Academy Sports + Outdoors reported earning this week and saw some continuation of consumer themes, and some new ones. Their Q1 that they reported went through May 2nd, so it captures a little more of Spring than companies following a calendar year.

They continue to see growth from more higher income consumers shopping with them. That contrasts with lower income consumers that continue to see pressure and are spending less.

During the first quarter, trips from consumers who make over $100,000 grew by mid-single digits. Consumer confidence remains bifurcated with materially higher confidence levels among upper income households versus lower income cohorts, where there is less optimism about their future financial prospects. This dynamic continues the derisking of our consumer base that began at the end of 2024 and reinforces confidence in Academy’s value-driven positioning.

Earl Ford, CFO at Academy Sports

The trend between the income level of consumers shopping at Academy has been consistent for years now. It’s a reflection of continued consumer economic pressure, and an important dynamic to consider on the merchandising side for Academy. They’re catering more and more to a different customer, so they need to have products that appeal to that new base.

Gas Prices

High gas prices are impacting all consumers, so it was naturally a big topic of conversation during the call. Important to the live-fire industry, high gas prices eat away at discretionary spending. They also took away from any bounce that could have occurred due to cash from tax returns.

The consumer environment remains pressured as high gas prices largely offset the benefit of tax refunds in the first quarter, particularly for lower-income households, which continues to weigh on discretionary spending. At the same time, we continue to see higher income consumers, which are our largest and fastest-growing cohort, trade into Academy in search of value.

Earl Ford, CFO at Academy Sports

Academy’s forecast assumes that high gas prices will continue for the rest of the year. The airstrikes on Iran started at the end of February, with gas prices increasing through Academy’s Q1.

So yes, gas prices definitely are a headwind for the American consumer. I saw an article, I think, a week or so ago that said on a monthly basis, it’s pulling out about $17.5 billion of consumer discretionary spending each month. So that definitely is impacting the consumer. I’d say, as we’ve gotten into Q2, we’ve seen a little bit of a slowdown from the consumer, which we would attribute to gas prices.

Steve Lawrence, CEO of Academy Sports

Another dynamic caused from the gas prices is that consumers are buying value, so they’re waiting for key promotional holidays to shop. That’s an important consideration as brands think about their promotional strategy through the key summer holidays.

I mean we definitely have seen that play out a little bit as we progress through Q2, and I expect that’s going to happen. Customers are looking for value, right. And I think they’re looking for ways to offset higher gas prices. And I think we’ve seen them and this happened a little bit in Q1, and we’ve seen it continue into Q2 where they’re amplifying purchases during the promotional windows that we have on the calendar. They’re pulling back a little bit in the lulls, and we have definitely adjusted our forecast and our plans moving forward to account for that.

Steve Lawrence, CEO of Academy Sports

Digital Growth

Much like the large hardware retailers, Academy continues to have success in digital. They have consistently seen double-digit growth and they’re investing in meeting consumers with the way that search evolves.

Shifting gears to our omni-channel business. We continue to make solid progress, which is evidenced by the 17% growth in sales and the 100 basis point expansion in penetration we experienced in Q1. We have 2 key focuses during second quarter. First, we’re expanding our same-day delivery platforms to include Uber Eats and Instacart as a complement to our existing partnership with DoorDash. Our research shows there is minimal overlap between the customer bases for each of these services, so expanding our online presence to include these additional same-day delivery platforms should be mostly accretive and expose our brand and product categories to a broader audience.

In addition, we plan to migrate the search platform from our site to be powered by Google’s AI Commerce search and Gemini Enterprise customer experience as we turn the corner into back-to-school. We believe customers are increasingly utilizing AI agents to aid them as they shop online. So moving our search to be powered by AI is a natural evolution and will be intuitive for them. As we continuously evolve our online capabilities, we expect the sales momentum we’ve built over the past year in this business will continue to provide a strong comp tailwind for our overall sales.

Steve Lawrence, CEO of Academy Sports

Store Growth

A key part of Academy’s growth strategy has been through growing their store count. They’re expanding into new markets and building density in existing markets. No only will that help with in-store sales, it will also have a flywheel effect for their digital sales.

New store expansion remains our #1 growth lever, and we’re starting to build critical mass behind this strategy. We began the year with 39 stores from our 2022 through 2024 vintages in our comp base. This tranche of stores continues to perform well with sales comping in the high single digits. We anticipate this tailwind should accelerate as the 24 stores from our 2025 vintage start to flow into the comp base as we progress through the year.

During the first quarter, we opened up 2 new stores in Canton, Ohio, and Muskogee, Oklahoma, both of which support our strategy to grow in mid-sized markets. These are underserved communities and tend to over-index with our core customer, the Always Game Family. During the second quarter, we will open up 3 more stores with locations in Altoona, Pennsylvania, North Knoxville, Tennessee, and Morristown, Tennessee. The remaining 15 to 20 stores are expected to open in the back half of the year with a heavy focus in legacy and existing markets. As we head into 2027 and beyond, we expect to have a more balanced mix of openings between the first half and the second half of each year.

Steve Lawrence, CEO of Academy Sports