We are looking to slate the Katy distribution center and the Cookeville distribution center later. It will not be in 2026. We've got some pretty good efficiencies that are going on there right now based off the inventory management there, and that is implied within the guidance. As it relates to, you know, beyond that, I still feel really good about the supply chain efficiencies that we spoke about previously. I'd like to give you more color, if you don't mind.

Your line is now live.

Hi, Good morning, Thank you for taking my question.

So I want to.

Speaker #4: And that is implied within the guidance. As it relates to beyond that, I still feel really good about the supply chain efficiencies. es. That we spoke about previously, but I'd like to give you more color if you don't mind.

A lot of questions and a lot of focus on just this path towards consistent positive comps.

At Academy and so we're able to frame the question is.

Today, we're hearing in the last few quarters I mean, it seems as though the.

Speaker #4: I'd like to wait until April 7th to speak to beyond 2026. Thank you.

The tools, if you will to get there are taking shape, you've got the new stores in the new product launches e-commerce separate et cetera. So.

Speaker #1: Our next question comes from Brian Nagel with Oppenheimer. Your line is now live.

But we're still kind of.

Not there yet.

Question why is there something in the business, maybe aside from more difficult macro backdrop, but is there something in the business.

Speaker #5: Hi. Good morning. Thank you for taking my question. So I want to look, a lot of questions, and a lot of focus on just this path towards consistent positive comps.

Kind of offsetting all those positives there taking shape that is becoming a bigger headwind for <unk>.

Carl Ford: I'd like to wait until 7 April to speak to beyond 2026.

Speaker #5: At Academy. And so the way I want to frame the question is, today we're hearing in the last few quarters, I mean, it seems as though the tools, if you will, to get there are taking shape.

Push towards positive comps.

John Heinbockel: Sure. Thank you.

Carl Ford: Thanks.

I would say if you go back and look at 2025 in a vacuum.

Steve Lawrence: Thank you.

Operator 2: Our next question comes from Brian Nagel with Oppenheimer. Your line is now live.

Operator: Our next question comes from Brian Nagel with Oppenheimer. Your line is now live.

Probably one of the bigger headwinds, we face with ammo.

Speaker #5: You got the new stores and the new product launches. E-commerce effort, etc. So but we're still kind of not there yet. The question is, is there something in the business, maybe aside from more difficult macro backdrop, but is there something in the business that is kind of offsetting all those positive they're taking shape that is becoming a bigger headwind for Academy and its push towards positive comps?

That's a big business for us it does move the needle.

Brian Nagel: Hi, good morning. Thank you for taking my question.

And there are a lot of events that kind of drove that business and 24 that werent there in 'twenty five.

Operator 2: Okay.

Brian Nagel: Okay.

Brian Nagel: I want to. You know, look, a lot of questions and a lot of focus on, you know, just this path towards consistent positive comps, you know, at Academy. The way I want to frame the question is, you know, today we're hearing, and, you know, in the last few quarters, I mean, it seems as though the tools, if you will, to get there are, you know, taking shape. You got the new stores and the new product launches, e-commerce effort, et cetera. But we're still, you know, kinda, you know, not there yet.

But outside of that I would say.

There is nothing I would point to outside of just getting these.

Initiatives and strategies really mature and starting to contribute only I think thats the thing thats going to allow us to break those out of comp and Thats why were excited about all the different initiatives, but together, we're seeing really good green shoots beneath the surface on all the initiatives, we talked about and we think this is the year, where all those things kind of culminate and pulled together and get us.

Speaker #4: I would say if you go back and look at 2025 in a vacuum, probably one of the bigger headwinds we faced was ammo. That's a big business for us.

Brian Nagel: The question why is there something in the business, maybe aside from more difficult macro backdrop, but is there something in the business that, you know, is kind of offsetting all those positives that are taking shape that is becoming a bigger headwind for Academy and its, you know, push towards positive comps?

Speaker #4: It does move the needle. And there were a lot of events that kind of drove that business in '24 that weren't there in '25.

Across the line. So we're seeing momentum in the business coming out of Christmas into the first part of this year.

Speaker #4: But outside of that, I would say there's nothing I would point to outside of just getting these initiatives and strategies really mature and starting to contribute fully.

We want to be very muted about what we see from a consumer backdrop out there.

But.

We're encouraged by what we're seeing and we think that.

Speaker #4: I think that's the thing that's going to allow us to break through and post positive comps. And that's why we're excited about all the different initiatives put together.

Steve Lawrence: I would say if you go back and look at 2025 in a vacuum, probably one of the bigger headwinds we faced was ammo. You know, that's a big business for us. It does move the needle. And there were a lot of events that kind of drove that business in 2024 that weren't there in 2025. But outside of that, I would say there's nothing I would point to outside of just getting these initiatives and strategies really mature and starting to contribute fully. I think that's the thing that's gonna allow us to break through and post positive comps. That's why we're excited about all the different initiatives we put together. You know, we're seeing really good green shoots beneath the surface on all the initiatives we've talked about.

The culmination of all of those initiatives is what it's going to take to get us there.

I want I, just want to I agree with everything Steve said the primary headwind is the.

Speaker #4: We're seeing really good green shoots beneath the surface on all the initiatives we've talked about. And we think this is the year where all those things kind of culminate and pull together and get us across the line.

Economic health.

Financial health of the American consumer.

Speaker #4: So we're seeing momentum in the business coming out of Christmas into the first part of this year. We want to be very muted about what we see from a consumer backdrop out there.

That is what is moving against E com being up 13, 6% new stores mid single digit comps Nike and Jordan taken together, because we didn't have a jordan the previous year up high single digits.

Speaker #4: But we're encouraged by what we're seeing, and we think that the culmination of all those initiatives is what it's going to take to get us there.

That headwind.

Except for the category of ammo that Steve spoke to.

Speaker #5: I just want to I agree with everything Steve said. The primary headwind is the economic health, the financial health of the American consumer. That is what is moving against e-comm being up 13.6%.

Is the financial health of the American consumer and Thats embedded within our guidance. So we feel great about the initiatives moving forward, but look I'm seeing credit card delinquencies at.

Steve Lawrence: We think this is the year where all those things kind of culminate and pull together and get us across the line. You know, we're seeing momentum in the business coming out of Christmas into the first part of this year. We wanna be very muted about what we see from a consumer backdrop out there. But you know, we're encouraged by what we're seeing, and we think that the culmination of all those initiatives is what it's gonna take to get us there.

Double what they were at the end of 2024.

Speaker #5: New stores mid-single digit comps. Nike and Jordan taken together because we didn't have a Jordan the previous year up high single digits. That headwind except for the category of ammo that Steve spoke to is the financial health of the American consumer.

I feel job.

Growth in America is not going to be strong in 2026, I think gas staying high we're just really conscious of.

Carl Ford: I agree with everything Steve said. The primary headwind is the economic health, the financial health of the American consumer. You know, that is what is moving against e-com being up 13.6%. New stores, mid-single digit comps. You know, Nike and Jordan taken together because we didn't have a Jordan the previous year, up high single digits. You know, that headwind, except for the category of ammo that Steve spoke to, is the financial health of the American consumer. That's embedded within our guidance. We feel great about the initiatives moving forward. But look, I'm seeing credit card delinquencies at, you know, double what they were at the end of 2024.

Our headwind associated with financial health.

Yeah, that's very helpful. So Karl I guess my follow up would be.

Speaker #5: And that's embedded within our guidance. So, we feel great about the initiatives moving forward. But look, I'm seeing credit card delinquencies at double what they were at the end of 2024.

Just you made the comment just a second ago about gas prices. So obviously, a very big focus right now for the market I mean, a lot of questions of how high the duration, but given the nature of your business or consumer annual given where your stores are generally located.

Speaker #5: I feel job growth in America is not going to be strong in 2026. I think that gas staying high, we're just really conscious of a headwind associated with financial health.

Historically have you seen a higher elevated oil and gas prices more of it.

Friend or foe.

Your consumers.

Yes.

I'll jump in here, Brian I would tell you that obviously gas prices being high is not good for our discretionary spending in America right. I mean, that's not a good thing for us or for any of our <unk>.

Speaker #6: No, that's very helpful. And so Carl, I guess my follow-up will be, just to you made the comment just a second ago about gas prices.

Speaker #6: So, obviously a very big focus right now for the market—a lot of questions about how high and the duration. But given the nature of your business or consumer, and given where your stores are generally located, historically, have you seen higher or elevated oil or gas prices as more of a friend or foe for your consumers?

<unk>.

Carl Ford: I feel job growth in America is not going to be strong in 2026. I think that gas staying high, we're just really conscious of a headwind associated with financial health.

Because it just takes more share of wallet from the consumer on the flip side to that.

The point I think you are alluding to I mean, we have a big base of stores in Texas.

Oil prices lead to higher rig count higher rig count leads to higher employment in the oil patch and match, sometimes can be a tailwind for us. So we're not going to prognosticate on how long this is going to take or how long. This is going to play out.

Brian Nagel: No, that's very helpful. Carl, I guess my follow-up will be, you know, just to... You made the comment just a second ago about gas prices. Obviously a very big focus right now for the market. I mean, a lot of questions of, you know, how high and the duration. You know, given the nature of your business or consumer and, you know, given where your stores are generally located, or historically, have you seen a higher or elevated oil or gas prices more of a friend or foe for your consumers?

Speaker #4: Yeah. I'll jump in here, Brian. I would tell you that obviously gas prices being high is not good for a discretionary spending in America, right?

But there are definitely puts and takes.

What's going on in the world today.

Got a question earlier about the impact on some of our categories ammo tends to be one of the CAGR can react positively and while we haven't that's why this happened. So we're watching it closely we're not trying to prognosticate about what's going to happen in the war, but we think we've got a really good balanced approach based off of.

Speaker #4: I mean, that's not a good thing for us or for any of our competitors, because it just takes more to share a wallet from the consumer. On the flip side,

Speaker #4: To the point I think you're alluding to: I mean, we have a big base of stores in Texas. And higher oil prices lead to higher rig count, and higher rig count leads to higher employment in the oil patch.

Backdrop that Carl mentioned as well as the self help initiatives that we have internally to help us overcome those headwinds.

Steve Lawrence: Yeah, I'll jump in here, Brian. I would tell you that, obviously, gas prices being high is not good for discretionary spending in America, right? I mean, that's not a good thing for us or for any of our competitors, 'cause it just takes more share of wallet from the consumer. On the flip side, to the point I think you're alluding to, I mean, we have a big base of stores in Texas and higher oil prices lead to higher rig count. Higher rig count leads to higher employment in the oil patch, and that sometimes can be a tailwind for us. We're not gonna prognosticate on how long this is gonna take or how long this is gonna play out. But there are definitely puts and takes with what's going on in the world today.

Speaker #4: And that sometimes can be a tailwind for us. So we're not going to prognosticate it along how long this is going to take or how long this is going to play out.

Okay very helpful. I appreciate that color. Thank you.

Speaker #4: But there are definitely puts and takes with what's going on in the world today. I mean, we got a question earlier about the impact on some more categories.

Thanks.

Our next question comes from Michael Lasser with UBS. Your line is now live.

Speaker #4: And ammo tends to be one of those categories that reacts positively when we have events like this happen. So we're watching it closely.

Good morning. Thank you so much for taking my question I wanted to mention some of the puts and takes on your sales outlook for this year.

Speaker #4: We're not trying to prognosticate about what's going to happen in the war. But we think we've got a really good balanced approach based off of the backdrop that Carl mentioned as well as the self-help initiatives that we have internally to help us overcome those headwinds.

In your remarks, you talked about.

A two to 300 basis points swing from the low end to the high end of that guide based on macro factors and yet you're also pointing to some good guys from the macro whether it's tax refunds the World Cup or the 250 <unk>.

Steve Lawrence: I mean, we got a question earlier about, you know, the impact on some of our categories. Ammo tends to be one of those categories that reacts positively when we have events like this happen. We're watching it closely. We're not trying to, you know, prognosticate about what's gonna happen in the war. We think we've got a really good balanced approach based off of the backdrop that Carl mentioned, as well as the self-help initiatives that we have internally to help us overcome those headwinds.

Speaker #6: Very helpful. I appreciate all the color. Thank you.

Speaker #4: Thanks.

Speaker #1: Our next question comes from Michael Lasser with UBS. Your line is now live.

Anniversary celebration. So are you factoring in around two to 300 basis points of a contribution from those factors. So a year from now.

Speaker #7: Good morning. Thank you so much for taking my question. I wanted to mention some of the puts and takes on your sales outlook for this year.

When we are having this conversation.

Speaker #7: Carl, in your remarks, you talked about a 2 to 300 basis point swing from the low end to the high end of the guide based on macro factors.

You're going to have to dimension, how much of your performance in 2026.

Brian Nagel: Yeah, very helpful. I appreciate the color. Thank you.

Just on what Academy is doing versus how much was based on macro.

Steve Lawrence: Thanks.

Operator 2: Our next question comes from Michael Lasser with UBS. Your line is now live.

Operator: Our next question comes from Michael Lasser with UBS. Your line is now live.

Speaker #7: And yet you're also pointing to some good guys from the macro, whether it's tax refunds, the World Cup, or the 250th anniversary celebration. So are you factoring in around 2 to 300 basis points of a contribution from those factors?

Be very helpful to understand what you assumed within your outlook. Thank you.

Michael Lasser: Good morning. Thank you so much for taking my question. I wanted to mention some of the puts and takes on your sales outlook for this year. Carl, in your remarks, you talked about a 200 to 300 basis point swing from the low end to the high end of the guide based on macro factors. Yet you're also pointing to some good guides from the macro, whether it's tax refunds, the World Cup, or the 250th anniversary celebration. Are you factoring in around 200 to 300 basis points of a contribution from those factors?

Yes, So we started with what what our plan is and it's not a range. It's it's what we think we're going to deliver and so our self help initiatives our self help initiatives. So the things that we're talking to you about new stores ecommerce.

Speaker #7: Because for a year from now, when we are having this conversation, we're going to have to dimension how much of your performance in 2026 is based on what Academy is doing versus how much was based on macro and it will be very helpful to understand what you assumed within your outlook.

Aided by all the things that Steve said the loyalty program. These things that that we're launching and in some cases building upon it gets us to the midpoint of that 2% to 5% guidance range and so I think that at the low end, we anticipate that macroeconomic factors stay the.

Speaker #7: Thank you.

Speaker #4: Yeah. So we started with what our plan is. And it's not a range. It's what we think we're going to deliver. And so our self-help initiatives, so the things that we're talking to you about, new stores, e-commerce, aided by all the things that Steve said, the loyalty program, these things that we're launching and in some cases building upon, it gets us to the midpoint of that 2 to 5 percent guidance range.

Same.

Uh huh.

Tailwind associated with those three big events that you just mentioned World Cup $2 50, an elevated tax refunds are completely negate goodbye and macro headwinds at the top and the 5%.

Michael Lasser: Because a year from now, when we are having this conversation, we're gonna have to dimension how much of your performance in 2026 is based on what Academy's doing versus how much was based on the macro, and it would be very helpful to understand what you assume within your outlook. Thank you.

<unk> macro events, there's three things outweigh.

The headwind associated with financial pressure on the consumer and that.

Carl Ford: We started with what, you know, what our plan is, and it's not a range, it's what we think we're gonna deliver. Our self-help initiatives, so the things that we're talking to you about, new stores, e-commerce. You know, aided by all the things that Steve said, the loyalty program, these things that we're launching and in some cases building upon, it gets us to the midpoint of that 2 to 5% guidance range. I think that at the low end, we anticipate that macroeconomic factors stay the same, and that the tailwinds associated with those three big events that you just mentioned, World Cup, 250th, and elevated tax refunds, are completely negated by macro headwinds.

Speaker #4: And so, I think that at the low end, we anticipate that macroeconomic factors stay the same, and that the tailwinds associated with those three big events that you just mentioned—World Cup, 250th, and elevated tax refunds—are completely negated by macro headwinds.

They give us a little bit of a net tailwind if you will so our self help initiatives mid points.

The three things that are macro drivers.

Would be overwhelmed by financial pressure, the consumer or will we will gain some from and that was really what differentiated the 2% to 5%.

Speaker #4: At the top end, the 5%, those macro events, those three things, outweigh the headwind associated with financial pressure on the consumer. And that they give us a little bit of a net tailwind, if you will.

Low high guidance.

No question.

The other thing I would say is that when you think about the value of the external tailwind sort of some of the self help self help are much greater than the external.

Speaker #4: So our self-help initiatives, midpoints, the three things that are macro drivers are either going to be overwhelmed by financial pressure of the consumer or will gain some from.

We think the World Cup is probably worth about 30 basis points for the year.

That being said we think that.

<unk>.

Loyalty credit card alone.

Carl Ford: At the top end, the 5%, those macro events, those three things outweigh the headwind associated with financial pressure on the consumer, and that they give us a little bit of a net tailwind, if you will. Our self-help initiatives, midpoints, the three things that are macro drivers are either gonna be overwhelmed by financial pressure of the consumer or will gain some from. That was really what differentiated the 2% to 5% low high guidance.

Put up this year with having a happier next year, so that should mute or overcome whatever we'd be up against the World Cup perspective.

Speaker #4: And that was really what differentiated the 2% to 5% low-high guidance. I'll tag on to this question, Michael. The other thing I would say is that when you think about the value of the external tailwinds versus the self-help, the self-help are much greater than the external.

Tax refunds will be repeated I don't think those are going to be lower next year.

So then they come back to.

250, <unk> anniversary of United States.

Helpful. I mean, it certainly can drive a surge in patriotism and help us with red White and blue, but it's not it's not as big as the impact of the new store comp waterfall impact of Dot com on our business. So I would say the majority of what gives us confidence this year about being able to bend the curve to get back to a positive comp and self help finish.

Speaker #4: We think the World Cup is probably worth about 30 basis points for the year. That being said, we think that just the loyalty credit card alone is equal to that this year, with having a half year next year.

Steve Lawrence: I'll tag on to this question, Michael.

Speaker #4: So that should mute or overcome whatever we'd be up against from a World Cup perspective. Tax refunds will be repeated. I don't think those are going to be lower next year.

<unk> are going to drive it.

Carl Ford: Okay.

Michael Lasser: Okay.

Steve Lawrence: Um, uh...

Carl Ford: Thank you.

Michael Lasser: Thank you.

Steve Lawrence: The other thing I would say is that when you think about the value of the external tailwinds versus the self-help, self-help are much greater than the external. You know, we think the World Cup is probably worth about 30 basis points for the year. That being said, we think that just the loyalty credit card alone is equal to that this year with having a half year next year. That should mute or overcome whatever we'd be up against from a World Cup perspective. Tax refunds will be repeated. I don't think those are gonna be lower next year. You come back to, you know, 250th anniversary of the United States. That's helpful. I mean, it certainly can drive a surge of patriotism and help us with red, white, and blue.

Got you very very helpful. My follow up question is the changing nature of the Academy model pivoting to maybe a slightly higher income.

Speaker #4: And so, then you come back to the 250th anniversary of the United States. That's helpful. I mean, it's certainly going to drive a surge in patriotism and help us with red, white, and blue.

Right.

Speaker #4: But it's not as big as the impact of the new store comp waterfall, the impact of dot-com on our business. So I would say that the majority of what gives us confidence this year about being able to bend the curve and get back to a positive comp is the self-help initiatives are going to drive it.

Your vendors.

Vendor base that might have a higher expectation.

Or how you showcase their products.

As a result is that.

Drive and increase your operating expenses, because if we look at your.

Speaker #6: Got you. Very, very helpful. My follow-up question is the changing nature of the Academy model pivoting to maybe a slightly higher income. And a slightly higher vendor base that might have a higher expectation for how you showcase their products.

Results in the fourth quarter gross profit dollars actually exceeded the consensus forecast, but operating income was a bit short and it really all came down to SG&A and the question is are you seeing less visibility in your SG&A dollars as you pivot to maybe a more higher.

Steve Lawrence: you know, it's not as big as the impact of the new store comp waterfall, the impact of dot-com on our business. I would say that majority of what gives us confidence this year about being able to bend the curve and get back to a positive comp is the self-help initiatives are gonna drive it.

Getting cost model as we both have you seen it thank you very much.

Speaker #6: So as a result, is that drive an increase in your operating expenses? Because if we look at your results in the fourth quarter, your gross profit dollars, actually exceeded the consensus forecast about operating income was a bit short.

Yeah, I don't think there is an elevated operating cost model.

Michael Lasser: Got you. Very, very helpful. My follow-up question is the changing nature of the Academy model pivoting to maybe a slightly higher income and a slightly higher vendor base that might have a higher expectation for how you showcase their products. Does that drive an increase in your operating expenses? Because if we look at your results in Q4, your gross profit dollars actually exceeded the consensus forecast, but operating income was a bit short, and it really all came down to SG&A. The question is, are you seeing less visibility in your SG&A dollars as you pivot to maybe a more, a higher operating cost model as a result of these changes? Thank you very much.

There are some launch costs, which I'll walk through for Jordan associated with rolling out the shops and.

And then we do have a.

Jordan enthusiasts that staff some key time periods.

But I really wouldn't point to elevated operating costs is the issue.

Speaker #6: And it really all came down to SG&A. And the question is, are you seeing less visibility in your SG&A dollars as you pivot to maybe a higher operating cost model as a result of these changes?

I think in looking at the consensus for the fourth quarter from an SG&A rate standpoint.

We do still pay people when we close our stores. So that was 100 basis point headwind to the fourth quarter comps, we still incur some of those costs without having.

Speaker #6: Thank you very much.

Speaker #4: Yeah. I don't think there's an elevated operating cost model. Again, there are some launch costs, which I've walked through for Jordan associated with rolling out the shops.

The sales that they provide.

But the majority I mean.

Almost twice as much of the deleverage of 135 basis points in the fourth quarter was because of our growth initiatives that we're pretty committed to those will normalize as it relates to the number of stores year over year in the 2026, which is why we are.

Speaker #4: And then we do have a Jordan enthusiast that staffs on key time periods. For that. But I really wouldn't point to elevated operating costs as the issue.

Speaker #4: I think in looking at the consensus for the fourth quarter from an SG&A rate standpoint, we do still pay people when we close our stores.

Guiding to modest leverage in SG&A in 2026 <unk> thing.

Carl Ford: Yeah. I don't think there's an elevated operating cost model. Again, there are some launch costs, which I've walked through for Jordan, associated with rolling out the shops. Then we do have a Jordan enthusiast that staffs on key time periods for that. I really wouldn't point to elevated operating costs as the issue. I think in looking at the consensus for the Q4 from an SG&A rate standpoint, we do still pay people when we close our stores. If that was a 100 basis point headwind to the Q4 comp, we still did incur some of those costs without having the sales that they provide.

Thing I would add on to Karl's points I agree with everything you said is that our cordless and where our value retail we're not getting away from that I want to make sure that we don't leave any doubt in anybody's mind that we're losing focus on that I think we're in an environment, where the lower end consumer under 50, K is really under pressure is opting out or trading down.

Speaker #4: So if that was 100 basis point headwind to the fourth quarter comp, we still did incur some of those costs without having the sales that they provide.

Speaker #4: But the majority, I mean, almost twice as much of the deleveraged, 135 basis points in the fourth quarter was because of our growth initiatives that were pretty committed to.

Still actively market to them, we want them to shop with us and I think we see them come back during times of deep value like run clearance events or when were in a promotional time period, we've seen them come back and shop with US we see this layering on a better best brands the way to somewhat diversifying derisk, our assortment a little bit.

Speaker #4: Those will normalize as it relates to the number of stores year over year in the 2026, which is why we're guiding to modest leverage in SG&A in 2026.

Speaker #4: Yeah. The thing I'd add on to Carl's points, I agree with everything you said, is that at our core, listen, we're a value retailer.

Carl Ford: The majority, I mean, almost twice as much of the deleverage, 135 basis points in the Q4 was because of our growth initiatives that we're pretty committed to. Those will normalize as it relates to the number of stores, year-over-year into 2026, which is why we're guiding to modest leverage in SG&A in 2026.

Speaker #4: We're not getting away from that. I want to make sure that we don't leave any doubt in anybody's mind that we're losing focus on that.

Number one it helps customers, who maybe couldnt find those brands in our stores previously stay with us and shop, when they had to leave and on the other side of it I think it is helping us bring in a new customer. So we're still a value based retailer. We think these new brands help us diversify derisk our customer bring in slightly more elevated customer, but we don't want you to think any way shape or form that we're losing.

Speaker #4: I think we're in an environment where the lower-end consumer under 50K is really under pressure, is opting out or trading down. We still actively market to them, want them to shop with us.

Speaker #4: And I think we see them come back during times of deep value, like when we run clearance events or when we're in a promotional time period; we see them come back and shop with us.

Steve Lawrence: Yeah. The thing I'd add on to Carl's points, I agree with everything he said, is that at our core, listen, we're a value retailer. We're not getting away from that. I wanna make sure that we don't leave any doubt in anybody's mind that we're losing focus on that. I think we're in an environment where the lower end consumer, under 50,000, is really under pressure. It is opting out or trading down. We still actively market to them, want them to shop with us, and I think we see them come back during times of deep value, like when we run clearance events or when we're in a promotional time period, we see them come back and shop with us.

Focus on the value based customer as well.

Thank you very much he didn't like.

Speaker #4: We see this layering on a better best brands the way to somewhat diversify and de-risk our assortment a little bit. From Twofold, number one, it helps customers who maybe couldn't find those brands in our stores previously stay with us and shop when they had to leave.

Yes.

Our next question comes from Kate Mcshane with Goldman Sachs. Your line is now live.

Hi, Thanks for taking our question.

Just curious if we could get a little bit more detail about how each business segment performed during the quarter.

Speaker #4: And on the other side of it, I think it's helping us bring in a new customer. So we're still a value-based retailer. We think these new brands help us diversify and de-risk our customer, bring in a slightly more elevated customer, but we don't want you to think in any way, shape, or form that we're losing focus on the value-based customer as well.

And then just as a second unrelated follow up question.

You are thinking about the loyalty program are.

Steve Lawrence: We see this layering on of better, best brands as a way to somewhat diversify and de-risk our assortment a little bit from twofold. Number one, it helps customers who maybe couldn't find those brands in our stores previously stay with us and shop when they had to leave. On the other side of it, I think it's helping us bring in a new customer. We're still a value-based retailer. We think these new brands help us diversify and de-risk our customer, bring in slightly more elevated customer. We don't want you to think in any way, shape, or form that we're losing focus on the value-based customer as well.

New iteration of the loyalty program, what is being incorporated into the.

Speaker #6: Thank you very much, and good luck.

The margin implications of that in 2026.

Speaker #4: Thanks.

Speaker #1: All right. Next question comes from Kate McShane with Goldman Sachs. Your line is now live.

Yes, so from a how the different categories work Alpha for Q4, we saw strength across a lot of our core businesses.

Speaker #7: Hi. Thanks for taking our question. We're just curious if we could get a little bit more detail about how each business segment performed during the quarter.

Bikes fishing outdoor cooking apparel electronics and athletic footwear, all strong so the software business is for us during the quarter were more seasonal in nature with seasonal footwear boots and outerwear already mentioned Apple is little soft I would say that camping with little soft primarily driven by lapping some really big numbers from the year before and drink Ware and.

Speaker #7: And then just as a second unrelated follow-up question, when you are thinking about the loyalty program or this new iteration of the loyalty program, what is being incorporated into the margin implications of that in 2026?

Michael Lasser: Thank you very much. Good luck.

Steve Lawrence: Thanks.

Operator 1: Our next question comes from Kate McShane with Goldman Sachs. Your line is now live.

Operator: Our next question comes from Kate McShane with Goldman Sachs. Your line is now live.

Right on so it is a little tougher for us this holiday and we went back and looked at it we had to kind of cobble together an assortment. There is also the tariff environment trying to find the right goods out there with.

Kate McShane: Hi. Thanks for taking our question. We're just curious if we could get a little bit more detail about how each business segment performed during the quarter. Just as a second unrelated follow-up question, when you are thinking about the loyalty program or this new iteration of the loyalty program, what is being incorporated into the margin implications of that in 2026?

Speaker #4: Yeah. So from how the different categories worked out for Q4, we saw strength across a lot of our core businesses. Bikes, fishing, outdoor cooking, apparel, electronics, and athletic footwear were all strong.

What's exciting is as we crossover into spring.

To a positive comp.

All the businesses are performing pretty well right now so we're seeing pretty broad based.

Speaker #4: Some of the softer businesses for us during the quarter were more seasonal in nature. So seasonal footwear, I think boots, and outerwear. I already mentioned Ammo was a little soft.

Solid business.

Across all the different businesses could you repeat the second part of your question, Ken I was writing something down on I missed the second part.

Speaker #4: I would say that camping was a little soft, primarily driven by laughing some really big numbers from the year before in drink wear. And then ride-ons was a little tougher for us this holiday.

Oh, yes.

Steve Lawrence: Yeah. From how the different categories worked out for Q4, we saw strength across a lot of our core businesses. Bikes, fishing, outdoor cooking, apparel, electronics, and athletic footwear are all strong. Some of the softer businesses for us during the quarter were more seasonal in nature. Seasonal footwear, think boots and outerwear. I already mentioned ammo was a little soft. I would say that camping was a little soft, primarily driven by lapping some really big numbers from the year before in drinkware. Ride-ons was a little tougher for us this holiday, and when we went back and looked at it, we had to kind of cobble together an assortment there based off of the tariff environment, trying to find the right goods out there.

Cost implications, yes from the from the lunch.

Speaker #4: And when we went back and looked at it, we had to kind of cobble together an assortment there. Based off of the tariff environment, trying to find the right goods out there.

So on the on the loyalty what we did is we went back we always have done different.

Sometimes targeted discounts through various loyalty programs that we have.

Speaker #4: What's exciting is we've crossed over into spring and moved to a positive comp. All the businesses are performing pretty well right now. So we're seeing pretty broad-based solid business.

Basically pulled those altogether and our bundling in it from a rewards perspective, we don't expect it to really impact. The overall gross margins can be more repurposing of discounts that were using in the past for other purposes.

Speaker #4: Across all the different businesses, could you repeat the second part of your question, Kate? I was writing something down, and I missed the second part.

We're going to repurpose the loyalty can be much more targeted so rather than kind of broadly based getting our coupons on certain events or certain time periods can be really targeted at loyalty members.

Speaker #7: Oh, yes. Just any kind of cost implications, yes, from the launch.

Speaker #4: Yeah, so on the loyalty, what we did is we went back. We have always done different, sometimes targeted, discounts through various loyalty programs that we have.

Steve Lawrence: What's exciting is as we've crossed over into spring, you know, and moved to positive comp, all the businesses are performing pretty well right now. We're seeing pretty broad-based, solid business, across all the different businesses. Could you repeat the second part of your question, Kate? I was writing something down, and I missed the second part.

Which we think is going to really help us activate against them.

Thank you.

Speaker #4: We basically pulled those all together in our bundling units from a rewards perspective, so we don't expect it to really impact the overall gross margin.

Speaker #4: It's going to be more a repurposing of discounts that we're using in the past for other purposes. That we're going to repurpose via loyalty and be much more targeted.

Kate McShane: Oh, yes. Just any kind of cost implications, yes, from the launch.

Jonathan are you muted.

Steve Lawrence: Yeah. On the loyalty, what we did is we went back. You know, we always have done different, sometimes targeted discounts through various loyalty programs that we have. We've basically pulled those all together and are bundling them in from a rewards perspective. We don't expect it to really impact the overall gross margins. It's gonna be more a repurposing of discounts that we were using in the past for other purposes, that we're gonna repurpose via loyalty and be much more targeted. Rather than kind of broadly based giving out coupons on certain events or certain time periods, it's gonna be really targeted at loyalty members, which we think is gonna really help us activate against them.

Speaker #4: So rather than kind of broadly based giving out coupons on certain events or certain time periods, it's going to be really targeted at loyalty members, which we think is going to really help us activate against them.

Oh good morning can you hear me okay.

Now again.

Oh great.

Carl.

You mentioned plans for traffic to improve in 2026 versus 2025, so maybe just at the midpoint of your comp range, what's embedded for traffic versus ticket in and how does that change at the lower and upper bounds of the range. Thanks.

Speaker #4: Thank you.

We don't really guide based off of traffic.

I don't think I can directly answer your question, but I will say as it relates to all of the context that we've given around sales growth all of those are our traffic.

Speaker #1: Jonathan, are you muted?

Speaker #6: Oh, good morning. Can you hear me okay?

Speaker #5: Yeah.

Speaker #4: Now we can.

Kate McShane: Thank you.

Speaker #6: Oh, great. Carl, you mentioned plans for traffic to improve in 2026 versus 2025. So maybe just at the midpoint of your comp range, what's embedded for traffic versus ticket and how does that change at the lower and upper bounds of the range?

Steve Lawrence: Thank you.

Drivers, so new stores positive comping existing stores launching an annual annualized Inc.

Operator 1: Jonathan, are you muted?

Operator: Jonathan, are you muted?

Gross traffic E Commerce, we look at a couple of different ways to understand share. We look at similar web information associated with sessions growth and we see that we're taking share there we think that some of the <unk> search and I don't know if you guys have looked at our website at scout the little assistant that helps you with.

Speaker #6: Thanks.

Speaker #4: We don't really guide based off of traffic. So, I don't think I can directly answer your question, but I will say, as it relates to all of the context that we've given around sales growth, all of those are traffic drivers.

[Analyst]: Oh, good morning. Can you hear me okay?

Jonathan Matuszewski: Oh, good morning. Can you hear me okay?

Steve Lawrence: Yeah.

Operator: Yeah.

Kate McShane: Now we can.

Steve Lawrence: Now we can.

[Analyst]: Oh, great. Carl, you mentioned plans for traffic to improve in 2026 versus 2025. Maybe just at the midpoint of your comp range, what's embedded for traffic versus ticket, and how does that change at the lower and upper bounds of the range? Thanks.

Jonathan Matuszewski: Oh, great. Carl, you mentioned plans for traffic to improve Maybe just at the midpoint of your comp range, what's embedded for traffic versus ticket, and how does that change at the lower and upper bounds of the range? Thanks.

Kind of like large language searches.

Can we get better quicker faster stronger.

Speaker #4: So new stores, positive comping, existing stores launching and annualizing, gross traffic, e-commerce. We look at a couple of different ways to understand share. We look at similar web information associated with session growth, and we see that we're taking share there.

The additional Jordan shops, those traffic drivers, so we havent overtly guided towards the basket or traffic, but I know that traffic will be improved from what we saw in 2025.

Steve Lawrence: We don't really guide based off of traffic, so I don't think I can directly answer your question, but I will say as it relates to all of the context that we've given around sales growth, all of those are traffic drivers. New stores, positive comping, existing stores launching and annualizing, gross traffic, e-commerce. You know, we look at a couple of different ways to understand share. We look at Similarweb information associated with session growth, and we see that we're taking share there. We think that some of the agentic search and I don't know if you guys have looked at our website at Scout, the little assistant that helps you with kinda like large language searches. That's gonna get better, quicker, faster, stronger.

Carl Ford: We don't really guide based off of traffic, so I don't think I can directly answer your question, but I will say as it relates to all of the context that we've given around sales growth, all of those are traffic drivers. New stores, positive comping, existing stores launching and annualizing, gross traffic, e-commerce. You know, we look at a couple of different ways to understand share. We look at Similarweb information associated with session growth, and we see that we're taking share there. We think that some of the agentic search and I don't know if you guys have looked at our website at Scout, the little assistant that helps you with kinda like large language searches. That's gonna get better, quicker, faster, stronger.

Okay. Thank you and then just a quick follow up.

Just looking for more color in terms of the traffic decline this quarter I don't know if you can share any details in terms of the bi income cohort.

Speaker #4: We think that some of the agentic search and I don't know if you guys have looked at our website at Scout, the little assistant that helps you with kind of like large language searches.

And understand maybe how kind of the lower income quintiles are reacting to the AUR is versus the other cohorts. Thanks so much.

Speaker #4: That's going to get better, quicker, faster, stronger. The additional Jordan shops, those are traffic drivers. So we haven't overtly guided towards the basket or traffic, but I know that traffic will be improved from what we saw in 2025.

Yes so.

Traffic trends, we saw by income cohort kind of mirror, what we saw all year that we talked about on previous calls at the high end, we continue to see a double digit increase in traffic count low double digit increase from customers, making over 100000 hours a year of households make up a $100000 here at the lower end, we continue to see probably a high single digit decline.

Speaker #6: Okay, thank you. And then just a quick follow-up—just looking for more color in terms of the traffic decline this quarter. I don't know if you can share any details in terms of by income cohort, and understand maybe how the lower income quintiles are reacting to the AURs versus the other cohorts.

Lower income consumers the middle kind of is holding its own.

Steve Lawrence: The additional Jordan shops, those are traffic drivers. We haven't overtly guided towards the basket or traffic, but I know that traffic will be improved from what we saw in 2025.

Carl Ford: The additional Jordan shops, those are traffic drivers. We haven't overtly guided towards the basket or traffic, but I know that traffic will be improved from what we saw in 2025.

That's kind of behavior, you're seeing it all year and it continued into Q4 so once.

Once again, I don't think that the AUR increases.

Speaker #6: Thanks so much.

Speaker #4: Yeah. So the traffic trends we saw by income cohort kind of mirror what we saw all year that we talked about on previous calls.

Sorry on mix or what's really driving the traffic declines to Laurence and consumer I think theyre, just under pressure and are opting out or trading down and why.

[Analyst]: Okay. Thank you. Just a quick follow-up. Just looking for more color in terms of the traffic decline this quarter. I don't know if you can share any details in terms of by income cohort and understand maybe how kind of the lower income quintiles are reacting to the AURs versus the other cohorts. Thanks so much.

Jonathan Matuszewski: Okay. Thank you. Just a quick follow-up. Just looking for more color in terms of the traffic decline this quarter. I don't know if you can share any details in terms of by income cohort and understand maybe how kind of the lower income quintiles are reacting to the AURs versus the other cohorts. Thanks so much.

Speaker #4: At the high end, we continue to see a double-digit increase in traffic—a low double-digit increase—from customers making over $100,000 a year, or households making over $100,000 a year.

As I mentioned earlier we.

We do have some different time periods and strategies and tactics that we have to try to engage with them. We were pretty pleased with some of the reaction. We saw during February around our clearance event. We think that was a lower income consumer coming back in and really taken a backseat values there.

Speaker #4: At the lower end, we continue to see probably a high single-digit decline in those lower-income consumers. In the middle, it's kind of holding its own.

Speaker #4: And that's kind of the behavior we've seen all year, and it continued into Q4. So once again, I don't think that the AUR increases and the assortment mix are what's really driving the traffic declines in the lower income consumer.

Steve Lawrence: Yeah. The traffic trends we saw by income cohort kind of mirror what we saw all year that we talked about on previous calls. At the high end, we continue to see a double-digit increase in traffic count, low double-digit increase from customers making over $100,000 a year or households making over $100,000 a year. At the lower end, we continue to see probably a high single-digit decline in those lower income consumers. In the middle, kind of just holding its own. That's kind of the behavior we've seen all year, and it continued into Q4. You know, once again, I don't think that the AUR increases and the assortment mix are what's really driving the traffic declines in the lower income consumer.

And once again as we run other promotional windows starting later in the year.

We think we're going to get that customer to come back, but they are definitely under pressure.

Understood best of luck.

Speaker #4: I think they're just under pressure and are opting out or trading down. And as I mentioned earlier, we do have some different time periods and strategies and tactics we have to try to engage with them.

Thanks.

Our final question is from Anthony <unk> with loop capital markets. Your line is now live.

Thank you so much for squeezing me in.

Speaker #4: We're pretty pleased with some of the reaction we saw during February around our clearance event. And we think that was a lower-income consumer coming back in and really taking advantage of the values there.

I just have one.

One question two parts I guess.

The Jordan brand just in terms of how has the brand.

Yes.

Speaker #4: And once again, as we run other promotional windows during later in the year or clearance events, we think we're going to get that customer to come back.

So how is it how is the brand performed relative to your initial expectations and then also do you think that that's going to help with.

Steve Lawrence: I think they're just under pressure and are opting out or trading down. You know, as I mentioned earlier, we do have some different time periods and strategies and tactics we have to try to engage with them. We're pretty pleased with, you know, some of the reaction we saw during February around our clearance event. We think that was a lower income consumer coming back in and really taking advantage of the values there. Once again, as we run other promotional windows during later in the year or clearance events, we think we're gonna get that customer to come back, but they're definitely under pressure.

Speaker #4: But they're definitely under pressure.

Speaker #6: Understood. Best of luck.

Speaker #4: Thanks.

And some other high profile brands.

Avenue merchandise assortment and Steve I think you know what is that referring to.

Speaker #1: Our final question is from Anthony Chakumba with Loop Capital Markets. Your line is now live.

I do Anthony Thanks for the question.

So we're very pleased with the relationship that we have with Nike and the Jordan brand.

Speaker #2: So, I guess I just have one question, two parts. I guess it's on the Jordan brand. Just in terms of, how has the brand—it's been, I guess, six or seven months out.

We don't have a last year for Jordan.

Insight is a COVID-19 joined together and grew high single digits, which we were very pleased with.

Speaker #2: How has the brand performed relative to your initial expectations? And then also, do you think that that's going to help with bringing in some other high-profile brands that you currently don't have in your merchandise assortment?

[Analyst]: Understood. Best of luck.

Jonathan Matuszewski: Understood. Best of luck.

Steve Lawrence: Thanks.

And we're going to continue to expand and grow the Nike and Jordan footprint or getting more access or.

Operator 1: Our final question is from Anthony Chukumba with Loop Capital Markets. Your line is now live.

Operator: Our final question is from Anthony Chukumba with Loop Capital Markets. Your line is now live.

Our premium footwear that we're pushing deeper into the chain you take out.

Speaker #2: And Steve, I think you know which brands I'm referring to.

Anthony Chukumba: Thank you so much for squeezing me in. I guess I just have one question, two parts. I guess it's on the Jordan brand. Just in terms of how the brand has performed relative to your initial expectations. You know, it's been, I guess, you know, six or seven months now. Do you think that that's gonna help with bringing some other high-profile brands that you currently don't have in your merchandise assortment? Steve, I think you know which brands I'm referring to.

It was running shoe like the marrow.

And last year, we got it at launch and Youre going to see that product lots for roughly 150 doors as we get into back to school. So I think how we brought the Jordan brand to life really I think showed the Nike.

Speaker #4: I do, Anthony. Thank you for the question. Listen, we're very pleased with the relationship that we have with the Nike and the Jordan brand.

Speaker #4: We don't have a last year for Jordan, so what we can say is that if you combine Nike and Jordan together, they grew high single digits, which we were very pleased with.

As well as vendors across the spectrum, where we can do when we launched a new brand and we certainly use that as a proof point.

As we're talking to new brands, and we will share some information on some new brands.

Speaker #4: And we're going to continue to expand and grow the Nike and Jordan footprint. We're getting more access to more premium footwear that we're pushing deeper into the chain.

Update.

And obviously.

Steve Lawrence: I do, Anthony. Thank you for the question. You know, listen, we're very pleased with the relationship that we have with the Nike and the Jordan brand. You know, we don't have a last year for Jordan, so what we can cite is if you combine Nike and Jordan together, they grew high single digits, which we were very pleased with. You know, we're gonna continue to expand and grow the Nike and Jordan footprint. We're getting more access to more premium footwear that we're pushing deeper into the chain. You take a performance running shoe like Vomero. Last year we got it at launch, and you're gonna see that product go out to roughly 150 doors as we head into back to school.

Speaker #4: You take a performance running shoe like the Vimero, and last year we got it at launch, and you're going to see that probably go out to roughly $150 as we head into back to school.

If we get to a place where we're ready to announce or can announce some of the brands you've asked about in the past our.

Trust Me you will not have to ask some question will probably tell you before you have assets.

Speaker #4: So I think how we brought the Jordan brand to life really, I think, showed the Nike team as well as vendors across the spectrum what we can do when we launch a new brand.

Fair enough I'll see you guys in New York.

Okay. Thanks Anthony.

We have reached the end of the question and answer session I would now like to turn the call back over to Steve Lawrence for closing comments.

Speaker #4: And we certainly use that as a proof point as we're talking to new brands. And we will share some information around some new brands in the April 7th update.

Thanks in closing, we made a lot of progress across numerous fronts in 2025, which allowed us to both grow top line sales for the first time in a couple of years as well as continued to gain market share.

Speaker #4: And obviously, if we get to a place where we're ready to announce, or can announce, some of the brands you've asked about in the past, trust me, you will not have to ask us the question.

Steve Lawrence: I think how we brought the Jordan brand to life really, I think, showed the Nike team as well as vendors across the spectrum what we can do when we launch a new brand. We certainly use that as a proof point as we're talking to new brands. We will share some information around some new brands in the 7 April update. Obviously, if we get to a place where we're ready to announce or can announce some of the brands you've asked about in the past, trust me, you will not have to ask us the question. We'll probably tell you before you ask us.

We believe that we have the strategies and tactics in place to continue this growth in 2026 and move back to comp store growth as well as always I'd like to thank our 22000 plus team members for their hard work and efforts, which are helping make academy the best sports and outdoor retailer in the country. We look forward to meeting with most of you on April seven and sharing how we plan to build on the initiatives we outlined today in 2026.

Speaker #4: We'll probably tell you before you ask us.

Speaker #2: Fair enough. I'll see you guys in New York.

Speaker #4: Okay. Thanks, Anthony.

Speaker #1: We have reached the end of the question and answer session. I'd now like to turn the call back over to Steve Lawrence for closing comments.

Beyond thank.

Speaker #4: Thanks. In closing, we made a lot of progress across numerous fronts in 2025, which allowed us to both grow top-line sales for the first time in a couple of years, as well as continue to gain market share.

Thank you all for joining our call today and have a great rest here day and happy St. Patrick's day.

This concludes today's conference you may disconnect your lines at this time.

Thank you for your participation.

Speaker #4: We believe that we have the strategies and tactics in place to continue this growth in 2026 and move back to constant growth as well.

Anthony Chukumba: Fair enough. I'll see you guys in New York.

Steve Lawrence: Okay. Thanks, Anthony.

Speaker #4: As always, I'd like to thank our 22,000-plus team members for their hard work and efforts, which are helping make Academy the best sports and outdoor retailer in the country.

Operator 1: We have reached the end of the question and answer session. I'd now like to turn the call back over to Steve Lawrence for closing comments.

Operator: We have reached the end of the question and answer session. I'd now like to turn the call back over to Steve Lawrence for closing comments.

Speaker #4: We look forward to meeting with most of you on April 7th and sharing how we plan to build on the initiatives we outlined today in 2026 and beyond.

Steve Lawrence: Thanks. In closing, we made a lot of progress across numerous fronts in 2025, which allowed us to both grow top line sales for the first time in a couple of years as well as continue to gain market share. We believe that we have the strategies and tactics in place to continue this growth in 2026 and move back to comp store growth as well. As always, I'd like to thank our 22,000+ team members for their hard work and efforts, which are helping make Academy the best sports and outdoor retailer in the country. We look forward to meeting with most of you on April 7 and sharing how we plan to build on the initiatives we outlined today in 2026 and beyond. Thank you all for joining our call today, and have a great rest of your day, and Happy St.

Speaker #4: Thank you all for joining our call today, and have a great rest of your day and happy St. Patrick's Day.

Steve Lawrence: Patrick's Day.

Operator 1: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Q4 2025 Academy Sports & Outdoors Inc Earnings Call

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