Academy Sports Q2 Sales Hit $1.6 Billion as Comps Turn Positive After 3 Years

Academy Sports and Outdoors reported its Q2 2025 financial results on September 2, marking a pivotal quarter where the retailer returned to positive comparable sales growth for the first time in three years. While both sales and adjusted EPS missed Wall Street expectations, Academy’s leadership emphasized key strategic gains, market share capture, and confidence in a stronger second half for the year.

Q2 2025 Results—Solid Sales Growth, Mixed Earnings

Academy’s net sales for the quarter ended August 2 reached $1.6 billion, representing a 3.3% year-over-year increase from the prior year. While this missed analysts’ consensus target of $1.61 billion, it demonstrated improving momentum after recent retail headwinds.

• Comparable sales (comp sales) rose 0.2%, turning positive for the first time since 2022—a marked improvement over multiple quarters of declines.

• E-commerce sales were a bright spot, surging nearly 18% and gaining 120 basis points in sales mix, helping offset softer in-store traffic.

• Adjusted earnings per share (EPS) were $1.94, down from last year and below the $2.12 analyst estimate, as increased expenses weighed on margins.

• GAAP earnings per share: $1.85.

• Gross margin: Held steady at 36% for the quarter, with margin expansion from strong merchandising offset by higher e-commerce shipping costs and inventory shrinkage.

Operating income landed at $172 million, while new store growth, higher payroll, and technology investment contributed to a 25.3% SG&A (selling, general, and administrative) expense rate, up from 23.8% in Q2 2024.

Management Commentary and Strategic Update

Academy CEO Steve Lawrence highlighted the quarter as a key turning point for the business, citing:

“We were pleased to see sales inflect to a positive comp in the second quarter, driven by steady improvements in the business that are a result of the progress we continue to make against our strategic initiatives. Customers are gravitating to our diversified assortment and our value proposition is resonating with them, which has allowed us to pick up market share in the first half.”

He also noted the strong finish to the quarter, with sales running positive for the last seven weeks, and e-commerce’s outperformance, as key signals that Academy’s innovation, omnichannel strategies, and competitive pricing are resonating.

Category and Channel Insights

• Footwear, apparel, sports/rec, and outdoor all posted low single-digit gains, showing consistency across the portfolio.

• E-commerce sales jumped 17.7%, and Academy continued to expand its partnership with high-profile brands, notably the launch of Jordan Brand in stores and sustained Nike growth.

• In-store execution and inventory accuracy improved due to RFID investments, while 75% of products are now price-disciplined everyday items, reducing reliance on deep promos.

Inventory and Cash Flow Considerations

Inventory was up 16.2% versus last year (units per store up 4.6%), as the company stocked up on “evergreen” items, such as gym weights and bicycles, expecting continued tariff and demand volatility through the back half of the year.

Free cash flow for Q2 was $21.7 million, with a $301 million cash balance and an undrawn $1 billion revolver.

Store Growth and Capital Expenditure

The retailer ended the quarter with 306 stores in 21 states, opening new locations in Fort Walton, FL, and Morgantown, WV. Around $60 million was invested in strategic and technology upgrades during the quarter.

Full-Year 2025 Outlook—Guidance Raised

Academy slightly raised its full-year guidance despite cost headwinds and the Q2 earnings miss:

• Full-year sales guidance raised to $6.13 billion.

• Adjusted EPS guidance lifted to $5.95.

• Comp sales range: revised from -3% to + %, as management expects accelerating back-half gains.

These forecasts reflect ongoing investments in omnichannel, technology, and merchandise assortment, building a foundation for profitable long-term growth.

Market Reaction and Financial Health

Shares fell ~7% post-earnings on the headline EPS miss and expense uptick, yet Academy maintains a strong financial position (healthy current ratio, continued share buybacks, and a P/E ratio below 10, suggesting undervaluation).

Looking Ahead

Academy’s Q2 demonstrates a company in transition: solid sales improvement, expanding e-commerce, and positive comp momentum—but also underlined by increased expenses and the need for ongoing growth in traffic and margins.

For more info, see the full press release and resources:

• Academy Sports + Outdoors Investor Relations

• Yahoo Finance: ASO Q2 Earnings

• Nasdaq Q2 snapshot