Academy Sports + Outdoors Reports Fourth Quarter and Fiscal 2023 Results

Fourth Quarter Comparable Sales Declined (3.6)%: a +440 Basis Point Increase vs. (8.0%) Third Quarter 2023

Fourth Quarter Diluted GAAP EPS of $2.21; Grew 12.2% over Last Year

Company Opened Seven New Stores in Fourth Quarter; 14 New Stores in 2023

Quarterly Dividend Increased by 22%

KATY, Texas, March 21, 2024 (GLOBE NEWSWIRE) -- Academy Sports and Outdoors, Inc. (Nasdaq: ASO) ("Academy" or the "Company") today announced its financial results for the fourth quarter and fiscal year ended February 3, 2024. Fourth quarter and fiscal year 2023 included 14 and 53 weeks respectively, compared to 13 and 52 weeks in fourth quarter and fiscal 2022.

"I am proud of the progress we have made and the resiliency that the team has shown, as we have navigated through many challenges over the past year. We have been working through a choppy macro-economic backdrop while putting in place the building blocks for our future," said Steve Lawrence, Chief Executive Officer. "As we move into 2024 and beyond, we remain optimistic about our long-term growth potential. We are the value leader in our space, and we believe this positions us well to serve the active young families who are our core customers. Customers have shown a deep affinity for our brand, and we remain confident that our model is both scalable and transportable. We remain committed to our long-range plan goals and will continue to invest in our future growth so that we can enable more customers to have fun out there by shopping at Academy Sports + Outdoors."

(1) Includes a $15.9 million gain from a credit card fee litigation settlement in the quarter and fiscal year ended Feb. 3, 2024. The quarter and year ended Jan. 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.

(2) Adjusted net income and adjusted earnings per common share, diluted are non-GAAP measures. See "Non-GAAP Measures" and "Reconciliations of GAAP to Non-GAAP Financial Measures" below for reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures.

Note: Fourth quarter and fiscal year 2023 included 14 and 53 weeks respectively, compared to 13 and 52 weeks in fourth quarter and fiscal 2022.

Subsequent to the end of fiscal 2023, on March 7, 2024, Academy announced its 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. This is a 22% increase from the previous dividend payment. The dividend is payable on April 18, 2024, to stockholders of record as of the close of business on March 26, 2024. In addition, on March 8, 2024, the Company amended and extended its $1.0 billion ABL credit facility through March 8, 2029.

New Store Openings
Academy opened seven new stores during the fourth quarter for a total of 14 stores in 2023. In 2024, the company plans on opening 15-17 new stores.

2024 Outlook
“In 2023, topline sales did not meet our expectations, but we were pleased with the Q4 trajectory change. For the third consecutive year, we achieved double digit operating margins and a gross margin rate above 34%, underscoring the structural changes Academy has made to improve margins. The Company also delivered stakeholder value by purchasing $204 million of stock, paying $27 million in dividends and reducing its debt by $103 million," stated Carl Ford, Executive Vice President and Chief Financial Officer. "In 2024, we are focused on our long-range strategy of growing the Company by opening new stores, growing omnichannel sales, customer data acquisition and utilization, and improving our supply chain. Utilizing our strong balance sheet, we will invest in each of these strategic areas while we navigate the current consumer landscape because we believe that these initiatives will drive our long-term success."

Academy is providing the following initial guidance for fiscal 2024 (year ending February 1, 2025). This guidance takes into account various factors, both internal and external, such as the expected benefits of the Company's growth initiatives, current consumer demand, the competitive environment as well as the potential impacts from inflation and other economic risks. The earnings per share estimate does not include any potential future share repurchases and uses a tax rate of 22.0% to 23.0%.

(1) Adjusted free cash flow is a non-GAAP measure. We have not reconciled it to the most comparable GAAP measure because it is not possible to do so without unreasonable efforts given the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management’s control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide an estimate of the most closely comparable GAAP measure at this time.

(2) Fiscal 2023 net sales include approximately $73 million from having a 53rd week, which is approximately a 1% impact on 2024 sales growth.

Conference Call Info

Academy will host a conference call today at 10:00 a.m. Eastern Time to discuss its financial results. The call will be webcast at investors.academy.com. The following information is provided for those who would like to participate in the conference call:

A replay of the conference call will be available for approximately 30 days on the Company's website.

About Academy Sports + Outdoors

Academy 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, Academy has grown to 282 stores across 18 states. Academy’s mission is to provide “Fun for All” and Academy fulfills this mission with a localized merchandising strategy and value proposition that strongly connects with a broad range of consumers. Academy’s product assortment focuses on key categories of outdoor, apparel, footwear and sports & recreation through both leading national brands and a portfolio of private label brands.

Non-GAAP Measures

Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Common Share, and Adjusted Free Cash Flow have been presented in this press release as supplemental measures of financial performance that are not required by, or presented in accordance with, generally accepted accounting principles (“GAAP”). The Company believes that the presentation of these non-GAAP measures is useful to investors as it provides additional information on comparisons between periods by excluding certain items that affect overall comparability. The Company uses these non-GAAP financial measures for business planning purposes, to consider underlying trends of its business, and in measuring its performance relative to others in the market, and believes presenting these measures also provides information to investors and others for understanding and evaluating trends in the Company’s operating results or measuring performance in the same manner as the Company’s management. Non-GAAP financial measures should be considered in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. The calculation of these non-GAAP financial measures may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. For additional information on these non-GAAP financial measures, please see our Annual Report for the fiscal year ended February 3, 2024 (the "Annual Report"), which may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the "SEC"), which are accessible on the SEC's website at www.sec.gov.

See “Reconciliations of GAAP to Non-GAAP Financial Measures” below for reconciliations of non-GAAP financial measures used in this press release (other than Adjusted free cash flow) to their most directly comparable GAAP financial measures.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Academy’s current expectations and are not guarantees of future performance. Forward-looking statements may incorporate words such as “believe,” “expect,” “forward,” “ahead,” “opportunities,” “plans,” “priorities,” “goals,” “future,” “short/long term,” “will,” “should,” or the negative version of these words or other comparable words. The forward-looking statements include, among other things, statements regarding the Company’s future performance, financial condition, and capital deployment, including intent, ability, payment, extent, and timing of capital expenditures, debt repayment, dividends, share repurchases, interest savings, and execution of the capital allocation plan, each of which is subject to various risks, assumptions, or changes in circumstances that are difficult to predict or quantify. Actual results may differ materially from these expectations due to changes in global, regional, or local economic, business, competitive, market, regulatory and other factors that could affect overall consumer spending or our industry, including the possible effects of ongoing macroeconomic challenges, inflation and increases in interest rates, or changes to the financial health of our customers, many of which are beyond Academy's control. These and other important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in Academy's filings with the SEC, including the Annual Report, under the caption "Risk Factors," as may be updated from time to time in our periodic filings with the SEC. Any forward-looking statement in this press release speaks only as of the date of this release. Academy undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

(1) Column may not add due to rounding

(1) Column may not add due to rounding

Adjusted EBITDA and Adjusted EBIT

We define “Adjusted EBITDA” as net income (loss) before interest expense, net, income tax expense and depreciation, and amortization, and impairment, and other adjustments included in the table below. We define “Adjusted EBIT” as Adjusted EBITDA less depreciation and amortization. We describe these adjustments reconciling net income (loss) to Adjusted EBITDA and Adjusted EBIT in the following table.

Adjusted Net Income and Adjusted Earnings Per Common Share

We define “Adjusted Net Income (Loss)” as net income (loss), plus other adjustments included in the table below, less the tax effect of these adjustments. We define “Adjusted Earnings per Common Share, Basic” as Adjusted Net Income divided by the basic weighted average common shares outstanding during the period and “Adjusted Earnings per Common Share, Diluted” as Adjusted Net Income divided by the diluted weighted average common shares outstanding during the period. We describe these adjustments reconciling net income (loss) to Adjusted Net Income (Loss) and Adjusted Earnings Per Share in the following table.

Adjusted Free Cash Flow

We define “Adjusted Free Cash Flow” as net cash provided by (used in) operating activities less net cash provided by (used in) investing activities. We describe these adjustments reconciling net cash provided by operating activities to Adjusted Free Cash Flow in the following table.