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What changed in Academy Sports & Outdoors, Inc.'s 10-K — 2025 vs 2026

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Paragraph-level year-over-year comparison of Academy Sports & Outdoors, Inc.'s 2025 and 2026 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2026 report.

+312 added−322 removedSource: 10-K (2025-03-20) vs 10-K (2024-03-21)

Top changes in Academy Sports & Outdoors, Inc.'s 2026 10-K

312 paragraphs added · 322 removed · 255 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeApproximately 55% of our customers purchased a private label brand from us in 2023. 7 As of February 3, 2024, we generally organized our merchandise in four divisions made up of sixteen categories as follows: Division Category Primary product types Outdoors Camping Coolers and drinkware, camping accessories and camping equipment Fishing Marine equipment and fishing rods, reels, baits and equipment Hunting Firearms, ammunition, archery and archery equipment, camouflage apparel, waders, shooting accessories, gun safes, optics, airguns and hunting equipment Sports and Recreation Fitness Fitness equipment, fitness accessories and nutrition supplies Team sports Team and specialty sports equipment, including baseball, football, basketball, soccer, golf, racket sports, and volleyball, and backpacks and sports bags Recreation Patio furniture, outdoor cooking, wheeled goods (bicycles, skateboards and other ride-on toys), trampolines, play sets, watersports and pet equipment Front end Electronics, watches, sunglasses and front-end (consumables, batteries, etc.) Apparel Outdoor and seasonal apparel Outdoor apparel, seasonal apparel, denim, work apparel, graphic t-shirts and accessories Youth apparel Boys and girls outdoor and athletic apparel Athletic apparel Sporting apparel and apparel for fitness Licensed apparel Professional and collegiate team licensed apparel and accessories Footwear Casual and seasonal footwear Casual shoes, slippers, seasonal footwear and socks Work footwear Work and western boots, shoes and hunting footwear Youth footwear Boys and girls footwear Athletic footwear Running shoes, athletic lifestyle and training shoes Team sports footwear Team and specialty sports footwear and slides 8 The following table sets forth the approximate amount of sales (all of which are based in the U.S.) by merchandise divisions for the periods presented (amounts in thousands): Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Merchandise sales (1) Outdoors $ 1,727,018 $ 1,819,418 $ 2,060,046 Sports and recreation 1,452,377 1,488,187 1,577,776 Apparel 1,710,838 1,758,993 1,810,345 Footwear 1,235,643 1,291,227 1,290,197 Total merchandise sales (2) 6,125,876 6,357,825 6,738,364 Other sales (3) 33,415 37,248 34,764 Net sales $ 6,159,291 $ 6,395,073 $ 6,773,128 (1) Certain products and categories were re-categorized among various categories and divisions, respectively, during 2023 as compared to prior years in order to better align with our current merchandising strategy and view of the business.
Biggest changeApproximately 52% of our customers purchased a private label brand from us in 2024 and approximately 23% of our 2024 merchandise sales was comprised of private brand products. 7 As of February 1, 2025, we generally organized our merchandise in four divisions made up of sixteen categories as follows: Division Category Primary product types Outdoors Camping Coolers and drinkware, camping accessories and camping equipment Fishing Marine equipment and fishing rods, reels, baits and equipment Hunting Firearms, ammunition, archery and archery equipment, camouflage apparel, waders, shooting accessories, gun safes, optics, airguns and hunting equipment Sports and Recreation Fitness Fitness equipment, fitness accessories and nutrition supplies Team sports Team and specialty sports equipment, including baseball, football, basketball, soccer, golf, racket sports, volleyball, backpacks and sports bags Recreation Patio furniture, outdoor cooking, wheeled goods (bicycles, skateboards and other ride-on toys), trampolines, play sets, watersports and pet equipment Front end Sunglasses and front-end (consumables, batteries, etc.), electronics, and watches Apparel Outdoor and seasonal apparel Outdoor apparel, seasonal apparel, denim, work apparel, graphic t-shirts and accessories Youth apparel Boys and girls outdoor and athletic apparel Athletic apparel Sporting apparel and apparel for fitness Licensed apparel Professional and collegiate team licensed apparel and accessories Footwear Casual and seasonal footwear Casual shoes, slippers, seasonal footwear and socks Work footwear Work and western boots, shoes and hunting footwear Youth footwear Boys and girls footwear Athletic footwear Running shoes, athletic lifestyle and training shoes Team sports footwear Team and specialty sports footwear and slides 8 The following table sets forth the approximate amount of sales (all of which are based in the U.S.) by merchandise divisions for the periods presented (amounts in thousands): Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 Merchandise sales Outdoors $ 1,739,876 $ 1,727,018 $ 1,819,418 Sports and recreation 1,357,811 1,452,377 1,488,187 Apparel 1,611,435 1,710,838 1,758,993 Footwear 1,187,605 1,235,643 1,291,227 Total merchandise sales (1) 5,896,727 6,125,876 6,357,825 Other sales (2) 36,723 33,415 37,248 Net sales $ 5,933,450 $ 6,159,291 $ 6,395,073 (1) E-commerce sales consist of 10.5%, 10.7% and 10.7% of merchandise sales for 2024, 2023 and 2022, respectively.
Our private label brand portfolio consists of 19 brands, including Academy Sports + Outdoors, Magellan Outdoors, BCG, O'rageous, Game Winner, Outdoor Gourmet, Freely and R.O.W. Our private label brand strategy focuses on in-filling categories and price points that our national brand products may not satisfy.
Our private label brand portfolio consists of 19 brands, including Magellan Outdoors, Academy Sports + Outdoors, BCG, O'rageous, Game Winner, Outdoor Gourmet, Freely and R.O.W. Our private label brand strategy focuses on in-filling categories and price points that our national brand products may not satisfy.
Ford holds a master's degree in accounting from the University of Alabama, a bachelor's degree in accounting from the University of Southern Mississippi and is an active Certified Public Accountant. 13 Matthew (Matt) McCabe has served as the Executive Vice President and Chief Merchandising Officer since June 2023. Mr.
Ford holds a master's degree in accounting from the University of Alabama, a bachelor's degree in accounting from the University of Southern Mississippi and is an active Certified Public Accountant. Matthew (Matt) McCabe has served as the Executive Vice President and Chief Merchandising Officer since June 2023. Mr.
In the future, there may be increased federal, state or local regulation and enforcement affecting the sale of firearms, ammunition, and related accessories, including taxation or restrictions on the type of firearms and ammunition available for retail sale, which could reduce our sales and profitability. For additional information, see the risk factors herein in "Item 1A.
In the future, there may be increased federal, state or local regulation and enforcement affecting the sale of firearms, ammunition, and related accessories, including taxation or restrictions on the type of firearms and ammunition available for retail sale, which could reduce our sales and profitability. For additional information, see the risk factors herein in “Item 1A.
We believe the following attributes differentiate us from our competitors: • Value-based assortment that enables our customers to participate and have fun, no matter their budget. • Broad assortment that extends beyond sporting goods and apparel to outdoor recreation and is localized for individual stores. • Emerging, growing and profitable omnichannel strategy that leverages our buy-online-pickup-in-store program ("BOPIS") and shipping fulfillment capabilities. • Strong customer loyalty, with opportunities to increase penetration in existing markets. • Regional focus in the southern United States with a growing presence in some of the fastest-growing Metropolitan Statistical Areas (or "MSAs"). • Core customers comprising active families that we support with one-stop shop convenience. • Significant whitespace opportunity for new stores for both existing and adjacent geographies and new markets.
We believe the following attributes differentiate us from our competitors: • Value-based assortment that enables our customers to participate and have fun, no matter their budget. • Broad assortment that extends beyond sporting goods and apparel to outdoor recreation and is localized for individual stores. • Emerging, growing and profitable omnichannel strategy that leverages our buy-online-pickup-in-store program (“BOPIS”) and shipping fulfillment capabilities. • Strong customer loyalty, with opportunities to increase penetration in existing markets. • Regional focus primarily in the southern United States with a growing presence in some of the fastest-growing Metropolitan Statistical Areas (or “MSAs”). • Core customers comprising active families that we support with one-stop shop convenience. • Significant whitespace opportunity for new stores for both existing and adjacent geographies and new markets.
Our technology is the foundation of our merchandising and marketing functions; it processes our customers’ orders and integrates our e-commerce sales with stores. We are leveraging our data to make more informed decisions around inventory, marketing, and store-level operations.
Our technology is the foundation of our merchandising and marketing functions; it processes our customers’ orders and integrates our e-commerce sales with stores. We are leveraging our data to make more informed decisions around inventory, marketing, store-level operations, and customer engagement.
Financial and other material information regarding the Company is routinely posted on our website and is readily accessible. We do not intend for information contained on our website to be part of this Annual Report on Form 10-K. 15
Financial and other material information regarding the Company is routinely posted on our website and is readily accessible. We do not intend for information contained on our website to be part of this Annual Report on Form 10-K. 14
Specific to our Katy corporate office, we engage our team members through the opportunity to participate in intramural sport teams, 5K fun walk/run events, subsidized membership in the company gym and exercise classes (this is also open to our Katy distribution team members); “food truck Thursdays”; onsite dental and car wash service; and a company holiday party and other team member appreciation events.
Specific to our Katy corporate office, we engage our team members through the opportunity to participate in intramural sport teams, 5K fun walk/run events, subsidized membership in the company gym and exercise classes (this is also open to our Katy distribution team members); onsite dental and car wash service; and a company holiday party and other team member appreciation events.
The retail sporting goods and outdoor recreation retail industry comprises six principal categories of retailers: • Mass general merchants (examples: Walmart, Kohl’s and Target) generally range in size from 50,000 to over 200,000 square feet and are typically located in shopping centers, free-standing sites or regional malls.
The retail sporting goods and outdoor recreation retail industry comprises six principal categories of retailers: • Mass general merchants and department stores (examples: Walmart, Kohl’s, Target and Macy's) generally range in size from 50,000 to over 200,000 square feet and are typically located in shopping centers, free-standing sites or regional malls.
Item 1. Business The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes included elsewhere in this Annual Report for the fiscal year ended February 3, 2024. This discussion contains forward-looking statements that involve risks and uncertainties.
Item 1. Business The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes included elsewhere in this Annual Report for the fiscal year ended February 1, 2025. This discussion contains forward-looking statements that involve risks and uncertainties.
Known material factors that could affect our financial performance and actual results, and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this discussion or otherwise made by our management, are described in the "Risk Factors" section of this Annual Report.
Known material factors that could affect our financial performance and actual results, and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this discussion or otherwise made by our management, are described in the “Risk Factors” section of this Annual Report.
Our average customer visits our stores anywhere from two to three times per year. 6 Our Industry The retail business is highly competitive based on many variables including price, product assortment, customer service, omnichannel experience and store locations.
Our average customer visits our stores anywhere fr om two to three times per year. 6 Our Industry The retail business is highly competitive based on many variables including price, product assortment, customer service, omnichannel experience and store locations.
See the section of this Annual Report entitled "Cautionary Statement Regarding Forward-Looking Statements." When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that characterize our business.
See the section of this Annual Report entitled “Cautionary Statement Regarding Forward-Looking Statements.” When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that characterize our business.
(3) Other sales consists primarily of the gift card breakage income, credit card bounties and royalties, shipping income, net hunting and fishing license income, sales return allowance and other items. Stores Our stores, all of which are based in the U.S., are designed to provide our customers with an easy-in, easy-out shopping experience.
(2) Other sales consist primarily of gift card breakage income, credit card bounties and royalties, shipping income, net hunting and fishing license income, sales return allowance and other items. Stores Our stores, all of which are based in the U.S., are designed to provide our customers with an easy-in, easy-out shopping experience.
We are active members of the communities in which we operate, and our long-time customers have grown up with Academy and passed their passion for us on to the next generation, enabling us to benefit from strong customer loyalty and shopping frequency. 9 As of February 3, 2024, the number of stores that we operated, exclusively in the U.S., by state was as follows: State Number of Stores Texas 111 Georgia 20 Louisiana 18 Florida 16 Alabama 15 North Carolina 15 Tennessee 13 Oklahoma 13 Missouri 11 South Carolina 9 Arkansas 8 Mississippi 8 Kansas 6 Kentucky 6 Indiana 6 Illinois 3 Virginia 3 West Virginia 1 282 We believe our real estate strategy has positioned us well for further expansion, and our track record has demonstrated that we can open and operate stores profitably.
We are active members of the communities in which we operate, and our long-time customers have grown up with Academy and passed their passion for us on to the next generation, enabling us to benefit from strong customer loyalty and shopping frequency. 9 As of February 1, 2025, the number of stores that we operated, exclusively in the U.S., by state was as follows: State Number of Stores Texas 113 Georgia 20 Florida 19 Louisiana 18 North Carolina 17 Alabama 16 Tennessee 14 Oklahoma 13 Missouri 11 South Carolina 9 Arkansas 9 Mississippi 9 Indiana 8 Kansas 6 Kentucky 6 Illinois 3 Virginia 3 West Virginia 2 Ohio 2 298 We believe our real estate strategy has positioned us well for further expansion, and our track record has demonstrated that we can open and operate stores profitably.
Approximately 80% of our 2023 merchandise sales was comprised of national brand products, with the remainder coming from exclusive products in our portfolio of private label brands. No single brand we carry accounted for more than 12% of our 2023 sales.
Approximately 77% of our 2024 merchandise sales was comprised of national brand products, with the remainder coming from exclusive products in our portfolio of private label brands. No single brand we carry accounted for more than approximately 12% of our 2024 sales.
Foreign Corrupt Practices Act, or FCPA, the U.K. Bribery Act, or UKBA, and other anti-corruption laws; and • securities and exchange laws and regulations. 14 We are a federally licensed firearms dealer, and we sell firearms, ammunition, and related accessories. Firearms represented approximately 5% of our net sales in 2023.
Foreign Corrupt Practices Act, or FCPA, the U.K. Bribery Act, or UKBA, and other anti-corruption laws; and • securities and exchange laws and regulations. We are a federally licensed firearms dealer, and we sell firearms, ammunition, and related accessories. Firearms represented approximately 6% of our net sales in 2024.
These include the following: • Customer focus and service • Excellence in all we do • Responsible leadership • Initiative with urgency • Students of the business • Integrity always • Positive impact on our communities Diversity, Inclusion and Belonging.
These include the following: • Customer focus and service • Excellence in all we do • Responsible leadership • Initiative with urgency • Students of the business • Integrity always • Positive impact on our communities Talent Management.
Our product assortment focuses on key categories of outdoor, apparel, sports & recreation and footwear (representing 28%, 28%, 24% and 20% of our 2023 net sales, respectively) through both leading national brands and a portfolio of 19 private label brands, which go well beyond traditional sporting goods and apparel offerings.
Our product assortment focuses on key categories of outdoor, apparel, sports & recreation and footwear (representing 30%, 27%, 23% and 20% of our 2024 net sales, respectively) through both leading national brands and a portfolio of 19 private label brands, which go well beyond traditional sporting goods and apparel offerings.
Risk Factors" under the sub-caption "Legal and Regulatory Risks". Available Information Our website address is www.academy.com. We use our website as a channel of distribution for company information.
Risk Factors” under the sub-caption “Legal and Regulatory Risks”. Available Information Our website address is www.academy.com. We use our website as a channel of distribution for company information.
Who We Are Academy Sports + Outdoors is a leading full-line sporting goods and outdoor recreation retailer in the United States. Originally founded in 1938 as a family business in Texas, we now operate 282 stores across 18 contiguous states.
Who We Are Academy Sports + Outdoors is a leading full-line sporting goods and outdoor recreation retailer in the United States. Originally founded in 1938 as a family business in Texas, we now operate 298 stores across 19 contiguous states as of February 1, 2025.
Our Team Members Our mission is to provide “Fun for All” and a critical component to our success is our people. As of February 3, 2024, we employed approximately 22,000 team members in the U.S. and eleven team members in Hong Kong. Of those team members, approximately 50% were full-time and 50% were part-time.
Our Team Members Our missi on is to provide “Fun for All” and a critical component to our success is our people. As of February 1, 2025, we employed approximately 22,000 team members in the U.S. and eleven team members in Hong Kong. Of those team members, approximately 45% were full-time and 55% were part-time.
Our technology is integrated across multiple functions throughout the organization, providing the data analysis, automation and solutions necessary to support our communications, inventory and supply chain management, store operations, distribution, point-of-sale, e-commerce, customer, financial reporting and accounting functions.
Information Systems Our information systems are critical to our day-to-day operations as well as to our long-term growth strategies. Our technology is integrated across multiple functions throughout the organization, providing the data analysis, automation and solutions necessary to support our communications, inventory and supply chain management, store operations, distribution, point-of-sale, e-commerce, customer, financial reporting and accounting functions.
We believe we sit in a sweet-spot of consumer demand, offering a broad, value-based assortment of sporting goods and outdoor recreation products, so our customers can participate and have fun, no matter their budget.
We believe we sit in a sweet-spot of consumer demand, offering a broad, value-based assortment of sporting goods and outdoor recreation products, so our customers can participate and have fun, no matter their budget. We carefully curate our products to provide the right assortment that appeals to customers from beginners to experts, including families and casual participants.
The distribution centers receive and store products from vendors and use sophisticated sorting and logistical equipment to fill the product needs of the retail store locations they serve, as well as to fulfill e-commerce orders. Our distribution centers are leased under long-term agreements. Third-party trucking companies are used to disburse inventory from the distribution centers to and from our stores.
Distribution Centers We operate three distribution centers in Katy, Texas; Twiggs County, Georgia; and Cookeville, Tennessee. The distribution centers receive and store products from vendors and use sophisticated sorting and logistical equipment to fill the product needs of the retail store locations they serve, as well as to fulfill e-commerce orders. Our distribution centers are leased under long-term agreements.
We also enter into intellectual property agreements whereby the Company receives the right to use third-party owned trademarks typically in exchange for royalties on sales. These agreements typically contain a one to three-year term and contractual payment amounts required to be paid by the Company.
We also enter into intellectual property agreements whereby the Company receives the right to use third-party owned trademarks typically in exchange for royalties on sales.
Johnson spent seven years with hhgregg, Inc., where he most recently served as Chief Retail Officer. While at hhgregg, Inc., he led functions including store operations, customer relations, commercial sales, real estate and visual merchandising. Prior to hhgregg, Inc., he spent more than 20 years in various leadership roles with Sears Holdings Corporation, including Vice President of Small Stores.
Johnson joined the Company in April 2017 as Executive Vice President, Retail Operations. Prior to joining the Company, Mr. Johnson spent seven years with hhgregg, Inc., where he most recently served as Chief Retail Officer. While a t hhgregg, Inc., he led functions including store operations, customer relations, commercial sales, real estate and visual merchandising.
Throughout our stores, distribution centers, and corporate headquarters, we employ policies, procedures, and training to promote safe and healthy work environments. 12 Our team member handbook outlines safety expectations, but we also empower our team members with knowledge and skills from various safety training courses during the onboarding process and on an ongoing basis through our learning engagement system with topics such as incident reporting, behavior-based safety, evacuation, active shooter response, hazardous materials, ergonomics, heat safety, electrical safety, industrial truck and pallet jack safety, confined space entry and parking lot and garage safety.
Our team member handbook outlines safety expectations, but we also empower our team members with knowledge and skills from various safety training courses during the onboarding process and on an ongoing basis through our learning engagement system with topics such as incident reporting, evacuation, active shooter response, hazardous materials, and heat safety.
We have preferred access to hundreds of well-recognized national brands, such as Nike, Under Armour, adidas, Winchester, Columbia Sportswear, Brooks, Skechers, Yeti and Carhartt, which are critical to our market penetration.
We have preferred access to hundred s of well-recognized national brands, such as Nike, including its Jordan Brand which we expect to launch starting in April 2025, Under Armour, adidas, Win chester, Columbia Sportswear, The North Face, Brooks, Skechers, Yeti, Stanley and Carhartt, which are critical to our market penetration.
Lawrence was President, Chief Executive Officer and served on the board of directors at francesca’s from October 2016 to January 2019. From May 2012 to September 2016, he served as Chief Merchandising Officer at Stage Stores. Mr. Lawrence also spent nearly 12 years working in various merchandising leadership roles at J.C. Penney after 10 years at Foley’s/May Co. Mr.
Lawrence joined the Company in February 2019 as Executive Vice President and Chief Merchandising Officer. Prior to joining the Company, Mr. Lawrence was President, Chief Executive Officer and served on the board of directors at francesca’s from October 2016 to January 2019. From May 2012 to September 2016, he served as Chief Merchandising Officer at Stage Stores. Mr.
These campaigns are executed across a blend of digital and traditional, including paid search, email, text message, mobile app, digital advertising networks, affiliates, and social media along with linear and digital video, audio, print, outdoor and direct mail.
These campaigns are executed across a blend of digital and traditional, including paid search, email, text message, mobile app, digital advertising networks, affiliates, and social media along with linear and digital video, audio, print, outdoor and direct mail. 10 We are focused on implementing and continually improving our customer centric marketing technologies, omnichannel services and experiences to save customers time and money while improving the long term health of our customer portfolio.
Of the 282 stores operated as of February 3, 2024, 281 are leased from third parties and one store is owned by the Company.
Of the 298 stores operated as of February 1, 2025, 296 are leased from third parties and two stores are owned by the Company.
These distribution centers are strategically located throughout our footprint to efficiently serve our retail locations and have the capacity to service up to approximately 120 stores per distribution center. Information Systems Our information systems are critical to our day-to-day operations as well as to our long-term growth strategies.
Third-party trucking companies are used to disburse inventory from the distribution centers to and from our stores. These distribution centers are strategically located throughout our footprint to efficiently serve our retail locations and have the capacity to service up to approximately 125 stores per distribution center.
We continue to focus on developing and driving our safety-first culture through awareness, training, and actions to reduce the frequency and severity of safety incidents. Information about our Executive Officers Below is a list of our executive officers, their respective ages as of March 21, 2024 and a brief account of the business experience of each of them.
We continue to focus on developing and driving our safety-first culture through awareness, training, and actions to reduce the frequency and severity of safety incidents.
Governmental Regulations We operate in a complex regulatory and legal environment that exposes us to regulatory, compliance and litigation risks that could materially affect our operations and financial results. Specifically, we are subject to regulation by numerous federal, state and local regulatory agencies and authorities, including the U.S.
These agreements typically contain a one to three-year term and contractual payment amounts required to be paid by the Company. 13 Governmental Regulations We operate in a complex regulatory and legal environment that exposes us to regulatory, compliance and litigation risks that could materially affect our operations and financial results.
Lawrence obtained his Bachelor of Business Administration in Finance from the University of Notre Dame. Samuel (Sam) J. Johnson has served as President since October 2023. Mr. Johnson joined the Company in April 2017 as Executive Vice President, Retail Operations. Prior to joining the Company, Mr.
Lawrence also spent nearly 12 years working in various merchandising leadership roles at J.C. Penney after 10 years at Foley’s/May Co. Mr. Lawrence obtained his Bachelor of Business Administration in Finance from the University of Notre Dame. Samuel (Sam) J. Johnson has served as President since October 2023. Mr.
Earl Carlton (Carl) Ford IV has served as Executive Vice President and Chief Financial Officer since July 2023. Mr.
Prior to hhgregg, Inc., he spent more than 20 years in various leadership roles with Sears Holdings Corporation, including Vice President of Small Stores . Earl Carlton (Carl) Ford IV has served as Executive Vice President and Chief Financial Officer since July 2023. Mr.
Lawrence has served as Chief Executive Officer and a member of the Board of Directors since June 2023. Mr. Lawrence joined the Company in February 2019 as Executive Vice President and Chief Merchandising Officer. Prior to joining the Company, Mr.
Johnson 58 President Earl Carlton (Carl) Ford IV 47 Executive Vice President and Chief Financial Officer Matthew (Matt) M. McCabe 54 Executive Vice President and Chief Merchandising Officer Steven (Steve) P. Lawrence has served as Chief Executive Officer and a member of the Board of Directors since June 2023. Mr.
We also partner with school districts, Historically Black Colleges and Universities (HBCUs), collegiate and professional sports properties, local parks, hunting and fishing organizations, military bases and local first responders. Distribution Centers We operate three distribution centers in Katy, Texas; Twiggs County, Georgia; and Cookeville, Tennessee.
We are committed to making a positive impact on the communities we serve and partner with over 542 organizations, including youth sports leagues that reach approximately 600,000 participants. We also partner with school districts, Historically Black Colleges and Universities (HBCUs), collegiate and professional sports properties, local parks, hunting and fishing organizations, military bases and local first responders.
The Academy Credit Card program and Academy Sports + Outdoors app are foundational to build loyalty among customers while providing a seamless omnichannel shopping experience. 10 We are committed to making a positive impact on the communities we serve and partner with over 750 organizations, including youth sports leagues that reach approximately 400,000 participants.
In July 2024, we launched our myAcademy loyalty program, which provides us a powerful tool to build a deeper connection and understanding of our customers. The Academy Credit Card program, myAcademy loyalty program, and Academy Sports + Outdoors app are foundational to build loyalty among customers while providing a seamless omnichannel shopping experience.
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Sporting goods shoppers consistently rate us as the top retailer for offering sporting and outdoor recreation products for a wide range of customers and being a one-stop shop. We carefully curate our products to provide the right assortment that appeals to customers from beginners to experts, including families and casual participants.
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Merchandising Our merchandise consists of a full range of industry-leading national brands and strong private brands providing our customers with diversified product categories of good, better, best price points. We deliver Academy’s unique product assortment through our strong partnerships with our vendors. In 2024, we purchased merchandise from approximately 1,500 vendors.
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Merchandising Our merchandise consists of national brand products that we purchase and license from various vendors, private label brand products that we brand with our internal brands and exclusive license products that we purchase and license from vendors and carry exclusively.
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For 2024, 2023 and 2022 no vendor represented more than 11% of our total purchases. Our relationships with key brands, on-trend private brands, and exclusive product offerings differentiates our assortment from our peers.
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We have long-standing relationships with many of our suppliers and have partnered with them to grow our business over time. In 2023, we purchased merchandise from approximately 1,400 vendors. For 2023, 2022 and 2021 no vendor represented more than 11% of our total purchases.
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Throughout our stores, distribution centers, and corporate headquarters, we employ policies, procedures, and training to promote safe and healthy work environments.
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As a result, we have reclassified sales between divisions for 2022 and 2021 for comparability purposes. This reclassification is in divisional presentation only and did not impact the overall net sales balances previously disclosed. (2) E-commerce sales consist of 10.7%, 10.7% and 9.3% of merchandise sales for 2023, 2022 and 2021, respectively.
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Information about our Executive Officers Below is a list of our executive officers, their respective ages as of March 20, 2025 and a brief account of the business experience of each of them. 12 Name Age Position Steven (Steve) P. Lawrence 57 Chief Executive Officer Samuel (Sam) J.
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We are focused on implementing and continually improving our customer centric marketing technologies, omnichannel services and experiences to save customers time and money while improving the long term health of our customer portfolio.
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Specifically, we are subject to regulation by numerous federal, state and local regulatory agencies and authorities, including the U.S.
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At Academy, we believe the diversity of our team members, customers, and all others with whom we interact enhances the quality of our work environment and our customers’ shopping experience. Academy encourages team members to work together and to value the strengths each team member brings to the team.
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Our strategy begins with attracting, recruiting, developing, and retaining team members with backgrounds that are representative of our diverse communities because it makes our company and communities stronger. We require all team members to complete unintentional bias training to help eliminate biases from recruiting, hiring, promotions, job assignments and opportunities, evaluations, compensation, and customer service.
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In 2020, we established our Diversity, Inclusion and Belonging Committee, and they led the organization in the creation of our team member led Diversity, Inclusion and Belonging groups throughout the Company.
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These groups provide a forum for team members with common interests and/or backgrounds to connect, network, and provide input on issues related events while helping educate and celebrate our team members' diverse backgrounds and experiences. Talent Management.
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Name Age Position Ken C. Hicks 71 Executive Chairman Steven (Steve) P. Lawrence 56 Chief Executive Officer Samuel (Sam) J. Johnson 57 President Earl Carlton (Carl) Ford IV 46 Executive Vice President and Chief Financial Officer Matthew (Matt) M. McCabe 53 Executive Vice President and Chief Merchandising Officer Ken C.
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Hicks has served as the Executive Chairman of the Board of Directors since June 1, 2023. Mr. Hicks served as Chairman of the Board and Chief Executive Officer from May 2018 to June 2023. Mr.
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Hicks has served as a member of the Board of Directors since June 2020 and served as a member of the Board of Managers of New Academy Holding Company, LLC from May 2017 to June 2020. Mr.
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Hicks previously served as President and Chief Executive Officer at Foot Locker, Inc. from August 2009 to February 2010, and also served as Chairman, President and Chief Executive Officer at Foot Locker, Inc. from February 2010 to November 2014, and as Executive Chairman at Foot Locker, Inc. from December 2014 to May 2015. Prior to joining Foot Locker, Inc., Mr.
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Hicks held senior positions at J.C. Penney Company, Inc., Payless ShoeSource, Home Shopping Network, May Department Stores Company, and McKinsey & Company. Mr. Hicks has served on the board of directors of Avery Dennison Corporation since July 2007, and as Chairman of the board of directors of Guitar Center Holdings, Inc. since October 2023. Previously, Mr.
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Hicks served on the board of directors and the Compensation Committee of Whole Foods Market, Inc. from May 2017 to August 2017. Mr. Hicks graduated from the United States Military Academy located in West Point, NY, and served in the U.S. Army. He also earned a Masters of Business Administration with highest distinction from Harvard Business School. Steven (Steve) P.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

110 edited+17 added−18 removed224 unchanged
Biggest changeConsumer spending on sporting goods, sports and casual apparel and footwear, and outdoor recreation products could decrease or be displaced by spending on other activities due to a number of factors, including: • shifts in behavior away from team sports and outdoor activities in favor of travel, media (including social media) and electronics-driven leisure activities; • state, local and federal government budget cuts on facilities and activities, such as school athletic budgets, parks, ball fields, recreational sports leagues, hunting and fishing services, etc.; • weak economic conditions, recession, inflation or other factors, such as global or local pandemics; • legal and regulatory changes in federal and state hunting and fishing seasons, bag limits and firearm and ammunition restrictions; • consumer activism relating to controversial products we may carry, services we may perform, or our corporate philosophy, including those relating to firearms and ammunition, which could cause them to take their retail business elsewhere; • escalating costs of sporting and outdoor activities due to adverse changes in economic conditions, including inflation, rising fuel prices, rising participation fees and rising sporting license fees; and • severe weather and natural or man-made disasters (e.g., an oil spill closing large areas of hunting or fishing), including heat waves, freezes, hurricanes, tornadoes, large storms and floods, and the effects of such events on consumer demand for certain seasonal goods and the ability of large urban areas to continue spending on sporting goods and outdoor recreation products. 17 Total consumer spending may not continue to increase at historical rates due to slowed production growth and shifts in population demographics, and it may not increase in certain product categories given changes in consumer interests and participation rates.
Biggest changeConsumer spending on sporting goods, sports and casual apparel and footwear, and outdoor recreation products could decrease or be displaced by spending on other activities due to a number of factors, including: • shifts in behavior away from team sports and outdoor activities in favor of travel, media (including social media) and electronics-driven leisure activities; • state, local and federal government budget cuts on facilities and activities, such as school athletic budgets, parks, ball fields, recreational sports leagues, hunting and fishing services, etc.; • weak economic conditions, recession, inflation or other factors, such as global or local pandemics; • legal and regulatory changes in federal and state hunting and fishing seasons, bag limits and firearm and ammunition restrictions; • consumer activism relating to controversial products we may carry, services we may perform, or our corporate philosophy, including those relating to firearms and ammunition, which could cause them to take their retail business elsewhere; • escalating costs of sporting and outdoor activities due to adverse changes in economic conditions, including inflation, rising fuel prices, rising participation fees and rising sporting license fees; and • severe weather and natural or man-made disasters (e.g., an oil spill closing large areas of hunting or fishing), including heat waves, freezes, hurricanes, tornadoes, large storms and floods.
The techniques used by threat actors to attack or access systems and data evolve and may not be recognized until or after being launched against a target. We may not have the resources or technical sophistication to anticipate, prevent or stop new or evolving cybersecurity incidents, including attacks to our information systems and data and those of our partners.
The techniques used by threat actors to attack or access information systems and data evolve and may not be recognized until or after being launched against a target. We may not have the resources or technical sophistication to anticipate, prevent or stop new or evolving cybersecurity incidents, including attacks to our information systems and data and those of our partners.
If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full.
If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full.
If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full.
If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full.
For example, we are, and may in the future, be subject to claims, demands and lawsuits, and we may suffer losses and adverse effects to our reputation, related to: • injuries or crimes associated with merchandise we sell, that has been associated with an increased risk of injury, including but not limited to firearms, ammunition, firearm accessories, air pistols, crossbows and other archery equipment, knives, deer stands and other hunting equipment, trampolines, wheeled goods such as bicycles and ride-on toys, certain merchandise qualifying as hazardous material and other products; • product liability claims from customers or actions required or penalties assessed by government agencies relating to products we sell, including but not limited to products that are recalled, defective or otherwise alleged to be harmful; • the design, purchase, manufacture, import, distribution and sale of our private label brand products; • the procurement, transportation, storage, distribution and sale of firearms and ammunition, including improper performance of federally mandated procedures for determining customer firearm purchase eligibility (such as age and residency verification, background checks and proper completion of required paperwork); • municipalities or other organizations attempting to recover costs from firearm manufacturers and retailers, relating to the use of firearms and ammunition; • the operations of a fleet of trucks for distribution purposes, including transportation of hazardous materials by such fleet; • the procurement and ownership, leasing or operation of property for retail stores, distribution centers and other corporate needs; • the alleged infringement upon intellectual property rights to merchandise we sell or technology or services we use, including information technology, marketing and advertising services; • global sourcing, including international, customs and trade issues; • real estate issues, including construction, leasing, zoning and environmental issues; • employment issues, including actions by team members, the Equal Employment Opportunity Commission, the Department of Labor, the Occupational Safety and Health Administration and other federal and state employment agencies; • commercial disputes, including contractual and business disputes with vendors, landlords, or competitors; • tort, personal injury and property damage claims related to our stores, e-commerce, distribution centers or corporate headquarters; • unauthorized access to our information systems or facilities that results in a breach of data security or privacy; and • regulatory compliance, including relating to consumer protection, marketing and advertising, product safety, workplace safety, firearms, ammunition and related accessories, knives, import/export customs, taxes, tariffs, duties, and surcharges, data security and privacy, food and other regulated products, accounting, labor and employment, environmental matters, and hazardous materials.
For example, we are, and may in the future, be subject to claims, demands and lawsuits, and we may suffer losses and adverse effects to our reputation, related to: • injuries or crimes associated with merchandise we sell, that has been associated with an increased risk of injury, including but not limited to firearms, ammunition, firearm accessories, air pistols, crossbows and other archery equipment, knives, deer stands and other hunting equipment, trampolines, wheeled goods such as bicycles and ride-on toys, certain merchandise qualifying as hazardous material and other products; • product liability claims from customers or actions required or penalties assessed by government agencies relating to products we sell, including but not limited to products that are recalled, defective or otherwise alleged to be harmful; • the design, purchase, manufacture, import, distribution and sale of our private label brand products; • the procurement, transportation, storage, distribution and sale of firearms and ammunition, including improper performance of federally mandated procedures for determining customer firearm purchase eligibility (such as age and residency verification, background checks and proper completion of required paperwork); • municipalities or other organizations attempting to recover costs from firearm manufacturers and retailers, relating to the use of firearms and ammunition; • the operations of a fleet of trucks for distribution purposes, including transportation of hazardous materials by such fleet; • the procurement and ownership, leasing or operation of property for retail stores, distribution centers and other corporate needs; • the alleged infringement upon intellectual property rights to merchandise we sell or technology or services we use, including information technology, marketing and advertising services; • global sourcing, including international, customs and trade issues; • real estate issues, including construction, leasing, zoning and environmental issues; 31 • employment issues, including actions by team members, the Equal Employment Opportunity Commission, the Department of Labor, the Occupational Safety and Health Administration and other federal and state employment agencies; • commercial disputes, including contractual and business disputes with vendors, landlords, or competitors; • tort, personal injury and property damage claims related to our stores, e-commerce, distribution centers or corporate headquarters; • unauthorized access to our information systems or facilities that results in a breach of data security or privacy; and • regulatory compliance, including relating to consumer protection, marketing and advertising, product safety, workplace safety, firearms, ammunition and related accessories, knives, import/export customs, taxes, tariffs, duties, and surcharges, data security and privacy, food and other regulated products, accounting, labor and employment, environmental matters, and hazardous materials.
From time to time, our information systems may require repair, upgrade, enhancement, integration and/or replacement for us to maintain successful current operations and achieve future sales and store growth. 21 Updating our existing information systems subjects us to numerous risks, including: • loss of information; • disruption of normal operations; • changes in accounting or other operating procedures; • changes in internal control over financial reporting or general computer controls; • problems maintaining accuracy of historical data; • allocation and dedication of key business resources to the updating of existing systems; • ability to attract and retain adequate experienced technical resources and third-party contractors for the updating of existing systems; • unknown impact on remaining systems; • adequacy of training and change management to address critical changes in business processes and job functions; and • updated information system ultimately does not meet the needs of the business.
From time to time, our information systems may require repair, upgrade, enhancement, integration and/or replacement for us to maintain successful current operations and achieve future sales and store growth. 17 Updating our existing information systems subjects us to numerous risks, including: • loss of information; • disruption of normal operations; • changes in accounting or other operating procedures; • changes in internal control over financial reporting or general computer controls; • problems maintaining accuracy of historical data; • allocation and dedication of key business resources to the updating of existing systems; • ability to attract and retain adequate experienced technical resources and third-party contractors for the updating of existing systems; • unknown impact on remaining systems; • adequacy of training and change management to address critical changes in business processes and job functions; and • updated information system ultimately does not meet the needs of the business.
The credit agreements governing the Term Loan and the ABL Facility and the indenture governing the Notes contain restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our best interest, including restrictions on our ability to: • incur additional indebtedness and guarantee indebtedness; • pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock; • prepay, redeem or repurchase certain debt; • make loans, investments and other restricted payments; • sell or otherwise dispose of assets; • incur liens; • enter into transactions with affiliates; • alter the businesses we conduct; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • consolidate, merge or sell all or substantially all of our assets. 36 Additionally, at certain times, the ABL Facility requires maintenance of a certain minimum adjusted fixed charge coverage ratio.
The credit agreements governing the Term Loan and the ABL Facility and the indenture governing the Notes contain restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our best interest, including restrictions on our ability to: • incur additional indebtedness and guarantee indebtedness; • pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock; • prepay, redeem or repurchase certain debt; • make loans, investments and other restricted payments; • sell or otherwise dispose of assets; • incur liens; • enter into transactions with affiliates; • alter the businesses we conduct; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • consolidate, merge or sell all or substantially all of our assets. 35 Additionally, at certain times, the ABL Facility requires maintenance of a certain minimum adjusted fixed charge coverage ratio.
Unforeseen events, including public health events, such as pandemics, natural disasters, such as earthquakes, hurricanes, tornadoes, freezes, snow or ice storms, floods and heavy rains, heatwaves, and man-made disasters, such as an oil spill closing large areas of hunting or fishing, could disrupt our operations or the operations of our suppliers, as well as the behavior of our consumers.
Unforeseen events, including public health events, such as pandemics, natural disasters, such as earthquakes, hurricanes, tornadoes, freezes, snow or ice storms, floods and heavy rains, heatwaves, and man-made disasters, such as an oil spill closing large areas of hunting or fishing, could disrupt our operations or the operations of our suppliers, as well as affect the behavior of our consumers.
Adverse financial and economic conditions, including as a result of continued increases in interest rates, may adversely affect our ability to draw on our ABL Facility, the ability of banks to honor draws on our ABL Facility or our ability to obtain incremental term loan facilities or access the equity and debt capital markets.
Adverse financial and economic conditions, including as a result of increases in interest rates, may adversely affect our ability to draw on our ABL Facility, the ability of banks to honor draws on our ABL Facility or our ability to obtain incremental term loan facilities or access the equity and debt capital markets.
Also, the imposition of trade tariffs, sanctions or other regulations against merchandise imported by us, or the loss of “normal trade relations” status with the countries in which we or our vendors obtain merchandise or raw materials, could significantly increase our cost of products imported into the United States and harm our business.
The imposition of trade tariffs, sanctions or other regulations against merchandise imported by us, or the loss of “normal trade relations” status with the countries in which we or our vendors obtain merchandise or raw materials, could significantly increase our cost of products imported into the United States and harm our business.
As a result, any such claim made by or against us or our failure to protect our intellectual property could have an adverse effect on our results of operations. 34 Risks Related to Our Indebtedness Our level of indebtedness requires that we dedicate a portion of our cash flows to debt service payments and reduces the funds that would otherwise be available for other general corporate purposes and other business opportunities, which could adversely affect our operating performance, growth, profitability and financial condition, which in turn could make it more difficult for us to generate cash flow sufficient to satisfy all of our obligations under our indebtedness.
As a result, any such claim made by or against us or our failure to protect our intellectual property could have an adverse effect on our results of operations. 33 Risks Related to Our Indebtedness Our level of indebtedness requires that we dedicate a portion of our cash flows to debt service payments and reduces the funds that would otherwise be available for other general corporate purposes and other business opportunities, which could adversely affect our operating performance, growth, profitability and financial condition, which in turn could make it more difficult for us to generate cash flow sufficient to satisfy all of our obligations under our indebtedness.
If some or our entire workforce were to become unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements or work practice, it could have a material adverse effect on our business, financial condition and results of operations.
If some or all of our entire workforce were to become unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements or work practice, it could have a material adverse effect on our business, financial condition and results of operations.
This could negatively impact the profitability of new and existing stores and potentially limit the number of viable new store locations or replacement store locations for expiring store leases. 37 Our successful retail strategy is partially attributable to our ability to negotiate favorable trade terms with our vendors.
This could negatively impact the profitability of new and existing stores and potentially limit the number of viable new store locations or replacement store locations for expiring store leases. Our successful retail strategy is partially attributable to our ability to negotiate favorable trade terms with our vendors.
As a result, our stockholders may be limited in their ability to obtain a premium for their shares. 39 Our amended and restated certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders and the federal district courts will be the exclusive forum for Securities Act claims, which could limit our stockholders’ ability to bring a suit in a different judicial forum than they may otherwise choose for disputes with us or our directors, officers, team members or stockholders.
As a result, our stockholders may be limited in their ability to obtain a premium for their shares. 38 Our amended and restated certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders and the federal district courts will be the exclusive forum for Securities Act claims, which could limit our stockholders’ ability to bring a suit in a different judicial forum than they may otherwise choose for disputes with us or our directors, officers, team members or stockholders.
Even if a claim is unsuccessful or is not fully pursued, the negative publicity surrounding any such assertions could adversely affect our reputation. 33 We maintain insurance coverage with third-party insurers.
Even if a claim is unsuccessful or is not fully pursued, the negative publicity surrounding any such assertions could adversely affect our reputation. We maintain insurance coverage with third-party insurers.
In addition, in the event of a default, the lenders under the ABL Facility could terminate their further commitments to loan money and our secured lenders under the Term Loan and the ABL Facility and/or holders of the Notes could foreclose against the assets securing their borrowings, and we could be forced into bankruptcy or liquidation. 35 Despite our level of indebtedness, we may still be able to incur substantially more debt, which could further increase the risks to our financial condition described above.
In addition, in the event of a default, the lenders under the ABL Facility could terminate their further commitments to loan money and our secured lenders under the Term Loan and the ABL Facility and/or holders of the Notes could foreclose against the assets securing their borrowings, and we could be forced into bankruptcy or liquidation. 34 Despite our level of indebtedness, we may still be able to incur substantially more debt, which could further increase the risks to our financial condition described above.
For example, ransomware events could cause key systems to be unavailable for use, or credential stuffing attacks of customer accounts on our website could cause customer privacy breaches and authorized charges to payment or gift cards, or phishing/smishing attacks, in which attackers masquerade as a trustworthy entity in an electronic communication (including email or text message), could gain control of a user's device and/or credentials.
For example, ransomware events could cause key systems to be unavailable for use, or credential stuffing attacks of customer accounts on our website could cause customer privacy breaches and unauthorized charges to payment or gift cards, or phishing/smishing attacks, in which attackers masquerade as a trustworthy entity in an electronic communication (including email or text message), could gain control of a user's device and/or credentials.
Our e-commerce activities also carry challenges such as identifying our e-commerce customer, marketing our website, establishing a profitable on-line merchandising mix, managing shipping costs to our customers, setting prices to compete against other on-line retailers, maintaining website content, timely and accurately fulfilling orders, integrating our e-commerce business with our store operations, and growing the operation as part of our overall strategic plan.
Our e-commerce activities also carry challenges such as identifying our e-commerce customer, marketing our website, establishing a profitable on-line merchandising mix, managing shipping costs to our customers, setting prices to compete against other on-line retailers, maintaining accurate website content and functionality, timely and accurately fulfilling orders, integrating our e-commerce business with our store operations, and growing the operation as part of our overall strategic plan.
Our e-commerce operations are subject to numerous risks that could have a material adverse impact on our overall results of operations, including: • expansion of our sales across the United States, thereby, subjecting us to the regulatory and other requirements of the 50 states; • website operating issues, including website availability, system reliability, website operation, Internet connectivity, website errors, computer viruses, telecommunication failures, electronic break-ins or similar disruptions; • the need to keep pace with rapid technological change and investments from competitors, and maintain investments necessary for our e-commerce operation; • legal compliance issues related to the online sale of merchandise; • intellectual property litigation related to the enforcement of patent rights; • privacy and personal data security; • protection against credit card and gift card fraud; • fulfillment, inventory control and shipping issues for e-commerce transactions; • tax issues, including state sales tax collection for e-commerce transactions; • hiring, retention and training of personnel qualified to conduct our e-commerce operation; • ability to procure adequate computer hardware and software and technology services and solutions from third-party providers; and • reduction in visits to, diversion and/or cannibalization of sales from, existing retail stores.
Our e-commerce operations are subject to numerous risks that could have a material adverse impact on our overall results of operations, including: 19 • expansion of our sales across the United States, thereby, subjecting us to the regulatory and other requirements of the 50 states; • website operating issues, including website availability, system reliability, website operation, Internet connectivity, website errors, computer viruses, telecommunication failures, electronic break-ins or similar disruptions; • overall website design and functionality, including search capabilities; • the need to keep pace with rapid technological change and investments from competitors, and maintain investments necessary for our e-commerce operation; • legal compliance issues related to the online sale of merchandise; • intellectual property litigation related to the enforcement of patent rights; • privacy and personal data security; • protection against credit card and gift card fraud; • fulfillment, inventory control and shipping issues for e-commerce transactions; • tax issues, including state sales tax collection for e-commerce transactions; • hiring, retention and training of personnel qualified to conduct our e-commerce operation; • ability to procure adequate computer hardware and software and technology services and solutions from third-party providers; and • reduction in visits to, diversion and/or cannibalization of sales from, existing retail stores.
A prolonged period of depressed consumer spending could have a material adverse effect on our business. 16 Additionally, if the U.S. or global economy experiences a crisis or downturn, including any capital markets volatility or government intervention in the financial markets, or if the U.S. or global economy experiences a prolonged period of decelerating or negative growth, then our liquidity, capital resources or results of operations could be materially and adversely impacted.
A prolonged period of depressed consumer spending could have a material adverse effect on our business. 15 Additionally, if the U.S. or global economy experiences a crisis or downturn, including any capital markets volatility or government intervention in the financial markets, or if the U.S. or global economy experiences a prolonged period of decelerating or negative growth, then our liquidity, capital resources or results of operations could be materially and adversely impacted.
If there is a disruption in supply from a principal supplier (which can occur for various reasons in or out of the control of these suppliers, including as a result of public health emergencies, such as the COVID-19 pandemic, and measures taken by the Chinese government or other governments in response to such events), we may experience merchandise out-of-stocks, delivery delays or increased delivery costs, or otherwise be unable to obtain the same merchandise from other suppliers in a timely and efficient manner and on acceptable terms, or at all, which could materially affect our results of operations and our customers’ confidence in us.
If there is a disruption in supply from a principal supplier (which can occur for various reasons in or out of the control of these suppliers, including as a result of public health emergencies, and measures taken by the Chinese government or other governments in response to such events), we may experience merchandise out-of-stocks, delivery delays or increased delivery costs, or otherwise be unable to obtain the same merchandise from other suppliers in a timely and efficient manner and on acceptable terms, or at all, which could materially affect our results of operations and our customers’ confidence in us.
Some personal data and personally identifiable information may be deemed sensitive or otherwise protected under applicable laws or regulations and may be subject to specific requirements for collection, processing, security, and disposal. We and our partners rely on commercially available information security technology and industry standard operational practices for collecting, storing, maintaining, transmitting, protecting, and processing data.
Some personal data and personally identifiable information may be deemed sensitive or otherwise protected under applicable laws or regulations and may be subject to specific requirements for collection, processing, sharing, security, and disposal. 20 We and our partners rely on commercially available information security technology and industry standard operational practices for collecting, storing, maintaining, transmitting, protecting, and processing data.
Consumer Product Safety Commission, Equal Employment Opportunity Commission, Department of Labor, Occupational Safety and Health Administration, Department of Justice (DOJ), Department of Treasury, Federal Trade Commission, Customs and Border Protection, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), SEC, Internal Revenue Service, or IRS, and Environmental Protection Agency and comparable state and local agencies.
Consumer Product Safety Commission, Equal Employment Opportunity Commission, Department of Labor, Occupational Safety and Health Administration, Department of Justice (DOJ), Department of Treasury, Federal Trade Commission, Customs and Border Protection, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Securities and Exchange Commission (SEC), Internal Revenue Service, or IRS, and Environmental Protection Agency and comparable state and local agencies.
The prices charged for the merchandise that we purchase by foreign manufacturers may be affected by the fluctuation of their local currency against the U.S. dollar. In addition, the federal government periodically considers other restrictions on the importation of products obtained by our vendors and us.
Additionally, the prices charged for the merchandise that we purchase by foreign manufacturers may be affected by the fluctuation of their local currency against the U.S. dollar. 16 In addition, the federal government periodically considers other restrictions on the importation of products obtained by our vendors and us.
The security of our information systems (including our technology infrastructure and networks, third party services, and hosted and on-premises software) and data (including from our customers, team members and partners) is critical to our business as a retailer, and we devote significant resources to protecting our information systems and data.
The security of our information systems (including our technology infrastructure and networks, third party services, artificial intelligence, and hosted and on-premises software) and data (including from our customers, team members and partners) is critical to our business as a retailer, and we devote significant resources to protecting our information systems and data.
The general conditions that affect U.S. consumer discretionary spending in our markets include: • health of the economy; • consumer confidence in the economy; • wages, jobs and unemployment trends; • public health events (such as the COVID-19 pandemic) and their effect on our customers, team members, vendors/suppliers and other stakeholders; • the housing market, including real estate prices and mortgage rates; • consumer credit availability; • consumer debt levels; • gasoline and fuel prices; • interest rates and inflation; • tax rates and tax policy; • immigration policy; • import and customs duties/tariffs and policy; • impact of natural or man-made disasters; • legislation and regulations; • international unrest, trade disputes, labor shortages, and other disruptions to the supply chain; • changes to raw material and commodity prices; and • national and international security and safety concerns.
The general conditions that affect U.S. consumer discretionary spending in our markets include: • health of the economy; • consumer confidence in the economy; • wages, jobs and unemployment trends; • public health events (such as pandemics and epidemics) and their effect on our customers, team members, vendors/suppliers and other stakeholders; • the housing market, including real estate prices and mortgage rates; • consumer credit availability; • consumer debt levels; • gasoline and fuel prices; • interest rates and inflation; • tax rates and tax policy; • immigration policy; • import and customs duties/tariffs and policy; • impact of natural or man-made disasters; • legislation and regulations; • international unrest, trade disputes, labor shortages, and other disruptions to the supply chain; • changes to raw material and commodity prices; and • national and international security and safety concerns.
A significant portion of the merchandise that we sell is manufactured in foreign countries, including China, which exposes us to various international risks that could have a material adverse effect on our business and results of operations.
A significant portion of the merchandise that we sell is manufactured in foreign countries, including China, which exposes us to various international risks, including additional tariffs, that could have a material adverse effect on our business and results of operations.
Our quarterly results of operations and comparable sales have historically fluctuated, and may continue to fluctuate, as a result of factors outside our control, including: • general regional and national economic conditions; • consumer confidence in the economy; • unseasonal or extreme weather conditions, natural or man-made disasters or public health emergencies (such as snow storms, hurricanes, tornadoes, floods, pandemics, and civil disturbances); • catastrophic or tragic events (such as tragedies involving firearms); • changes in demand for the products that we offer in our stores; • lack of new product introduction; • lockouts or strikes involving professional sports teams; • retirement of sports superstars used in marketing various products; • sports scandals, including those involving leagues, associations, teams or athletes with ties to us or our markets; • costs related to the closure of existing stores; • litigation; • the success or failure of college and professional sports teams in our markets; • expansion of existing or entry of new competitors into our markets; • consolidation of competitors in our markets; • shift in consumer tastes and fashion trends; • calendar shifts or holiday or seasonal periods; • the timing of income tax refunds to customers; • changes in laws and regulations, politics or consumer advocacy affecting our business, including sentiment relating to the sale of firearms and ammunition; • cancellations of tax-free holidays in certain states; • pricing, promotions or other actions taken by us or our existing or possible new competitors; and • changes in other tenants or landlords or surrounding geographic circumstances in the shopping centers in which we are located.
Our quarterly results of operations and comparable sales have historically fluctuated, and may continue to fluctuate, as a result of factors outside our control, including: 28 • general regional and national economic conditions; • consumer confidence in the economy; • unseasonal or extreme weather conditions, natural or man-made disasters or public health emergencies (such as snow storms, hurricanes, tornadoes, floods, pandemics, and civil disturbances); • catastrophic or tragic events (such as tragedies involving firearms); • changes in demand for the products that we offer in our stores; • lack of, or access to, new products or brands; • lockouts or strikes involving professional sports teams; • retirement of sports superstars used in marketing various products; • sports scandals, including those involving leagues, associations, teams or athletes with ties to us or our markets; • costs related to the closure of existing stores; • litigation; • the success or failure of college and professional sports teams in our markets; • expansion of existing or entry of new competitors into our markets; • the impact of competitive developments in our markets; • shift in consumer tastes and fashion trends; • calendar shifts or holiday or seasonal periods; • the timing of income tax refunds to customers; • changes in laws and regulations, politics or consumer advocacy affecting our business, including sentiment relating to the sale of firearms and ammunition; • cancellations of tax-free holidays in certain states; • pricing, promotions or other actions taken by us or our existing or possible new competitors; and • changes in other tenants or landlords or surrounding geographic circumstances in the shopping centers in which we are located.
Maintaining and continuing to improve our e-commerce platform involves substantial investment of capital and resources, integrating a number of information and management systems from different vendors, increasing supply chain and distribution capabilities, attracting, developing and retaining qualified personnel with relevant subject matter expertise, and effectively managing and improving the customer experience.
Maintaining and continuing to improve our e-commerce platform involves substantial investment of capital and resources, integrating a number of information and management systems from different vendors, artificial intelligence initiatives, increasing supply chain and distribution capabilities, attracting, developing and retaining qualified personnel with relevant subject matter expertise, and effectively managing and improving the customer experience.
You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise. We have approximately 226 million shares of common stock authorized but unissued.
You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise. We have approximately 232 million shares of common stock authorized but unissued.
Our strategy includes opening stores in existing markets and, from time to time, new markets.
Our growth strategy includes opening stores in existing markets and, from time to time, new markets.
We may be unable to meet our labor needs and control our costs due to external factors such as the availability of a sufficient number of qualified persons in the work force of the markets in which we operate, competition, unemployment levels, demand for certain labor expertise, prevailing wage rates, wage inflation, changing demographics, health and other insurance costs, adoption of new or revised employment and labor laws and regulations, and the impacts of man-made or natural disasters, such as tornadoes, hurricanes, and public health events, such as the COVID-19 pandemic.
We may be unable to meet our labor needs and control our costs due to external factors such as the availability of a sufficient number of qualified persons in the work force of the markets in which we operate, competition, unemployment levels, changes in immigration laws, demand for certain labor expertise, prevailing wage rates, wage inflation, changing demographics, health and other insurance costs, adoption of new or revised employment and labor laws and regulations, and the impacts of man-made or natural disasters, such as tornadoes, hurricanes, and public health events.
The trading price of our common stock may be highly volatile and may be adversely affected due to a number of factors, many of which are beyond our control, including without limitation those listed elsewhere under this “Risk Factors” section, and the following: • results of operations that vary from the expectations of securities analysts and investors; • results of operations that vary from those of our competitors; • changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; • changes in economic conditions for companies in our industry; • changes in market valuations of, or earnings and other announcements by, companies in our industry; • declines in the market prices of stocks generally, particularly those of sporting goods and outdoor recreation retail companies; • additions or departures of key management personnel; • strategic actions by us or our competitors; • announcements by us, our competitors, our suppliers of significant contracts, price reductions, new products or technologies, acquisitions, dispositions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments; • changes in preference of our customers and our market share; • changes in general economic or market conditions or trends in our industry or the economy as a whole; • changes in governmental fiscal policy or interest rate regulation; • changes in business or regulatory conditions; • future sales of our common stock or other securities, or the perception that such sales may occur; • investor perceptions of or the investment opportunity associated with our common stock relative to other investment alternatives; • changes in the way we are perceived in the marketplace, including due to negative publicity or campaigns on social media to boycott certain of our products, our business or our industry; • the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; • changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business; • announcements relating to litigation or governmental investigations; • guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; • the development and sustainability of an active trading market for our common stock; • changes in accounting principles; and • other events or factors, including those resulting from informational technology system failures and disruptions, epidemics, pandemics, natural disasters, acts of terrorism, civil unrest, wars or responses to these events. 38 Furthermore, the stock market may experience extreme volatility that, in some cases, may be unrelated or disproportionate to the operating performance of particular companies.
The trading price of our common stock may be highly volatile and may be adversely affected due to a number of factors, many of which are beyond our control, including without limitation those listed elsewhere under this “Risk Factors” section, and the following: • results of operations that vary from the expectations of securities analysts and investors; • results of operations that vary from those of our competitors; • changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; • changes in economic conditions for companies in our industry; • changes in market valuations of, or earnings and other announcements by, companies in our industry; • declines in the market prices of stocks generally, particularly those of sporting goods and outdoor recreation retail companies; • additions or departures of key management personnel; • strategic actions by us or our competitors; • announcements by us, our competitors, our suppliers of significant contracts, price reductions, new products or technologies, acquisitions, dispositions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments; • changes in preference of our customers and our market share; • changes in general economic or market conditions or trends in our industry or the economy as a whole; • changes in governmental fiscal policy or interest rate regulation; • changes in business or regulatory conditions; • future sales of our common stock or other securities, or the perception that such sales may occur; • investor perceptions of or the investment opportunity associated with our common stock relative to other investment alternatives; • changes in the way we are perceived in the marketplace, including due to negative publicity or campaigns on social media to boycott certain of our products, our business or our industry; • the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; • changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business; • announcements relating to litigation or governmental investigations; • guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; • changes in accounting principles; and • other events or factors, including those resulting from informational technology system failures and disruptions, epidemics, pandemics, natural disasters, acts of terrorism, civil unrest, wars or responses to these events.
Our customers provide payment card and gift card information, alternative payment information, and other personal information to purchase products or services, enroll in promotional programs, apply for credit, create accounts and make purchases on our website or mobile applications, or otherwise communicate and interact with us.
Our customers provide payment card and gift card information, alternative payment information, and other personal information to purchase products or services, enroll in promotional programs, apply for credit, create accounts and make purchases on our website or mobile applications, participate in our loyalty program, or otherwise communicate and interact with us.
We depend on approximately 1,400 suppliers to supply us in a timely and efficient manner with the merchandise we sell. Our significant dependence on these suppliers exposes us to various risks that could have a material adverse effect on our business and results of operations. In 2023, purchases from our largest vendor represented approximately 11% of our total inventory purchases.
We depend on approximately 1,500 suppliers to supply us in a timely and efficient manner with the merchandise we sell. Our significant dependence on these suppliers exposes us to various risks that could have a material adverse effect on our business and results of operations. In 2024, purchases from our largest vendor represented approximately 11% of our total inventory purchases.
As a result of damage to, or prolonged interruption of, operations or inventory at any of these facilities, or with respect to third-party transportation providers, due to a work stoppage, labor shortage, operations significantly below historical efficiency levels, supply chain disruption, public health events (such as pandemics), severe weather (such as tornadoes) or natural or man-made disasters (including events that may be caused or exacerbated by climate change), system failures or cyber incidents, slowdowns or strikes, acts of terror or other unforeseen events in the areas or regions of these facilities could impair our ability to adequately stock our stores, process returns of products to vendors and ship product to our e-commerce customers, thereby adversely affecting our sales and profitability.
A disruption or a prolonged interruption in the operations at any of these distribution centers or third-party transportation providers due to a work stoppage, labor shortage, operations significantly below historical efficiency levels, supply chain disruption, public health events (such as pandemics), severe weather (such as tornadoes) or natural or man-made disasters (including events that may be caused or exacerbated by climate change), system failures or cyber incidents, slowdowns or strikes, acts of terror or other unforeseen events in the areas or regions of these facilities could impair our ability to adequately stock our stores, process returns of products to vendors and ship products to our e-commerce customers, thereby adversely affecting our sales and profitability.
If we are unable to predict or effectively react to changes in consumer tastes and preferences, or if we fail to acquire and sell brand name merchandise at competitive prices, or if we are not successful in managing our inventory balances, then we may lose customers and our sales may decline and our results of operations may be negatively affected.
If we are not successful in managing our inventory balances, our results of operations may be negatively affected. 18 If we are unable to predict or effectively react to changes in consumer tastes and preferences, or if we fail to obtain access to, and sell brand name merchandise at competitive prices, then we may lose customers and our sales may decline and our results of operations may be negatively affected.
A significant portion of the merchandise that we sell, including merchandise we purchase from domestic suppliers and much of our private label brand merchandise, is manufactured in countries such as China, Vietnam, El Salvador and Bangladesh.
A significant portion of the merchandise that we sell, including merchandise we purchase from domestic suppliers and much of our private label brand merchandise, is manufactured in countries such as China, Bangladesh, Vietnam, and Brazil.
Some of the federal, state or local laws and regulations that affect us include but are not limited to: • consumer product safety, product liability or consumer protection laws; • laws related to advertising, marketing, pricing and selling our products, including but not limited to firearms, ammunition, and related accessories; • labor and employment laws, including wage and hour laws; • tax laws or interpretations thereof, including collection of state sales tax on e-commerce sales; • data protection and privacy laws and regulations; • environmental laws and regulations; • hazardous material laws and regulations; • customs or import and export laws and regulations, including collection of tariffs on product imports; • intellectual property laws; • antitrust and competition regulations; • banking and anti-money laundering regulations; • Americans with Disabilities Act, or ADA, and similar state and local laws and regulations; • website design and content regulations; and • securities and exchange laws and regulations.
Some of the federal, state or local laws and regulations that affect us include but are not limited to: • consumer product safety, product liability or consumer protection laws; • laws related to advertising, marketing, pricing and selling our products, including but not limited to firearms, ammunition, and related accessories; • labor and employment laws, including wage and hour laws; • immigration laws and regulations; • tax laws or interpretations thereof, including collection of state sales tax on e-commerce sales; • data protection and privacy laws and regulations; • environmental laws and regulations; • hazardous material laws and regulations; • customs or import and export laws and regulations, including collection of tariffs on product imports; • intellectual property laws; • antitrust and competition regulations; • banking and anti-money laundering regulations; • Americans with Disabilities Act, or ADA, and similar state and local laws and regulations; • website design and content regulations; and • securities and exchange laws and regulations. 30 We are a federally licensed firearms dealer and we sell firearms, ammunition, and related accessories.
Our comparable sales, net sales per square foot, customer traffic or average value per transaction may be adversely affected if, for example, our customers reduce their purchases with us due to continued high inflation, job losses, foreclosures, bankruptcies, higher consumer debt and interest rates, higher taxes, reduced access to credit, falling home prices and lower consumer confidence.
Our comparable sales, net sales per square foot, customer traffic or average value per transaction may be adversely affected if, for example, our customers reduce their purchases with us due to inflationary pressures, job losses, foreclosures, bankruptcies, higher consumer debt and interest rates, higher taxes, reduced access to credit, falling home prices and lower consumer confidence.
The extent and duration of the effect of these labor market challenges are subject to numerous factors, including availability of qualified persons in the markets where we and our contracted service providers operate and unemployment levels within these markets, behavioral changes, prevailing wage rates and other benefits, inflation, adoption of new or revised employment and labor laws and regulations (including increased minimum wage requirements) or government programs, safety levels of our operations, and our reputation within the labor market.
The extent and duration of the effect of these labor market challenges are subject to numerous factors, including availability of qualified persons in the markets where we and our contracted service providers operate and unemployment levels within these markets, behavioral changes, prevailing wage rates and other benefits, inflation, adoption of new or revised employment and labor laws and regulations (including immigration/visa processing) or government programs, safety levels of our operations, and our reputation within the labor market.
We are also subject to payment card association operating rules and agreements, including data security rules and agreements, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply.
We are also subject to payment card association operating rules and agreements, including data security rules and agreements, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply or increase our costs of compliance.
Each financial institution that is a lender under the ABL Facility is responsible on a several but not joint basis for providing a portion of the loans to be made under the facility.
One of our sources of liquidity is the ABL Facility. Each financial institution that is a lender under the ABL Facility is responsible on a several but not joint basis for providing a portion of the loans to be made under the facility.
If the products that we offer, including from both national brands and our private label brands, do not meet applicable safety standards or our customers’ expectations regarding safety, we could experience decreased sales, increased costs, and/or be exposed to legal and reputational risk.
Our sales and operating results could be adversely affected by product safety concerns. If the products that we offer, including from both national brands and our private label brands, do not meet applicable safety standards or our customers’ expectations regarding safety, we could experience decreased sales, increased costs, and/or be exposed to legal and reputational risk.
We have reserved shares for issuance under our New Academy Holding Company, LLC 2011 Unit Incentive Plan (the "2011 Equity Plan"), our 2020 Omnibus Incentive Plan (the "2020 Equity Plan"), and our 2020 Employee Stock Purchase Plan (the "ESPP").
We have reserved shares for issuance under our New Academy Holding Company, LLC 2011 Unit Incentive Plan (the “2011 Equity Plan”), our 2020 Omnibus Incentive Plan (the “2020 Equity Plan”), and our 2020 Employee Stock Purchase Plan (the “ESPP”).
Our products must appeal to a broad range of customers whose preferences cannot be predicted with certainty and are subject to change. We must identify, obtain supplies of, and offer to our customers, attractive, innovative and high-quality merchandise on a continuous basis.
Our products must appeal to a broad range of customers whose preferences cannot be predicted with certainty and are subject to change. We must identify and obtain access to a broad assortment of brands and styles, to enable us to offer to our customers, attractive, innovative and high-quality merchandise on a continuous basis.
The ABL Facility, under which we had no borrowings as of February 3, 2024, matures on November 6, 2025. The Notes (as defined in Note 4 of the accompanying financial statements) require semi-annual payments of interest (in arrears) and matures on November 15, 2027.
The ABL Facility, under which we had no borrowings as of February 1, 2025, matures on March 8, 2029. The Notes (as defined in Note 4 of the accompanying financial statements) require semi-annual payments of interest (in arrears) and matures on November 15, 2027.
As of February 3, 2024, we had no borrowings outstanding under the ABL Facility, and an available borrowing capacity under the ABL Facility of approximately $881.4 million (which is subject to customary borrowing conditions, including a borrowing base). We may be able to increase the commitments under the ABL Facility by $250.0 million, subject to certain conditions.
As of February 1, 2025, we had no borrowings outstanding under the ABL Facility, and an available borrowing capacity under the ABL Facility of approximately $955.5 million (which is subject to customary borrowing conditions, including a borrowing base). We may be able to increase the commitments under the ABL Facility by $250.0 million, subject to certain conditions.
We require many of our vendors to carry their own insurance, and we have indemnity agreements with many of our vendors, but we cannot be assured that (1) any specific claim or lawsuit will be subject to a vendor’s insurance or indemnity agreement, (2) our vendors will carry or maintain such insurance coverage or meet their indemnity obligations or (3) we will be able to collect payments from our vendors sufficient to offset liability losses or, in the case of our private label brand products, where almost all of the manufacturing occurs outside the United States, that we will be able to collect anything at all.
We require many of our vendors to carry their own insurance, and we have indemnity agreements with many of our vendors, but we cannot be assured that (1) any specific claim or lawsuit will be subject to a vendor’s insurance or indemnity agreement, (2) our vendors will carry or maintain such insurance coverage or meet their indemnity obligations or (3) we will be able to collect payments from our vendors sufficient to offset liability losses or, in the case of our private label brand products, where almost all of the manufacturing occurs outside the United States, that we will be able to collect anything at all. 32 With all claims and lawsuits, however, there is a risk that liabilities, fines and losses may not be covered by insurance or indemnity or may exceed insurance or indemnity coverage.
As of February 3, 2024, we had no borrowings outstanding under the ABL Facility (as defined in Note 4 of the accompanying financial statements), an available borrowing capacity under the ABL Facility of approximately $881.4 million (which is subject to customary borrowing conditions, including a borrowing base), and outstanding letters of credit of $11.6 million, all of which were issued under the ABL Facility.
As of February 1, 2025, we had no borrowings outstanding under the ABL Facility (as defined in Note 4 of the accompanying financial statements), an available borrowing capacity under the ABL Facility of approximately $955.5 million (which is subject to customary borrowing conditions, including a borrowing base), and outstanding letters of credit of $9.3 million, all of which were issued under the ABL Facility.
If we miscalculate the demand for our products generally or for our product mix during certain holiday or sporting seasons, our net sales could decline resulting in lower margins, higher labor costs as a percentage of sales and excess inventory, which would harm our financial performance.
We must carry a significant amount of inventory, particularly before these selling periods. If we miscalculate the demand for our products generally or for our product mix during certain holiday or sporting seasons, our net sales could decline resulting in lower margins, higher labor costs as a percentage of sales and excess inventory, which would harm our financial performance.
These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders.
Unless we remove or sunset some or all of these provisions, these anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders.
Since announcing this policy, ATF (a law enforcement agency in the DOJ) revoked 157 federal firearms licenses in 2023, compared to 88 licenses revoked in 2022 and five in the last six months of 2021.
In 2024, ATF (a law enforcement agency in the DOJ) revoked 147 federal firearms licenses and 157 in 2023, compared to 88 licenses revoked in 2022 and five in the last six months of 2021.
Pressure from our competitors could require us to reduce our prices or increase our spending for advertising and promotion. Traditional competitors have become increasingly promotional and, if our competitors reduce their prices, it may be difficult for us to reach our net sales goals without reducing our prices, which could impact our margins.
Traditional competitors have become increasingly promotional and, if our competitors reduce their prices, it may be difficult for us to reach our net sales goals without reducing our prices, which could impact our margins.
As of February 3, 2024, we had approximately $91.8 million outstanding under the Term Loan and $400.0 million outstanding under the Notes, all of which is secured.
As of February 1, 2025, we had approximately $88.8 million outstanding under the Term Loan and $400.0 million outstanding under the Notes, all of which is secured.
These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock is low. In the past, following periods of market volatility, stockholders have instituted securities class action litigation against various issuers.
In addition, price volatility may be greater if the public float and trading volume of our common stock is low. In the past, following periods of market volatility, stockholders have instituted securities class action litigation against various issuers.
A substantial rise in the price of raw materials could dramatically increase the costs associated with manufacturing the merchandise that we purchase from our suppliers, which could cause the price of our merchandise to increase and could have a negative impact on our sales and profitability. In addition, increases in commodity prices could also adversely affect our results of operations.
A substantial rise in the price of raw materials, including as a result of increases in commodity prices and tariffs on them, could dramatically increase the costs associated with manufacturing the merchandise that we purchase from our suppliers, which could cause the price of our merchandise to increase and could have a negative impact on our sales and profitability.
If we lose any of our brand name vendors or if any of our brand name vendors fail to supply us with their brand name merchandise, we may not be able to meet the demand of our customers for their brand names. We must maintain sufficient inventory levels of merchandise that our customers desire to successfully operate our business.
If we lose any of our brand name vendors or if any of our brand name vendors fail to supply us with their brand name merchandise, we may not be able to meet the demand of our customers for brand names merchandise.
Although we maintain business interruption and property insurance for these facilities, there can be no assurance that our insurance coverage will be sufficient, or that insurance proceeds will be timely paid to us, if our distribution centers are shut down or interrupted for any unplanned reason. 26 Our quarterly operating results and comparable sales may fluctuate due to seasonality and other factors outside of our control.
Although we maintain business interruption and property insurance for these facilities, there can be no assurance that our insurance coverage will be sufficient, or that insurance proceeds will be timely paid to us, if our distribution centers are shut down or interrupted for any unplanned reason.
In many foreign countries, particularly in those with developing economies, it may be a local custom that businesses operating in such countries engage in bribery and other business practices that are prohibited by the FCPA, the UKBA or other U.S. and foreign laws and regulations applicable to us. 31 We have internal policies, procedures and standards that we require all of our team members, agents and vendors to meet.
In many foreign countries, particularly in those with developing economies, it may be a local custom that businesses operating in such countries engage in bribery and other business practices that are prohibited by the FCPA, the UKBA or other U.S. and foreign laws and regulations applicable to us.
In addition, any alleged or actual failure to comply with applicable requirements could subject us to fines, sanctions, governmental investigations, lawsuits, reputational damage, and other risks and costs that may be difficult to anticipate but could become material.
In addition, any alleged or actual failure to comply with applicable requirements could subject us to fines, sanctions, governmental investigations, lawsuits, reputational damage, and other risks and costs that may be difficult to anticipate but could become material. Intense competition in the sporting goods and outdoor recreation retail industries could limit our growth and reduce our profitability.
Furthermore, our operating margins may be impacted in periods in which incremental expenses are incurred as a result of upcoming new store openings. 27 The occurrence of severe weather events, catastrophic public health events, natural or man-made disasters, social and political conditions or civil unrest could significantly damage or destroy our retail locations, could prohibit consumers from traveling to our retail locations or could prevent us from resupplying or staffing our stores or distribution centers or fulfilling our e-commerce orders, especially during peak shopping seasons.
The occurrence of severe weather events, catastrophic public health events, natural or man-made disasters, social and political conditions or civil unrest could significantly damage or destroy our retail locations, could prohibit consumers from traveling to our retail locations or could prevent us from resupplying or staffing our stores or distribution centers or fulfilling our e-commerce orders, especially during peak shopping seasons.
If an insurance carrier seeks to deny coverage of a particular loss, we may incur costs to dispute the denial of coverage, which could result in paying costs that otherwise would be recovered from insurance and delays in or ultimate denial of coverage. 19 The data privacy and cybersecurity regulatory environment is constantly changing, with new and increasingly rigorous or complex requirements.
If an insurance carrier seeks to deny coverage of a particular loss, we may incur costs to dispute the denial of coverage, which could result in paying costs that otherwise would be recovered from insurance and delays in or ultimate denial of coverage.
Any failure to comply could harm our brand, reputation, business and results of operations. Our success depends on the effectiveness of our marketing and advertising programs. Brand marketing and advertising significantly affect sales at our locations, as well as e-commerce sales.
Thus, our failure to achieve our expansion plans could materially and adversely affect our business, financial condition and results of operations. Our success depends on the effectiveness of our marketing and advertising programs. Brand marketing and advertising significantly affect sales at our locations, as well as e-commerce sales.
Our business depends on our ability to effectively manage our inventory. We have historically experienced loss of inventory (also called shrink) due to damage, theft (including from organized retail crime), and other causes.
If we are unable to protect against inventory shrink, our results of operations and financial condition could be adversely affected. Our business depends on our ability to effectively manage our inventory. We have historically experienced loss of inventory (also called shrink) due to damage, theft (including from organized retail crime), and other causes.
We compete directly or indirectly with the following categories of companies: • mass general merchants; • department stores; • large format sporting goods stores; • traditional sporting goods stores; • specialty outdoor retailers; • specialty footwear retailers; • catalogue and internet retailers; • suppliers that sell directly to customers.
We compete directly or indirectly with the following categories of companies: • mass general merchants; • department stores; • large format sporting goods stores; • traditional sporting goods stores; • specialty outdoor retailers; • specialty footwear retailers; • catalogue and internet retailers; • suppliers that sell directly to customers. 21 Pressure from our competitors could require us to reduce our prices or increase our spending for advertising and promotion.
Additionally, recent proposed legislative and regulatory changes related to climate change and reporting at both the federal and state levels could increase the complexity of, and compliance costs associated with, such regulations, which could have a material adverse effect on our business, results of operations and financial condition. 32 We are, and may in the future, be subject to claims, demands and lawsuits, and our insurance or indemnities may not be sufficient to cover damages related to those claims and lawsuits.
Additionally, recent proposed legislative and regulatory changes related to climate change and reporting at both the federal and state levels could increase the complexity of, and compliance costs associated with, such regulations, which could have a material adverse effect on our business, results of operations and financial condition.
Moreover, many of our suppliers provide us with merchandise purchasing incentives, such as return privileges, volume purchasing allowances and cooperative advertising, and a decline or discontinuation of these incentives could severely impact our results of operations. 22 Harm to our reputation could adversely impact our ability to attract and retain customers, team members, vendors and/or other partners.
Moreover, many of our suppliers provide us with merchandise purchasing incentives, such as return privileges, volume purchasing allowances and cooperative advertising, and a decline or discontinuation of these incentives could severely impact our results of operations.
In addition, the integration of any acquired business and their financial results may adversely affect our results of operations. 30 Legal and Regulatory Risks We are subject to costs and risks associated with laws and regulations affecting our business, including those relating to the sale, manufacture and import of consumer products and other matters, and the substance or enforcement of such laws may change or become more stringent.
Legal and Regulatory Risks W e are subject to costs and risks associated with laws and regulations affecting our business, including those relating to the sale, manufacture and import of consumer products and other matters, and the substance or enforcement of such laws may change or become mor e stringent.
If we fail to locate desirable sites, obtain lease rights to these sites on terms acceptable to us, hire adequate personnel and open and effectively operate these new stores, our financial performance could be adversely affected.
If we fail to locate desirable sites, obtain lease rights to these sites on terms acceptable to us, hire adequate personnel and open and effectively operate these new stores, our financial performance could be adversely affected. 22 We typically lease our stores under operating leases with initial terms of 15 to 20 years, and we generally cannot cancel these leases at our option.
Our failure to adequately address some or all of these risks could have a material adverse effect on our business, results of operations and financial condition.
Our failure to adequately address some or all of these risks could have a material adverse effect on our business, results of operations and financial condition. 27 A failure of our third-party vendors of outsourced business services and solutions to meet our performance standards and expectations could adversely affect our operations.
The price of fuel and demand for transportation services has fluctuated significantly over the last few years, and has resulted in increased costs for us and our vendors.
Consequently, our results can vary depending upon numerous factors affecting transportation, including the price of fuel and the availability of trucks and ships. The price of fuel and demand for transportation services has fluctuated significantly over the last few years, and has resulted in increased costs for us and our vendors.
If we were to become involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation, which may adversely affect the market price of our common stock.
If we were to become involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation, which may adversely affect the market price of our common stock. 37 We cannot provide any guaranty of future dividend payments or that we will repurchase our common stock pursuant to our share repurchase program, and our indebtedness could limit our ability to pay future dividends on our common stock.
To protect against rising inventory shrink, we have taken, and may continue to take, certain operational and strategic actions that could adversely affect our reputation, customer experience, and results of operations. In addition, sustained high rates of inventory shrink at certain stores could impact the profitability of those stores and result in the impairment of long-term assets.
To protect against rising inventory shrink, we have taken, and may continue to take, certain operational and strategic actions that could adversely affect our reputation, customer experience, and results of operations.
In response, we have sought alternative suppliers or vendors, raised prices, and made changes to our operations. The continuation of this situation could have further adverse effects on our sales and profitability, results of operations and financial condition.
These tariffs have had an adverse effect on our business, financial condition and results of operations. In response to the tariffs, we have sought alternative suppliers or vendors, raised prices, and made changes to our operations.
As a result, we experienced a period of decreased or delayed supply and high inflation which negatively impacted transportation and inventory costs. Over the past year, we have seen improvement to these constraints, resulting in decreased freight costs. In addition, changes in regulations may result in higher fuel costs through taxation, transportation restrictions or other means.
While we have seen some improvement to these constraints, resulting in decreased freight costs over the past couple of years, we may from time to time experience decreased or delayed supply. In addition, changes in regulations may result in higher fuel costs through taxation, transportation restrictions or other means.
Risks Related to the Ownership of Our Common Stock Our stock price may be highly volatile or may decline regardless of our operating performance, and you may not be able to resell shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result.
Thus, our level of indebtedness could adversely affect the profitability of our business, which could make it more difficult for us to generate cash flow sufficient to satisfy our obligations under our indebtedness. 36 Risks Related to the Ownership of Our Common Stock Our stock price may be highly volatile or may decline regardless of our operating performance, and you may not be able to resell shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result.
Our results of operations may be adversely affected if we, or our vendors, are unable to secure adequate transportation resources at competitive prices to fulfill our delivery schedules to our distribution centers or our stores. 29 Difficulties in moving products manufactured overseas and through the ports of North America, whether due to port congestion, government shutdowns, labor disputes, product regulations and/or inspections or other factors, including man-made or natural disasters and public health events, could negatively affect our business.
Difficulties in moving products manufactured overseas and through the ports of North America, whether due to port congestion, government shutdowns, labor disputes, product regulations and/or inspections or other factors, including man-made or natural disasters and public health events, could negatively affect our business.
We may require significant capital in the future to sustain or grow our business, including our store and e-commerce activities, due to increased competition, and there is no assurance that cash flow from operations will be sufficient to meet those needs or that additional sources of capital will be available on acceptable terms or at all. 18 Any failure to protect the integrity, confidentiality, and availability of our information systems (including our technology infrastructure and networks, third party services, and hosted and on-premises software) and data that we hold relating to us and our customers, team members, and partners (including vendors) could result in lost sales, fines, penalties, assessments, investigations, inquiries, and/or lawsuits, a loss of confidence in us, and harm to our reputation, business, results of operations, and financial condition.
Any failure to protect the integrity, confidentiality, and availability of our information systems (including our technology infrastructure and networks, third party services, and hosted and on-premises software) and data that we hold relating to us and our customers, team members, and partners (including vendors) could result in lost sales, fines, penalties, assessments, investigations, inquiries, and/or lawsuits, a loss of confidence in us, and harm to our reputation, business, results of operations, and financial condition.
Consumer data privacy and cybersecurity laws and related regulations have been enacted and additional laws and regulations are under consideration by various state and federal legislatures and regulatory authorities.
The data privacy and cybersecurity regulatory environment is constantly changing, with new and increasingly rigorous or complex requirements. Consumer data privacy, cybersecurity, artificial intelligence, and related laws and related regulations have been enacted and additional laws and regulations are under consideration by various state and federal legislatures and regulatory authorities.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo date, risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations or financial condition, and we do not believe that such risks are reasonably likely to have such an effect over the long term.
Biggest changeBased on the information available to us as of the date of this Annual Report, we believe that risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations or financial condition, and as of the date of this Annual Report, we are not aware of any material risks from cybersecurity threats that are reasonably likely to do so.
Our Disclosure Committee, a cross-functional group consisting of accounting, legal, finance, investor relations, internal audit, and IT management personnel, is responsible for disclosures concerning material cybersecurity incidents and the Company’s cybersecurity practices. 41 Risk Management and Strategy Our cybersecurity program is based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework and applies, as appropriate, to the Company’s internal and external information systems, applications, networks, and operations.
Our Disclosure Committee, a cross-functional group consisting of accounting, legal, finance, investor relations, internal audit, and IT management personnel, is responsible for disclosures concerning material cybersecurity incidents and the Company’s cybersecurity practices. 40 Risk Management and Strategy Our cybersecurity program is based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework and applies, as appropriate, to the Company’s internal and external information systems, applications, networks, and operations.
Additional information on cybersecurity risks we face is discussed in Item 1A of Part I, “Risk Factors”, which should be read in conjunction with the foregoing.
Additional information on cybersecurity risks we face is discussed in Item 1A of Part I, “Risk Factors”, which should be read in conjunction with the foregoing. 41
The Audit Committee receives reports and presentations from our Chief Information Officer (CIO) and our General Counsel at its quarterly meetings on a range of topics, including our cybersecurity program and processes, our information systems, risk identification and mitigation strategies, the evolving cybersecurity threat landscape, regulatory developments, board education, and notable incidents or threats affecting the Company.
The Audit Committee receives reports and presentations from our Chief Information Officer (CIO) and our Chief Legal Officer (CLO) at its quarterly meetings on a range of topics, including our cybersecurity program and processes, our information systems, risk identification and mitigation strategies, the evolving cybersecurity threat landscape, regulatory developments, board education, and notable incidents or threats affecting the Company.
From time to time between quarterly meetings, our CIO and General Counsel or other members of management may hold additional cybersecurity-related discussions with the Audit Committee. The Audit Committee regularly reports on its cybersecurity program oversight to the Board of Directors.
From time to time between quarterly meetings, our CIO and CLO or other members of management may hold additional cybersecurity-related discussions with the Audit Committee. The Audit Committee regularly reports on its cybersecurity program oversight to the Board of Directors.
Our CIO, Security Director, and cybersecurity team also work closely with our legal team on various aspects of our cybersecurity program. We also periodically engage assessors, consultants, Payment Card Industry-Data Security Standards (PCI-DSS) auditors, or other third parties to assist with our cybersecurity program. When appropriate, we engage forensic investigators and legal counsel to investigate cybersecurity threats and incidents.
We also periodically engage external assessors, consultants, Payment Card Industry-Data Security Standards (PCI-DSS) auditors, or other third parties to assist with our cybersecurity program. When appropriate, we engage forensic investigators and legal counsel to investigate cybersecurity threats and incidents.
The Cyber Security Committee reviews any significant cybersecurity threats or incidents reported by the Security Director. The Cyber Security Committee elevates cybersecurity threats and incidents to the Audit Committee, CEO and CFO, Disclosure Committee, and crisis management team, as appropriate.
The Cyber Security Committee elevates cybersecurity threats and incidents to the Audit Committee, CEO and CFO, Disclosure Committee, and crisis management team, as appropriate.
We maintain a software vulnerability management program supported by internal personnel and third-party service providers. We deploy technologies to automate and enhance our operational security capabilities. We also use third-party managed security services to augment our cybersecurity team’s capabilities. We have adopted a Cyber Security Incident Response Plan (the “CSIRP”) to provide a standardized framework for responding to cybersecurity incidents.
We maintain a software vulnerability management program supported by internal personnel and third-party service providers. We deploy technologies to automate and enhance our operational security capabilities. We also use third-party managed security services to augment our cybersecurity team’s capabilities.
Our Cyber Security Committee is a management committee chartered to oversee our cybersecurity program. The Cyber Security Committee meets at least quarterly and more frequently as appropriate to review and discuss the Company’s cybersecurity program. Our CIO and Security Director provide reports at each Cyber Security Committee meeting on cybersecurity program matters and initiatives.
The Cyber Security Committee meets at least quarterly and more frequently as appropriate to review and discuss the Company’s cybersecurity program. Our CIO and Security Director provide reports at each Cyber Security Committee meeting on cybersecurity program matters and initiatives. The Cyber Security Committee reviews any significant cybersecurity threats or incidents reported by the Security Director.
However, due to evolving cybersecurity threats, despite our security measures, we may not able to anticipate, prevent, and stop future cybersecurity incidents, including attacks to our information systems and data and those of our partners.
However, we cannot eliminate all risks from cybersecurity threats or provide assurances that the Company will not be materially affected by such risks in the future. Due to evolving cybersecurity threats, despite our security measures, we may not able to anticipate, prevent, and stop future cybersecurity incidents, including attacks to our information systems and data and those of our partners.
The CSIRP is a coordinated approach to investigate, contain, mitigate, and document cybersecurity incidents, including reporting and escalating findings as appropriate (including to the crisis management team).
We have adopted and maintain a Cyber Security Incident Response Plan (the “CSIRP”) to provide a standardized framework for responding to cybersecurity incidents. The CSIRP is a coordinated approach to investigate, contain, mitigate, and document cybersecurity incidents, including reporting and escalating findings as appropriate (including to the crisis management team).
Added
Our CIO, Security Director, and cybersecurity team also work closely with our legal team on various aspects of our cybersecurity program. Our Cyber Security Committee, which is chaired by the CIO, and includes the CLO, the Chief Administrative Officer, and the Security Director among other team members, is a management committee chartered to oversee our cybersecurity program.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed1 unchanged
Biggest change(2) 20 year lease entered in 2015. (3) 15 year lease entered in 2012. (4) 20 year lease entered in 2007. Five year extension to original term entered in 2020. (5) 20 year lease entered in 2012. Five year lease extension to original term entered in 2020. (6) 20 year lease entered in 2016.
Biggest changeLease expires in 2032. (2) Original lease commenced in 2015. Lease expires in 2035. (3) Original lease commenced in 2012. Lease expires in 2027. (4) Original lease commenced in 2007. Lease expires in 2032. (5) Original lease commenced in 2011. Lease expires in 2038. (6) Original lease commenced in 2014. Lease expires in 2039. (7) Original lease commenced in 2020.
The following table sets forth the location, use and size of our corporate and distribution center facilities: Location Use Approximate Square Footage Katy, Texas Corporate Office Building 1 400,000 (1) Katy, Texas Corporate Office Building 2 200,000 (2) Katy, Texas Bulk Warehouse 200,000 (3) Katy, Texas Distribution Center 1,400,000 (4) Twiggs County, Georgia Distribution Center 1,600,000 (5) Cookeville, Tennessee Distribution Center 1,600,000 (6) Kowloon, Hong Kong Global Sourcing Office 5,000 (7) (1) 20 year lease entered in 2007.
The following table sets forth the location, use and size of our corporate and distribution center facilities: Location Use Approximate Square Footage Katy, Texas Corporate Office Building 1 400,000 (1) Katy, Texas Corporate Office Building 2 200,000 (2) Katy, Texas Bulk Warehouse 200,000 (3) Katy, Texas Distribution Center 1,400,000 (4) Twiggs County, Georgia Distribution Center 1,600,000 (5) Cookeville, Tennessee Distribution Center 1,600,000 (6) Kowloon, Hong Kong Global Sourcing Office 5,000 (7) (1) Original lease commenced in 2007.
Three year lease extension to original term entered in 2020. (7) Three year lease entered in 2022. We lease all but one of our stores. Our initial store lease terms are typically 15 to 20 years with various renewal options and lease escalation structures. We believe that all of our leases are entered into at then-prevailing market lease rates.
Lease expires in 2027. With the exception of two retail stores which we own, we lease all of our retail stores, distribution centers and corporate offices. Our initial store lease terms are typically 15 to 20 years with various renewal options and lease escalation structures. We believe that all of our leases are entered into at then-prevailing market lease rates.
As of February 3, 2024, our combined leased and owned store square footage was approximately 19.7 million square feet. 42
As of February 1, 2025, our combined leased and owned store square footage was approxim ately 20.6 million squ are feet.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+3 added−3 removed2 unchanged
Biggest changeThe Share Repurchase Programs do not obligate the Company to acquire any particular number of common shares, and the programs may be suspended, extended, modified or discontinued at any time. Holders As of March 14, 2024, there were 12 holders of record of ASO, Inc.'s common stock.
Biggest changeAs of February 1, 2025, approximately $635.5 million remained available for share repurchases pursuant to the 2024 Share Repurchase Program (see Note 2 to the accompanying financial statements). The 2024 Share Repurchase Program does not obligate the Company to acquire any particular number of common shares, and the programs may be suspended, extended, modified or discontinued at any time.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Academy's common stock began trading on the Nasdaq Stock Market LLC, or Nasdaq, under the symbol "ASO" on October 2, 2020. Prior to that date, there was no public market for our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Academy's common stock began trading on the Nasdaq Stock Market LLC, or Nasdaq, under the symbol “ASO” on October 2, 2020. Prior to that date, there was no public market for our common stock.
The number of holders of record is based upon the actual number of holders registered at such date and does not include holders of shares in "street name" or persons, partnerships, associates, corporations or other entities identified in security position listing maintained by depositories.
The number of holders of record is based upon the actual number of holders registered at such date and does not include holders of shares in “street name” or persons, partnerships, associates, corporations or other entities identified in security position listing maintained by depositories.
The graph below presents the Company’s cumulative total stockholder returns relative to the performance of the Nasdaq US Benchmark Retail Index and the Russell 3000 Index commencing October 2, 2020 (the Company’s initial day of trading) through February 2, 2024.
The graph below presents the Company’s cumulative total stockholder returns relative to the performance of the Nasdaq US Benchmark Retail Index and the Russell 3000 Index commencing October 2, 2020 (the Company’s initial day of trading) through January 31, 2025.
On November 29, 2023, the Board of Directors of the Company authorized a share repurchase program (the "2023 Share Repurchase Program") under which the Company may purchase up to $600 million of its outstanding shares during the three-year period ending November 29, 2026.
(b) Excludes the impact of unpaid excise taxes. (c) On November 29, 2023, the Board of Directors of the Company authorized a share repurchase program (the “2023 Share Repurchase Program”) under which the Company is authorized to purchase up to $600 million of its outstanding shares during the three-year period ending November 29, 2026.
The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. 44 Issuer Purchases of Equity Securities The following table summarizes the repurchases and cancellations of our common stock during the fourth quarter of 2023: Period Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Share Purchased as Part of Publicly Announced Plans or Programs (b) Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (b) October 29, 2023 to November 25, 2023 — $ — — $ 99,411,688 November 26, 2023 to December 30, 2023 — — — 699,411,688 December 31, 2023 to February 3, 2024 43,526 $ 62.57 43,526 696,688,936 Total 43,526 $ 62.57 43,526 $ 696,688,936 (a) The total number of shares purchased excludes shares which were net-settled, and therefore not issued, to cover employee withholding related to the vesting of certain restricted stock awards and exercise of certain stock option awards.
The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock. 43 Issuer Purchases of Equity Securities The following table summarizes the repurchases and cancellations of our common stock during the fourth quarter of 2024: Period Total Number of Shares Purchased (a) Average Price Paid per Share (b) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (c) Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (c) November 3, 2024 to November 30, 2024 547,126 $ 48.62 547,126 $ 396,425,342 December 1, 2024 to January 4, 2025 422,561 56.46 422,561 676,151,069 January 5, 2025 to February 1, 2025 736,800 $ 55.22 736,800 635,475,139 Total 1,706,487 $ 53.41 1,706,487 $ 635,475,139 (a) The total number of shares purchased excludes shares which were net-settled, and therefore not issued, to cover employee withholding taxes related to the vesting of certain restricted stock awards and exercise of certain stock option awards.
(b) On June 2, 2022, the Board of Directors of the Company authorized a share repurchase program (the "2022 Share Repurchase Program") under which the Company may purchase up to $600 million of its outstanding shares during the three-year period ending June 2, 2025.
On December 4, 2024, the Board of Directors authorized a share repurchase program under which the Company is authorized to purchase up to $700 million of its outstanding shares during the three-year period ending December 4, 2027 (the “2024 Share Repurchase Program”), and which replaces the 2023 Share Repurchase Program.
Removed
The 2022 Share Repurchase Program and the 2023 Share Repurchase Program are collectively referred to as the "Share Repurchase Programs". As of February 3, 2024, approximately $696.7 million remained available for share repurchases pursuant to the Share Repurchase Programs (see Note 2 to the accompanying financial statements).
Added
Holders As of March 13, 2025, there were 11 holders of record of ASO, Inc.'s common stock.
Removed
Dividends On March 7, 2024, the Company issued a press release announcing that the Board of Directors declared a quarterly cash dividend with respect to the quarter ended February 3, 2024 of $0.11 per share of common stock, payable on April 18, 2024, to stockholders of record as of the close of business on March 26, 2024.
Added
Dividends We declared and paid our first quarterly cash dividend for the fourth quarter for fiscal 2021 and have paid a quarterly cash dividend consistently thereafter. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for information regarding quarterly dividend payments for 2024. However, we are not required to declare dividends.
Removed
The declaration, timing, amount and payment of any future cash dividends will be subject to the discretion and approval of the Board of Directors, taking into account such considerations as the Board of Directors may deem relevant at the time, including, among others, the Company’s results, financial condition and capital allocation plans.
Added
Any determination to pay future dividends to holders of our common stock will be subject to the discretion and approval of the Board of Directors and will depend upon many factors, including, the Company’s results of operations, liquidity, earnings, business strategy, legal requirements, covenant compliance, restrictions in our existing and any future debt agreements and other factors that our Board of Directors deems relevant.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

81 edited+30 added−30 removed61 unchanged
Biggest changeThis decrease is attributable to: • $108.8 million decrease in net income; • $23.1 million net decrease in non-cash charges; • $115.7 million net increase in cash flows provided by operating assets and liabilities. 58 The increase in cash flows from operating assets and liabilities was primarily attributable to: • $201.1 million increase in cash flows from merchandise inventories, net related to a reduction in inventory replenishment to align with 2023 sales patterns when compared to the prior year; partially offset by a • $86.9 million decrease in cash flows from accounts payable, primarily driven by a reduction in inventory replenishment and lower import and domestic freight costs relative to the prior year fourth quarter.
Biggest changeThe increase in cash flows from operating assets and liabilities was primarily attributable to: • $208.1 million increase in cash flows from accounts payable, due to timing of payments for increased merchandise inventories relative to the prior year period; • $40.1 million increase in cash flows from prepaid expenses and other current assets primarily due to an increase of $25 million related to a legal settlement in the fourth quarter of 2024 as well as timing of payments relative to the prior year period; and • $38.7 million increase in cash flows from accrued expenses and other current liabilities, partially offset by • $204.0 million decrease in cash flows from merchandise inventories, net due to lower sales in the current year period; and • $22.9 million decrease in cash flows from income taxes payables, due to timing of payments relative to the prior year period Investing Activities .
Management uses Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures.
Management uses Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures.
Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions. The Company believes the following are its critical accounting estimates: Merchandise Inventories, net Description: Merchandise inventories are stated at the lower of weighted average cost and net realizable value.
Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions. The Company believes the following are its critical accounting estimates: Merchandise Inventories Description: Merchandise inventories are stated at the lower of weighted average cost and net realizable value.
Merchandise inventories include the direct cost of merchandise and capitalized costs related to procurement, warehousing and distribution and are reflected net of shrinkage, vendor allowances and other valuation reserves. Judgments and Uncertainties: We record an inventory reserve for the estimated shrinkage between physical inventories on a by location basis.
Merchandise inventories include the direct cost of merchandise and capitalized costs related to procurement, warehousing and distribution and are reflected net of shrinkage, vendor allowances and other valuation reserves. Judgments and Uncertainties: We record an inventory reserve for the estimated shrinkage between physical inventories on a location by location basis.
Management has also historically used Adjusted EBIT as a performance target to establish and award discretionary annual incentive compensation. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.
Management has also historically used Adjusted EBIT as a performance target to establish and award discretionary annual incentive compensation. 50 Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.
Various factors affect comparable sales, including consumer preferences, buying trends and overall economic trends; our ability to identify and respond effectively to customer preferences and local and regional trends; our ability to provide an assortment of high quality/value oriented product offerings that generate new and repeat visits to our stores and our website; the customer experience and unique services we provide in our stores; our ability to execute our omnichannel strategy, including the growth of our e-commerce business; changes in product mix and pricing, including promotional activities; the number of items purchased per visit and average order value; a shift in the timing of a holiday between comparable periods; and the number of stores that have been in operation for more than 13 months.
Various other factors affect comparable sales, including consumer preferences, buying trends and overall economic trends; our ability to identify and respond effectively to customer preferences and local and regional trends; our ability to provide an assortment of high quality/value oriented product offerings that generate new and repeat visits to our stores and our website; the customer experience and unique services we provide in our stores; our ability to execute our omnichannel strategy, including the growth of our e-commerce business; changes in product mix and pricing, including promotional activities; the number of items purchased per visit and average order value; a shift in the timing of a holiday between comparable periods; and the number of stores that have been in operation for more than thirteen months.
These platforms allow us to connect further with our customers for marketing and product education and assists us in introducing customers to the Academy brand by reaching customers outside of our current store footprint. During 2023, stores facilitated approximately 95% of our total sales, including ship-from-store, BOPIS and in-store retail sales.
These platforms allow us to connect further with our customers for marketing and product education and assists us in introducing customers to the Academy brand by reaching customers outside of our current store footprint. During 2024, stores facilitated approximately 95% of our total sales, including ship-from-store, BOPIS and in-store retail sales.
Our gross margin is also impacted by variables including commodity costs, freight costs, shrinkage (discussed below) and inventory processing costs and e-commerce shipping costs. We track and measure gross margin as a percentage of net sales in order to evaluate our performance against profitability targets.
Our gross margin is also impacted by variables including duties, tariffs, commodity costs, freight costs, shrinkage (discussed below), inventory processing costs, and e-commerce shipping costs. We track and measure gross margin as a percentage of net sales in order to evaluate our performance against profitability targets.
Any sales made through our website or mobile app are allocated to e-commerce sales for the purpose of measuring comparable sales, regardless of how those sales are fulfilled, whether shipped to home or picked up in-store or curbside through our buy-online-pickup-in-store program ("BOPIS").
Any sales made through our website or mobile app are allocated to e-commerce sales for the purpose of measuring comparable sales, regardless of how those sales are fulfilled, whether shipped to home or picked up in-store or curbside through our buy-online-pickup-in-store program (“BOPIS”).
We define average ticket as total comparable sales divided by the number of transactions during a given period, which tells us the average amount the customer is spending on a purchase. 47 Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow.
We define average ticket as total sales divided by the number of transactions during a given period, which tells us the average amount the customer is spending on a purchase. 46 Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings Per Share and Adjusted Free Cash Flow.
Any reference in this Annual Report to "year" or any year in particular refers to our fiscal year, which represents the fifty-two or fifty-three week period ending on the Saturday closest to January 31. Unless otherwise specified, all comparisons or changes regarding 2023 are made to 2022.
Any reference in this Annual Report to “year” or any year in particular refers to our fiscal year, which represents the fifty-two or fifty-three week period ending on the Saturday closest to January 31. Unless otherwise specified, all comparisons or changes regarding 2024 are made to 2023.
Additionally, we are deepening our customer relationships, further integrating our e-commerce platform with our stores and driving operating efficiencies by developing our omnichannel capabilities, such as our mobile app, optimizing the website experience and upgrading our fulfillment capabilities. 46 The following table summarizes store activity for the periods indicated: Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Beginning stores 268 259 259 Q1 new stores 1 1 — Q2 new stores 1 1 — Q3 new stores 5 4 — Q4 new stores 7 3 — Closed — — — Ending stores 282 268 259 Relocated stores — — 1 How We Assess the Performance of Our Business and Recent Trends Our management considers a number of financial and operating metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, determine the allocation of resources, make decisions regarding corporate strategies and evaluate projections.
Additionally, we are deepening our customer relationships, further integrating our e-commerce platform with our stores and driving operating efficiencies by developing our omnichannel capabilities, such as our mobile app, optimizing the website experience and upgrading our fulfillment capabilities. 45 The following table summarizes store activity for the periods indicated: Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 Beginning stores 282 268 259 Q1 new stores 2 1 1 Q2 new stores 1 1 1 Q3 new stores 8 5 4 Q4 new stores 5 7 3 Closed — — — Ending stores 298 282 268 Relocated stores — — — How We Assess the Performance of Our Business and Recent Trends Our management considers a number of financial and operating metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, determine the allocation of resources, make decisions regarding corporate strategies and evaluate projections.
Additionally, for slow moving or obsolete inventory, we book reserves based on historical margins received for marked down inventory with similarly slow historical sell-through rates. A twenty percent decrease in assumed margins would not have a material impact to our financial statements.
Additionally, for slow moving or obsolete inventory, we book reserves based on historical margins received for marked down inventory with similarly slow historical sell-through rates. A 20% decrease in assumed margins would not have a material impact to our financial statements.
The earnings multiples used in the market approach can vary dependent on which companies are selected in our comparable set. A history of declining trends in our operating results such as comparable sales, gross margin, net income and cash flow from operations could impact these assumptions and serve as indicators of future impairment.
The earnings multiples and control premiums used in the market approach can vary dependent on which companies and guideline transactions are selected in our comparable set. A history of declining trends in our operating results such as comparable sales, gross margin, net income and cash flow from operations could impact these assumptions and serve as indicators of future impairment.
On November 29, 2023, the Board of Directors authorized a new share repurchase program (the "2023 Share Repurchase Program") under which the Company may purchase up to $600 million of its outstanding shares during the three-year period ending November 29, 2026.
Share Repurchases On November 29, 2023, the Board of Directors authorized a new share repurchase program (the “2023 Share Repurchase Program”) under which the Company may purchase up to $600 million of its outstanding shares during the three-year period ending November 29, 2026.
Management also uses Adjusted EBIT as a performance target to establish and award discretionary annual incentive compensation. See "Non-GAAP Measures" below. Components of Our Results of Operations. Our profitability is primarily influenced by fluctuations in net sales, gross margin and our ability to leverage selling, general and administrative expenses. Net Sales .
Management also uses Adjusted EBIT as a performance target to establish and award discretionary annual incentive compensation. See “Non-GAAP Measures” below. Components of Our Results of Operations. Our profitability is primarily influenced by fluctuations in net sales, gross margin and our ability to leverage selling, general and administrative expenses. Net Sales .
Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Earnings per Share should not be construed to imply that our future results will be unaffected by unusual or non-recurring items.
Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Earnings per Share should not be construed to imply th at our future results will be unaffected by unusual or non-recurring items.
Our stores are supported by approximately 22,000 team members, three distribution centers, and our e-commerce platform, which includes our website at www.academy.com and our mobile app.
Our stores are supported by approxi mately 22,000 team members, three distribution centers, and our e-commerce platform, which includes our website at www.academy.com and our mobile app.
Known material factors that could affect our financial performance and actual results, and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this discussion or otherwise made by our management, are described in the "Risk Factors" section of this Annual Report.
Known material factors that could affect our financial performance and actual results, and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this discussion or otherwise made by our management, are described in the “Part I. Item 1A. Risk Factors” section of this Annual Report.
However, this prepayment in principal on our Term Loan was largely offset by increases made by the Federal Reserve to the federal funds benchmark rate during 2022 and 2023, resulting in a small decrease in interest expense in 2023 compared to 2022.
However, this prepayment in principal on our Term Loan was largely offset by increases made by the Federal Reserve to the federal funds benchmark rate during 2022 and 2023, resulting in a decrease in interest expense in 2024 compared to 2023. Income Tax Expense.
Additionally, we recently implemented several innovative website features to enhance the customer online shopping experience, including a redesigned home page, additional BOPIS features, and enhanced shipping notifications. Our improved e-commerce platform supports our stores with digital marketing and our BOPIS and ship-to-store programs.
Additionally , we continue to implemen t several innovative website features to enhance the customer online shopping experience, including a redesigned home page, additional BOPIS features, and enhanced shipping notifications. Our improved e-commerce platform supports our stores with digital marketing and our BOPIS and ship-to-store programs.
Cash flows from operating activities are seasonal in our business. Typically, cash flows from operations are used to build inventory in advance of peak selling seasons, with the fourth quarter pre-holiday inventory increase being the most significant. Cash provided by operating activities in 2023 decreased $16.2 million compared to 2022.
Cash flows from operating activities are seasonal in our business. Typically, cash flows from operations are used to build inventory in advance of peak selling seasons, with the fourth quarter pre-holiday inventory increase being the most significant. Cash provided by operating activities in 2024 decreased $7.7 million compared to 2023.
The income approach uses a discounted cash flow analysis of our projected long-term future company income, and the market value approach is based on earnings multiples for a comparable set of public companies.
The income approach uses a discounted cash flow analysis of our projected long-term future company income, and the market value approach is based on earnings multiples for a comparable set of public companies as well as guideline transactions.
Net income for the year ended January 28, 2023, included a $7.2 million gain from a business interruption insurance recovery and a $3.7 million gain from the sale of a tariff relief litigation claim, both of which occurred in the fourth quarter of 2022.
Net income for the year ended January 28, 2023, included a $7.2 million gain from a business interruption insurance recovery and a $3.7 million gain from the sale of a tariff relief litigation claim, both of which occurred in the fourth quarter of 2022. See Note 2 of the accompanying financial statements.
Net income for the year ended January 28, 2023, included a $7.2 million gain from a business interruption insurance recovery and a $3.7 million gain from the sale of a tariff relief litigation claim, both of which occurred in the fourth quarter of 2022.
Net income for the year ended January 28, 2023, included a $7.2 million gain from a business interruption insurance recovery and a $3.7 million gain from the sale of a tariff relief litigation claim, both of which occurred in the fourth quarter of 2022. See Note 2 of the accompanying financial statements.
Recent fluctuations in income tax expense have been primarily as a result of changes in income before income taxes. Results of Operations A discussion regarding Results of Operations and Analysis of Financial Condition for the fiscal year ended January 28, 2023, as compared to the fiscal year ended January 29, 2022, is included in “Part II – Item 7.
Recent fluctuations in income tax expense have been primarily a result of changes in income before income taxes. 48 Results of Operations A discussion regarding Results of Operations and Analysis of Financial Condition for the fiscal year ended February 3, 2024, as compared to the fiscal year ended January 28, 2023, is included in “Part II – Item 7.
Our cost of goods sold includes the direct cost of merchandise and costs related to procurement, warehousing and distribution, which consist primarily of payroll and benefits, distribution center occupancy costs and freight and are generally variable in nature relative to our sales volume.
Gross margin is our net sales less cost of goods sold. Our cost of goods sold includes the direct cost of merchandise and costs related to procurement, warehousing and distribution, which consist primarily of payroll and benefits, distribution center occupancy costs and freight and are generally variable in nature relative to our sales volume.
All references in this discussion and analysis to "2023", "2022" and "2021" or like terms relate to our fiscal years as follows: Fiscal Year Ended Weeks 2023 February 3, 2024 53 2022 January 28, 2023 52 2021 January 29, 2022 52 Overview We are a leading full-line sporting goods and outdoor recreation retailer in the United States.
All references in this discussion and analysis to “2024”, “2023” and “2022” or like terms relate to our fiscal years as follows: Fiscal Year Ended Weeks 2024 February 1, 2025 52 2023 February 3, 2024 53 2022 January 28, 2023 52 Overview We are a leading full-line sporting goods and outdoor recreation retailer in the United States.
This discussion contains forward-looking statements that involve risks and uncertainties. See the section of this Annual Report entitled "Cautionary Statement Regarding Forward-Looking Statements." When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that characterize our business.
See the section of this Annual Report entitled “Cautionary Statement Regarding Forward-Looking Statements.” When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that characterize our business.
Our product assortment focuses on key categories of outdoors, apparel, sports & recreation and footwear (representing 28%, 28%, 24% and 20% of our 2023 net sales, respectively) through both leading national brands and a portfolio of private label brands, which go well beyond traditional sporting goods and apparel offerings. Our business is subject to seasonal fluctuations.
Our product assortment focuses on key categories of outdoors, apparel, sports & recreation and footwear (representing 30%, 27%, 23% and 20% of our 2024 net sales, respectively) through both leading national brands and a portfolio of private label brands, which go well beyond traditional sporting goods and apparel offerings. Our business is subject to seasonal fluctuations.
Selling, general and administrative ("SG&A") expenses include store and corporate administrative payroll and payroll benefits, store and corporate headquarters occupancy costs, advertising, credit card processing, information technology, pre-opening costs and other store and administrative expenses. These expenses are both variable and fixed in nature. SG&A expenses as a percentage of sales increased from 21.4% in 2022 to 23.3% in 2023.
Selling, general and administrative (“SG&A”) expenses include store and corporate administrative payroll and payroll benefits, store and corporate headquarters occupancy costs, advertising, credit card processing, information technology, pre-opening costs and other store and administrative expenses. These expenses are both variable and fixed in nature. SG&A expenses as a percentage of sales increased from 23.3% in 2023 to 24.8% in 2024.
(2) These balances include stores where we have an executed contract but have not taken possession of the location as of February 3, 2024.
(2) These balances include stores where we have an executed contract but have not taken possession of the location as of February 1, 2025.
Judgments and Uncertainties: The annual Trade Name impairment test provides for the option of first performing a qualitative assessment to evaluate the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of an intangible asset is less than its carrying amount.
The Trade Name is tested for impairment annually or whenever events or circumstances indicate that the carrying amount of the Trade Name may not be recoverable. 59 Judgments and Uncertainties: The annual Trade Name impairment test provides for the option of first performing a qualitative assessment to evaluate the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of an intangible asset is less than its carrying amount.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report for the fiscal year ended February 3, 2024 (this "Annual Report").
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations for the year ended February 1, 2025 (“2024”) and the year ended February 3, 2024 (“2023”) should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report for the fiscal year ended February 1, 2025 (this “Annual Report”).
The following table summarizes our current debt obligations by fiscal year (amounts in thousands): 2024 2025 2026 2027 Total Term Loan and related interest (1) $ 10,835 $ 9,595 $ 9,159 $ 87,725 $ 117,314 Notes and related interest (2) 24,000 24,000 24,000 424,000 496,000 ABL Facility and related interest (3) 2,500 1,909 — — 4,409 (1) Interest payments do not include amortization of discount and debt issuance costs and are approximated based on projected interest rates and assume no unscheduled principal payments.
The following table summarizes our current debt obligations by fiscal year (amounts in thousands): 2025 2026 2027 2028 2029 Total Term Loan and related interest (1) $ 9,595 $ 9,159 $ 87,725 $ — $ — $ 106,479 Notes and related interest (2) 24,000 24,000 424,000 — — 472,000 ABL Facility and related interest (3) 2,500 2,500 2,500 2,500 268 10,268 (1) Interest payments do not include amortization of discount and debt issuance costs and are approximated based on projected interest rates and assume no unscheduled principal payments.
Adjusted Free Cash Flow The following table provides a reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow for the periods presented (amounts in thousands): Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Net cash provided by operating activities $ 535,779 $ 552,005 $ 673,265 Net cash used in investing activities (206,139) (108,806) (76,017) Adjusted Free Cash Flow $ 329,640 $ 443,199 $ 597,248 55 Liquidity and Capital Resources Sources and Uses of Liquidity Our principal liquidity requirements are for working capital, capital expenditures and cash used to pay our debt obligations and related interest expense.
Adjusted Free Cash Flow The following table provides a reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow for the periods presented (amounts in thousands): Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 Net cash provided by operating activities $ 528,082 $ 535,779 $ 552,005 Net cash used in investing activities (186,120) (206,139) (108,806) Adjusted Free Cash Flow $ 341,962 $ 329,640 $ 443,199 53 Liquidity and Capital Resources Sources and Uses of Liquidity Our principal liquidity requirements are for working capital, capital expenditures and cash used to pay our debt obligations and related interest expense.
Long-Term Debt As of February 3, 2024, the Company's long-term debt and interest rates consists of: • Notes - 6.00% fixed rate senior secured notes with $400 million in principal outstanding and full principal maturing November 15, 2027; • Term Loan - 9.19% variable rate term-loan with $91.8 million in principal outstanding maturing November 6, 2027 and quarterly principal payments of $750 thousand; and • ABL Facility - $1.0 billion commitment on a variable rate secured asset-based revolving credit facility with no principal outstanding maturing November 6, 2025.
Long-Term Debt As of February 1, 2025, the Company's long-term debt consists of: • Notes - 6.00% fixed rate senior secured notes with $400 million in principal outstanding and full principal maturing November 15, 2027; • Term Loan - 8.38% variable rate term-loan with $88.8 million in principal outstanding maturing November 6, 2027 and requiring quarterly principal payments of $750 thousand through September 30, 2027; and • ABL Facility - $1.0 billion commitment on a variable rate secured asset-based revolving credit facility with no principal outstanding maturing March 8, 2029.
The 2022 Share Repurchase Program and the 2023 Share Repurchase Program are collectively referred to as the "Share Repurchase Programs". The Share Repurchase Programs do not obligate the Company to acquire any particular number of common shares, and the programs may be suspended, extended, modified or discontinued at any time.
The 2023 Share Repurchase Program does not obligate the Company to acquire any particular number of common shares, and the program may be suspended, extended, modified or discontinued at any time.
Capital Expenditures The following table summarizes our capital expenditures for the periods shown (amounts in thousands): Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 New stores and relocations $ 100,419 $ 42,735 $ 1,955 Corporate, e-commerce, information technology programs and other 81,992 50,019 44,967 Updates for existing stores and distribution centers 25,359 15,550 28,880 Total capital expenditures $ 207,770 $ 108,304 $ 75,802 We expect capital expenditures for fiscal year 2024 to be between $225 million and $275 million.
Capital Expenditures The following table summarizes our capital expenditures for the periods shown (amounts in thousands): Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 New stores and relocations $ 107,703 $ 100,419 $ 42,735 Corporate, e-commerce, and information technology programs 70,474 81,992 50,019 Updates for existing stores and distribution centers 21,412 25,359 15,550 Total capital expenditures $ 199,589 $ 207,770 $ 108,304 We expect capital expenditures for fiscal year 2025 to be between $220 million and $250 million.
Our presentation of Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow should not be construed to imply that our future results will be unaffected by any such adjustments. 52 Our Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow measures have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP.
Our Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow measures have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP.
These approaches use key input assumptions such as our projected future operating results, the discount rate, the weighting for each valuation approach and the comparable set of companies. 60 Impact of Assumptions: The assumptions used to project long-term company income consider variables such as historical and current trends, macroeconomic conditions, supply chain factors, projections consistent with the Company’s operating strategy, such as the future development of e-commerce and our assumptions used on future store openings, and other variables expected to impact future sales.
Impact of Assumptions: The assumptions used to project long-term company income consider variables such as historical and current trends, macroeconomic conditions, supply chain factors, projections consistent with the Company’s operating strategy, such as the future development of e-commerce and our assumptions used on future store openings, and other variables expected to impact future sales.
We also use cash to pay dividends and occasionally use cash to repurchase common stock. We may fund our liquidity requirements through cash and cash equivalents, cash generated from operating activities, issuances of debt (such as the Notes) and borrowings under our ABL Facility. On February 3, 2024, our cash and cash equivalents totaled $347.9 million.
We also use cash to pay dividends and use cash to repurchase our common stock. We may fund our liquidity requirements through cash and cash equivalents, cash generated from operating activities, and borrowings under our ABL Facility (as defined below). On February 1, 2025, our cash and cash equivalents totaled $288.9 million.
Transactions are influenced by customer traffic, the amount of customers that visited our stores or website, and sales conversion, the percent of those customers that made a purchase.
We define transactions as the number of customer transactions for stores and e-commerce during a given period on a comparable sales basis. Transactions are influenced by customer traffic, the amount of customers that visited our stores or website, and sales conversion, the percent of those customers that made a purchase.
We believe our cash and cash equivalents, as well as our availability under the ABL Facility, will be sufficient to fund our cash requirements for at least the next 12 months.
We believe our existing cash and cash equivalents, cash flows from operations, as well as availability under the ABL Facility, will be sufficient to fund our cash requirements for the foreseeable future.
We generally perform a full physical inventory count for each store at least once a year, throughout the year, after which our shrinkage accrual rate to sales for each store is updated based on historical results.
We perform a full physical inventory count for each store at least once a year, throughout the year, after which our shrinkage accrual rate to sales for each store is updated based on historical results. For vendor allowances based on contractual provisions, we develop accrual rates for receivables as determined by the agreements, which are typically linked to purchase volumes.
There is significant judgment used in determining these assumptions used in the assessment of goodwill impairment and variability in the assumptions could cause us to reach a different conclusion on impairment. In 2023, we performed a qualitative impairment assessment and determined a quantitative assessment was not necessary.
There is significant judgment used in determining these assumptions used in the assessment of goodwill impairment and variability in the assumptions could cause us to reach a different conclusion on impairment. In 2024, we performed a quantitative impairment assessment and determined that the fair value of the reporting unit exceeded its carrying amount by a significant margin.
Management compensates for these limitations by primarily relying on our GAAP results in addition to using Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow supplementally. 53 Adjusted EBITDA and Adjusted EBIT The following table provides reconciliations of net income to Adjusted EBITDA and to Adjusted EBIT for the periods presented (amounts in thousands): Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Net income (a) $ 519,190 $ 628,001 $ 671,381 Interest expense, net 46,051 46,441 48,989 Income tax expense 143,966 190,319 188,159 Depreciation and amortization 110,936 106,762 105,274 Equity compensation (b) 24,377 21,175 39,264 Loss on early retirement of debt 1,525 1,963 2,239 Payroll taxes associated with the 2021 Vesting Event (c) — — 15,418 Other (d) — — 3,118 Adjusted EBITDA $ 846,045 $ 994,661 $ 1,073,842 Less: Depreciation and amortization (110,936) (106,762) (105,274) Adjusted EBIT $ 735,109 $ 887,899 $ 968,568 (a) Net income for the year ended February 3, 2024, includes a $15.9 million net gain relative to a credit card fee litigation settlement which occurred in the fourth quarter of 2023.
Management compensates for these limitations by primarily relying on our GAAP results in addition to using Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow supplementally. 51 Adjusted EBITDA and Adjusted EBIT The following table provides reconciliations of net income to Adjusted EBITDA and to Adjusted EBIT for the periods presented (amounts in thousands): Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 Net income (a) $ 418,447 $ 519,190 $ 628,001 Interest expense, net 36,873 46,051 46,441 Income tax expense 119,778 143,966 190,319 Depreciation and amortization 118,070 110,936 106,762 Equity compensation (b) 26,629 24,377 21,175 Loss on early retirement of debt — 1,525 1,963 Write off of deferred loan costs 449 — — Adjusted EBITDA $ 720,246 $ 846,045 $ 994,661 Less: Depreciation and amortization (118,070) (110,936) (106,762) Adjusted EBIT $ 602,176 $ 735,109 $ 887,899 (a) Net income for the year ended February 1, 2025, includes a $15.0 million gain pertaining to a litigation settlement and a $7.1 million gain on a sale-leaseback transaction, both of which occurred in the fourth quarter of 2024.
There is significant judgment used in determining these assumptions on intangible asset impairment and variability in the assumptions could cause us to reach a different conclusion on impairment. In 2023, we performed a qualitative impairment assessment and determined a quantitative assessment was not necessary.
There is significant judgment used in determining these assumptions on intangible asset impairment and variability in the assumptions could cause us to reach a different conclusion on impairment. In 2024, we performed a quantitative impairment assessment and determined that the fair value of Trade Name exceeded its carrying amount by a significant margin.
Loss on early retirement of debt. We utilized cash on hand to voluntarily prepay $100 million of outstanding borrowings under the Term Loan in February of 2024. In December of 2022, we also voluntarily prepaid $100 million of outstanding borrowings under the Term Loan.
We utilized cash on hand to voluntarily prepay $100 million of outstanding borrowings under the Term Loan in February of 2024, which resulted in a loss on early retirement of debt of $1.5 million for 2023. Write off of Deferred Loan Costs.
As of February 3, 2024, we had $881.4 million of available capacity under our ABL Facility and $347.9 million of cash and cash equivalents.
As of February 1, 2025, we had $955.5 million of available capacity under our ABL Facility and $288.9 million of cash and cash equivalents.
A significant portion of our net sales and profits is driven by summer holidays, such as Memorial Day, Father’s Day and Independence Day, during the second quarter. Our net sales and profits are also impacted by the November/December holiday selling season, and in part by the sales of cold weather sporting goods and apparel during the fourth quarter.
A significant portion of our net sales and profits is driven by summer holidays, such as Memorial Day, Father’s Day and Independence Day, during the second quarter.
We expect to continue to invest in expanding and enhancing our omnichannel capabilities, including our mobile app, optimizing the web site experience and upgrading our fulfillment capabilities, which will continue to require further investments by us. 48 We expect that new stores will be a key driver of growth in our net sales and gross margin in the future as we execute our new store opening growth plans.
We expect to continue to invest in expanding and enhancing our omnichannel capabilities, including our mobile app, optimizing the web site experience and upgrading our fulfillment capabilities, which will continue to require further investments by us.
Intangible Assets Description: Intangible assets primarily consists of the trade name "Academy Sports + Outdoors" (the "Trade Name"). The Trade Name is expected to generate cash flows indefinitely and, therefore, is accounted for as an indefinite-lived asset not subject to amortization.
The Company has not recorded any impairment charges related to goodwill during fiscal 2024, fiscal 2023, or fiscal 2022. Intangible Assets Description: Intangible assets primarily consists of the trade name “Academy Sports + Outdoors” (the “Trade Name”). The Trade Name is expected to generate cash flows indefinitely and, therefore, is accounted for as an indefinite-lived asset not subject to amortization.
Actual long-term income results could vary significantly from our projections due to a variety of reasons such as changes in the local retail environment or macroeconomic factors not used in our assumptions. In addition to variables considered in developing projected long-term store income, assumptions are made to develop the assumed discount rate based on company specific factors.
Additionally, the long-term store income projections also contain a projection of future store specific costs such as store wages and advertising. Actual long-term income results could vary significantly from our projections due to a variety of reasons such as changes in the local retail environment or macroeconomic factors not used in our assumptions.
The following table summarizes our pre-opening expense activity for the periods presented: Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Number of new stores opened 14 9 — Pre-opening expenses (in millions) $ 8.3 $ 5.5 $ 0.2 Interest Expense.
The following table summarizes our pre-opening expense activity for the periods presented: Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 Number of new stores opened 16 14 9 Pre-opening expenses (in millions) $ 13.9 $ 8.3 $ 5.5 During the fourth quarter of 2024, we closed on a sale-leaseback agreement involving a store property in Cypress, Texas.
(b) Represents non-cash charges related to equity based compensation, which vary from period to period depending on certain factors such as the 2021 Vesting Event, timing and valuation of awards, achievement of performance targets and equity award forfeitures. (c) Represents cash expenses related to taxes on equity-based compensation resulting from the 2021 Vesting Event.
(b) Represents non-cash charges related to equity based compensation, which vary from period to period depending on certain factors including timing and valuation of awards, achievement of performance targets and equity award forfeitures. (c) Represents the tax effect of the total adjustments made to arrive at Adjusted Net Income at our historical tax rate.
We continue to invest in initiatives that will increase traffic to our stores and e-commerce platform, which includes our website and mobile app, and drive increased sales conversion. These initiatives include investments in our new customer data platform and the development of strategies, which focus on customer segmentation with the intention of improving customer identification and increasing customer engagement.
These initiatives include investments in our new customer data platform and the development of strategies, which focus on customer segmentation with the intention of improving customer identification and increasing customer engagement.
The decrease in effective tax rate was largely driven by the inclusion of certain research and development tax credits relative to 2022 and 2023 in the current year results, as well as increased permanent adjustments resulting from the vesting of a higher number of stock compensation awards during 2023. 51 Non-GAAP Measures Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow, as shown below, have been presented in this Annual Report as supplemental measures of financial performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America ("GAAP").
Non-GAAP Measures Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow, as shown below, have been presented in this Annual Report as supplemental measures of financial performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”).
Share Repurchases On June 2, 2022, the Board of Directors of the Company authorized a share repurchase program (the "2022 Share Repurchase Program") under which the Company may purchase up to $600 million of its outstanding shares during the three-year period ending June 2, 2025.
On December 4, 2024, the Company's Board of Directors authorized a new share repurchase program under which the Company is authorized to purchase up to $700 million of its outstanding shares during the three-year period ending December 4, 2027 (the “2024 Share Repurchase Program”), and which replaces the 2023 Share Repurchase Program.
If such assets are considered to be impaired, the impairment loss recognized is the amount by which the carrying amount of the assets exceeds its estimated fair value, which is calculated using discounted expected future cash flows.
If such assets are considered to be impaired, the impairment loss recognized is the amount by which the carrying amount of the assets exceeds its estimated fair value, which is calculated using discounted expected future cash flows. 58 Impact of Assumptions: The assumptions used to project store impairment loss is based on projected future store income and considers variables such as historical and current trends, macroeconomic conditions, store location and local economy and supply chain factors.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” to our Annual Report on Form 10-K for the fiscal year ended January 28, 2023. 2023 (53 weeks) Compared to 2022 (52 weeks) The following table sets forth amounts and information derived from our consolidated statements of income for the periods indicated as follows (dollar amounts in thousands): Fiscal Year Ended Change February 3, 2024 January 28, 2023 Dollars Percent Net sales $ 6,159,291 100.0 % $ 6,395,073 100.0 % $ (235,782) (3.7) % Cost of goods sold 4,049,080 65.7 % 4,182,571 65.4 % (133,491) (3.2) % Gross margin 2,110,211 34.3 % 2,212,502 34.6 % (102,291) (4.6) % Selling, general and administrative expenses 1,432,356 23.3 % 1,365,953 21.4 % 66,403 4.9 % Operating income 677,855 11.0 % 846,549 13.2 % (168,694) (19.9) % Interest expense, net 46,051 0.7 % 46,441 0.7 % (390) (0.8) % Loss on early retirement of debt 1,525 0.0 % 1,963 0.0 % (438) (22.3) % Other (income), net (32,877) (0.5) % (20,175) (0.3) % (12,702) 63.0 % Income before income taxes 663,156 10.8 % 818,320 12.8 % (155,164) (19.0) % Income tax expense 143,966 2.3 % 190,319 3.0 % (46,353) (24.4) % Net income $ 519,190 8.4 % $ 628,001 9.8 % $ (108,811) (17.3) % * Percentages in table may not sum properly due to rounding.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” to our Annual Report on Form 10-K for the fiscal year ended February 3, 2024. 2024 (52 weeks) Compared to 2023 (53 weeks) The following table sets forth amounts and information derived from our Consolidated Statements of Income for the periods indicated as follows (dollar amounts in thousands): Fiscal Year Ended (a) Change February 1, 2025 February 3, 2024 Dollars Percent Net sales $ 5,933,450 100.0 % $ 6,159,291 100.0 % $ (225,841) (3.7) % Cost of goods sold 3,921,990 66.1 % 4,049,080 65.7 % (127,090) (3.1) % Gross margin 2,011,460 33.9 % 2,110,211 34.3 % (98,751) (4.7) % Selling, general and administrative expenses 1,472,821 24.8 % 1,432,356 23.3 % 40,465 2.8 % Operating income 538,639 9.1 % 677,855 11.0 % (139,216) (20.5) % Interest expense, net 36,873 0.6 % 46,051 0.7 % (9,178) (19.9) % Loss on early retirement of debt — 0.0 % 1,525 0.0 % (1,525) (100.0) % Write off of deferred loan costs 449 0.0 % — 0.0 % 449 100.0 % Other (income), net (36,908) (0.6) % (32,877) (0.5) % (4,031) 12.3 % Income before income taxes 538,225 9.1 % 663,156 10.8 % (124,931) (18.8) % Income tax expense 119,778 2.0 % 143,966 2.3 % (24,188) (16.8) % Net income $ 418,447 7.1 % $ 519,190 8.4 % $ (100,743) (19.4) % (a) Fiscal year 2023 consisted of 53 weeks compared with 52 weeks in fiscal year 2024.
Additionally, merchandise net sales from the 53rd week, which is not included in comparable sales for 2023, increased net sales by $73.3 million in 2023. The decrease of 6.5% in comparable sales was driven by lower sales across all merchandise divisions as a result of fewer transactions of 7.0%, partially offset by an increase in average ticket of 0.5%.
Comparable sales decreased 5.1% driven by lower sales across all merchandise divisions as a result of a 6.3% decrease in comparable transactions, partially offset by an increase in average ticket of 1.2%.
As of February 3, 2024, we operated 282 stores that range in size from approximately 40,000 to 130,000 gross square feet, with an average size of approximately 70,000 gross square feet, throughout 18 contiguous states located primarily in the southern United States.
As of February 1, 2025, we operat ed 298 sto res that range in size from approximately 40,000 to 130,000 gross square feet, with an average size of approxima tely 70,000 gro ss square feet, through out 19 cont iguous states located primarily in the southern United States.
The following table summarizes our operating lease obligations by fiscal year: 2024 2025 2026 2027 2028 After 2028 Total Operating lease payments (1) (2) $ 206,111 $ 224,177 $ 215,877 $ 201,825 $ 183,797 $ 924,267 $ 1,956,054 (1) Minimum lease payments have not been reduced by sublease rentals of $2.3 million due in the future under non-cancelable subleases.
The following table summarizes our operating lease obligations by fiscal year: 2025 2026 2027 2028 2029 After 2029 Total Operating lease payments (1) (2) $ 223,463 $ 243,129 $ 229,324 $ 211,665 $ 194,315 $ 1,017,626 $ 2,119,522 (1) Minimum lease payments have not been reduced by sublease rentals of $2.0 million due in the future under non-cancelable subleases.
Interest expense decreased $0.4 million, or 0.8%, to $46.1 million in 2023 from $46.4 million in 2022 resulting primarily from higher capitalized interest due to increased construction of new stores and a lower outstanding balance on our long-term debt, driven by a voluntary prepayment of $100.0 million made in December 2022, partially offset by an increase in interest rates on our Term Loan.
Interest expense decreased $9.2 million, or 19.9%, to $36.9 million in 2024 from $46.1 million in 2023 resulting primarily from a lower outstanding balance on our long-term debt, driven by a voluntary prepayment of $100.0 million under the Term Loan made on February 1, 2024. Other (Income), net.
Dividends The following table summarizes our quarterly dividend payments for the fiscal year ended February 3, 2024 (amounts in thousands, except per share amounts): Dividends Paid per Share Total Dividends Paid Stockholder Date of Record First Quarter (January 29, 2023 to April 29, 2023) $ 0.09 $ 6,929 March 23, 2023 Second Quarter (April 30, 2023 to July 29, 2023) $ 0.09 6,896 June 15, 2023 Third Quarter (July 30, 2023 to October 28, 2023) $ 0.09 6,718 September 13, 2023 Fourth Quarter (October 29, 2023 to February 3, 2024) $ 0.09 6,675 December 13, 2023 Total Dividends Paid $ 27,218 57 On March 7, 2024, the Company issued a press release announcing that the Board of Directors declared a quarterly cash dividend with respect to the quarter ended February 3, 2024 of $0.11 per share of common stock, payable on April 18, 2024, to stockholders of record as of the close of business on March 26, 2024.
(2) See Part II, Item 5 - Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities for further detail on the 2024 fourth quarter share repurchases. 55 Dividends The following table summarizes our quarterly dividend payments for the fiscal year ended February 1, 2025 (amounts in thousands, except per share amounts): Dividends Paid per Share Total Dividends Paid Stockholder Date of Record First Quarter (February 4, 2024 to May 4, 2024) $ 0.11 $ 8,182 March 26, 2024 Second Quarter (May 5, 2024 to August 3, 2024) $ 0.11 7,921 June 20, 2024 Third Quarter (August 4, 2024 to November 2, 2024) $ 0.11 7,739 September 19, 2024 Fourth Quarter (November 3, 2024 to February 1, 2025) $ 0.11 7,621 December 18, 2024 Total Dividends Paid $ 31,463 On March 6, 2025, the Company announced that the Board of Directors declared a quarterly cash dividend with respect to the quarter ended February 1, 2025 of $0.13 per share of common stock, payable on April 17, 2025, to stockholders of record as of the close of business on March 25, 2025.
We regularly review inventories and record a valuation adjustment when necessary such as for inventory that has a carrying value in excess of the net realizable value or for slow moving or obsolete inventory. 59 Impact of Assumptions: For inventory shrinkage, our reserves may be inaccurate if our historical physical inventory shrinkage rates, used in our assumptions, differ significantly from actual rates due to consistent misses to our accrual.
Impact of Assumptions: For inventory shrinkage, our reserves may be inaccurate if our historical physical inventory shrinkage rates, used in our assumptions, differ significantly from actual rates due to consistent misses to our accrual.
(d) Other adjustments include (representing deductions or additions to Adjusted EBITDA and Adjusted EBIT) amounts that management believes are not representative of our operating performance, including installation costs for energy savings associated with our profitability initiatives. 54 Adjusted Net Income and Adjusted Earnings per Share The following table provides a reconciliation of net income to Adjusted Net Income and Adjusted Earnings per Share for the periods presented (amounts in thousands, except per share data): Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Net income (a) $ 519,190 $ 628,001 $ 671,381 Equity compensation (b) 24,377 21,175 39,264 Loss on early retirement of debt 1,525 1,963 2,239 Payroll taxes associated with the 2021 Vesting Event (c) — — 15,418 Other (d) — — 3,118 Tax effects of these adjustments (e) (5,621) (5,382) (14,884) Adjusted Net Income $ 539,471 $ 645,757 $ 716,536 Earnings per common share: Basic $ 6.89 $ 7.70 $ 7.38 Diluted $ 6.70 $ 7.49 $ 7.12 Adjusted Earnings per Share: Basic $ 7.16 $ 7.91 $ 7.88 Diluted $ 6.96 $ 7.70 $ 7.60 Weighted average common shares outstanding: Basic 75,389 81,590 90,956 Diluted 77,469 83,895 94,284 (a) Net income for the year ended February 3, 2024, includes a $15.9 million net gain relative to a credit card fee litigation settlement which occurred in the fourth quarter of 2023.
(b) Represents non-cash charges related to equity based compensation, which vary from period to period depending on certain factors, timing and valuation of awards, achievement of performance targets and equity award forfeitures. 52 Adjusted Net Income and Adjusted Earnings per Share The following table provides a reconciliation of net income to Adjusted Net Income and Adjusted Earnings per Share for the periods presented (amounts in thousands, except per share data): Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 Net income (a) $ 418,447 $ 519,190 $ 628,001 Equity compensation (b) 26,629 24,377 21,175 Loss on early retirement of debt — 1,525 1,963 Write off of deferred loan costs 449 — — Tax effects of these adjustments (c) (6,038) (5,621) (5,382) Adjusted Net Income $ 439,487 $ 539,471 $ 645,757 Earnings per common share: Basic $ 5.87 $ 6.89 $ 7.70 Diluted $ 5.73 $ 6.70 $ 7.49 Adjusted Earnings per Share: Basic $ 6.16 $ 7.16 $ 7.91 Diluted $ 6.02 $ 6.96 $ 7.70 Weighted average common shares outstanding: Basic 71,343 75,389 81,590 Diluted 73,048 77,469 83,895 (a) Net income for the year ended February 1, 2025, includes a $15.0 million gain pertaining to a litigation settlement and a $7.1 million gain on a sale-leaseback transaction, both of which occurred in the fourth quarter of 2024.
Over recent years, the United States retail industry, including Academy, has experienced a significant increase in inventory shrink, which has resulted in a negative impact to our gross margins. A prolonged period of significant increased shrink could have a material negative impact on our gross margin and results of operations. Selling, General and Administrative Expenses.
We refer to loss or theft of inventory as “shrinkage” or “shrink.” A prolonged period of significant increased shrink could have a material negative impact on our gross margin and results of operations. Selling, General and Administrative Expenses.
In May of 2021, we entered into an amendment to our Term Loan which reduced the applicable margin on our LIBOR rate by 1.25%, and paid down $99 million. In December of 2022, we utilized cash on hand to voluntarily prepay $100 million of outstanding borrowings on our Term Loan.
In 2022 and 2023, we utilized cash on hand to voluntarily prepay $100 million of outstanding borrowings on our Term Loan.
Cash Flows Our consolidated statements of cash flows are summarized as follows (in thousands): Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Net cash provided by operating activities $ 535,779 $ 552,005 $ 673,265 Net cash used in investing activities (206,139) (108,806) (76,017) Net cash used in financing activities (318,865) (592,052) (488,854) Net increase (decrease) in cash and cash equivalents $ 10,775 $ (148,853) $ 108,394 Operating Activities.
The following table summarizes our forecasted allocation of capital expenditures for fiscal year 2025: 2025 New stores 60 % Corporate, e-commerce, and information technology programs 20 % Updates for existing stores and distribution centers 20 % We review forecasted capital expenditures throughout the year and will adjust our capital expenditures based on business conditions at that time. 56 Cash Flows Our Consolidated Statements of Cash Flows are summarized as follows (in thousands): Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 Net cash provided by operating activities $ 528,082 $ 535,779 $ 552,005 Net cash used in investing activities (186,120) (206,139) (108,806) Net cash used in financing activities (400,953) (318,865) (592,052) Net increase (decrease) in cash and cash equivalents $ (58,991) $ 10,775 $ (148,853) Operating Activities.
Liquidity information related to the ABL Facility is as follows for the periods shown (dollar amounts in thousands): Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Average funds drawn $ — $ — $ — Number of days with outstanding balance — — — Maximum daily amount outstanding $ — $ — $ — Minimum available borrowing capacity $ 881,445 $ 935,550 $ 780,945 Liquidity information related to the ABL Facility (amounts in thousands) as of: February 3, 2024 January 28, 2023 Outstanding borrowings $ — $ — Outstanding letters of credit $ 11,553 $ 13,878 Available borrowing capacity $ 881,445 $ 947,764 On March 8, 2024, the Company issued a press release announcing that the Company entered into an amendment which among other things, extended the maturity of Academy’s asset-based revolving credit facility to March 8, 2029.
Liquidity information related to the ABL Facility is as follows for the periods shown (amounts in thousands): Fiscal Year Ended February 1, 2025 February 3, 2024 January 28, 2023 Average funds drawn $ 32 $ — $ — Number of days with outstanding balance 3 — — Maximum daily amount outstanding $ 3,900 $ — $ — Minimum available borrowing capacity $ 955,495 $ 881,445 $ 935,550 Liquidity information related to the ABL Facility (amounts in thousands) as of: February 1, 2025 February 3, 2024 Outstanding borrowings $ — $ — Outstanding letters of credit $ 9,258 $ 11,553 Available borrowing capacity $ 955,495 $ 881,445 54 Leases We predominantly lease store locations, distribution centers, office space and certain equipment under operating leases expiring between fiscal years 2024 and 2044.
E-commerce sales represented 10.7% of merchandise sales for 2023 and 2022. 50 Gross Margin. Gross margin for 2023 decreased $102.3 million, or 4.6%, when compared to 2022. Our gross margin, as a percentage of net sales, was 34.3% in 2023 compared to 34.6% in 2022, a decrease of 30 basis points.
Fiscal year 2024 was a 52 week year compared to fiscal year 2023, which was a 53 week year. Merchandise net sales for the 53rd week in 2023 were $73.3 million. E-commerce sales represented 10.5% of merchandise sales for 2024 compared to 10.7% for 2023. 49 Gross Margin. Gross margin decreased $98.8 million, or 4.7%.
Recent Accounting Pronouncements For discussion of recent accounting pronouncements, see Note 2 to the accompanying financial statements. 61
The Company has not recorded any impairment charges related to intangible assets during fiscal 2024, fiscal 2023, or fiscal 2022. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see Note 2 to the accompanying financial statements. 60
The following table summarizes our share repurchases for the fiscal year ended February 3, 2024 (dollar amounts in thousands, except per share amounts): Total Number of Shares Purchased Average Price Paid per Share (1) Total Amount Repurchased (1) First Quarter (January 29, 2023 to April 29, 2023) 750,010 $ 66.69 $ 50,015 Second Quarter (April 30, 2023 to July 29, 2023) 1,994,064 53.37 106,432 Third Quarter (July 30, 2023 to October 28, 2023) 863,631 50.51 43,625 Fourth Quarter (October 29, 2023 to February 3, 2024) (2) 43,526 62.57 2,724 Total Shares Repurchased 3,651,231 $ 55.54 $ 202,796 (1) Excludes the impact of excise taxes.
The following table summarizes our share repurchases for the fiscal year ended February 1, 2025 (dollar amounts in thousands, except per share amounts): Total Number of Shares Purchased Average Price Paid per Share (1) Total Amount Repurchased (1) First Quarter (February 4, 2024 to May 4, 2024) 1,983,967 $ 61.71 $ 122,425 Second Quarter (May 5, 2024 to August 3, 2024) 1,809,856 54.09 97,900 Third Quarter (August 4, 2024 to November 2, 2024) 1,044,027 51.19 53,441 Fourth Quarter (November 3, 2024 to February 1, 2025) (2) 1,706,487 53.41 91,146 Total Shares Repurchased 6,544,337 $ 55.76 $ 364,912 (1) Excludes the impact of excise taxes.
Future Liquidity We expect our existing cash balances, internally generated cash flows and available borrowings under our ABL Facility will fulfill anticipated obligations such as capital expenditures, dividends, stock repurchases, working capital needs and scheduled debt maturities over at least the next twelve months.
The primary drivers of the increase were: • $162.1 million increase in cash outflows primarily caused by an increase in repurchases and simultaneous retirement of common stock in the current year; and • $12.3 million decrease in proceeds from the exercise of stock options; partially offset by • $100 million decrease in cash outflows due to the prepayment of $100 million on our Term Loan in fiscal year 2023 57 Future Liquidity We expect our existing cash balances, internally generated cash flows and available borrowings under our ABL Facility will be fulfill anticipated obligations such as capital expenditures, dividends, stock repurchases, working capital needs and scheduled debt maturities for the foreseeable future.
The comparable sales metric for 2023 (53 week fiscal year) compares the 52 weeks ended January 27, 2024, against the 52 weeks ended January 28, 2023 (52 week fiscal year). The 2023 53rd week ended February 3, 2024, is not included in comparable sales for 2023.
The comparable sales metric for 2024 (52 week fiscal year) compares the fiscal year ending February 1, 2025 to the final 52 weeks of the fiscal year 2023 ended February 3, 2024. Fiscal year 2023 was a 53 week year. Merchandise net sales for the 2023 53rd week were $73.3 million. Transactions and average ticket.
Income Tax Expense. Income tax expense decreased $46.4 million to $144.0 million in 2023 as compared to $190.3 million in 2022, resulting primarily from a decrease in pre-tax income. ASO, Inc.'s effective tax rate for 2023 was 21.7% compared to 23.3% in 2022.
ASO, Inc.'s effective tax rate for 2024 was 22.3% compared to 21.7% in 2023. The increase in effective tax rate was largely driven by the decrease in pre-tax income in the current year, as well as decreased permanent adjustments related to stock compensation awards during 2024.
See Note 17 to the accompanying financial statements. 56 Leases We predominantly lease store locations, distribution centers, office space and certain equipment under operating leases expiring between fiscal years 2024 and 2044. Operating lease obligations include future minimum lease payments under all of our non-cancelable operating leases at February 3, 2024.
Operating lease obligations include future minimum lease payments under all of our non-cancelable operating leases at February 1, 2025. In the fiscal year ended February 1, 2025, we opened 16 new locations.
The footwear merchandise division sales decreased due to lower sales in the athletic footwear and work footwear categories, partially offset by increased sales in the casual and seasonal footwear categories. The sports and recreation merchandise division decrease was a result of decreased sales in fitness equipment and bikes.
The decrease of 3.7% in net sales was driven by decreased sales of 6.5% in the sports and recreation merchandise division, 5.8% in the apparel division and 3.9% in the footwear division, partially offset by an increase of 0.7% in the outdoor merchandise division.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA significant portion of our net sales and profits is driven by summer holidays, such as Memorial Day, Father’s Day and Independence Day, during the second quarter. Our net sales and profits are also impacted by the November/December holiday selling season, and in part by the sales of cold weather sporting goods and apparel during the fourth quarter.
Biggest changeA significant portion of our net sales and profits is driven by summer holidays, such as Memorial Day, Father’s Day and Independence Day, during the second quarter.
When appropriate, we also enter into fixed interest rate debt, such as the Notes, to limit the floating interest rate exposure on our long term debt or historically we have used derivative financial instruments to mitigate the risk from such exposure. A discussion of our accounting policies for derivative financial instruments is included in Note 5.
When appropriate, we also enter into fixed interest rate debt, such as the Notes, to limit the floating interest rate exposure on our long term debt or historically we have used derivative financial instruments to mitigate the risk from such exposure. As of February 1, 2025, we do not have any derivative financial instruments outstanding.
Removed
“Derivative Financial Instruments” and Note 6. “Fair Value Measurements” to our accompanying financial statements included in Part IV. Item 15 of this Annual Report. As of February 3, 2024, we do not have any derivative financial instruments outstanding.
Added
Our net sales and profits are also impacted by the August/September back-to-school selling season during the third quarter and November/December holiday selling season, and in part by the sales of cold weather sporting goods and apparel during the fourth quarter.

Other ASO 10-K year-over-year comparisons