Academy Sports and Outdoors (ASO) 6 Jun 232023 Q1 Earnings call transcript

Good morning, ladies and gentlemen and welcome to the Academy Sports and Outdoor's First Quarter Fiscal 2023 Results Conference Call. At this time, this call is being recorded and all participants are in a listen-only mode. [Operator Instructions]

I will now turn the call over to Matt Hodges, Vice President of Investor Relations for Academy Sports and Outdoor's. Matt, please go ahead.

thank quarter joining XXXX and and Academy everyone first Outdoors financial morning, you the for Sports Good results call. call Officer; President the Lawrence, Officer. on are Executive Hicks, Participating Chairman; Chief Executive acting and and Mullican, Michael Chief Financial Ken Steve

and in are reminder, release earnings and cause that subject management to statements uncertainties made considered forward-looking actual and the and may risks our our could to projections. this to, limited from risks call differ As be comments earnings statements. in by in but today's expectations our a include, the results the materially and SEC identified during not These statements uncertainties filings. are These factors release

certain GAAP undertakes the to The no non-GAAP at are statements. measures revise measures. obligation Today's Reconciliations available in which most is forward-looking release, to today's refer investors.academy.com. earnings comparable company any financial included to remarks also

Ken? will turn Ken the call over our to Hicks. I now

in for now us Thank and to the years, over strong, you, This April, proven transition this effect believe of morning, you took our right and President at forth team we Academy including thank future Matt. the Board of for place our X, growth Good Chairman officially on of is CEO set thoughtful Academy. and for the given plan, is I leadership strategy today. from June foundation announced the my succession In Executive clear the the strong XXXX. Board and Directors transition, several time built Directors. joining last we that have all leadership

Michael during Board Chief of and continue to company. significant the of executive with and Officer over to with company the Sports very transformation and April. abilities Michael lead And their plan the and together Executive committee our through performance. is now years. a of we last Academy and confident aligned contributions mission exhibited financial Officer, our Board leadership work Outdoors to will Merchandising all new long Chief in of is Financial They Lawrence, Steve X you and Chief the the now on operational The are Steve Mullican, heights Officer, their member And are range our shared well that Directors. I we President on the of values our vision,

and to our And and team talented an my of time Academy as and years. leading We've accomplished due XX,XXX time been lot unwavering dedication to here it's It's CEO, want the members, X honor my a rewarding of made and I team a past I have incredibly I over our conclude privilege the as thank the fun. our Directors. Academy Board recognize and committee entire that executive

support Steve I of look of have value our growth providing Chairman, you country, retailer. our fun we the as Academy our best on and the the the trust achieve during and in and also sports retailer who continued I we to transformation Academy leadership outdoors execution Board to team while of working for vision successful as Directors Academy stakeholders. with the we Executive and to strategy create all in of and becoming our for forward confidence become leadership are believed support shareholders, my the Thank know for you, in to today, the continuing a due company Academy. into role supported highly profitable your

I'll Steve Lawrence. now our new Steve? the CEO, call to turn over

Ken. Thanks,

continuing I our roles. last our enjoyed of it's leading privilege into guided our we honor look X.X the Ken start new to strong years, by foundation with for Ken our forward into both and has and transformation a He to Academy's me the an saying future. I've laid closely as succeed CEO. working company next partnership Let as and retailer a has a step truly over

value and lead dedicated outdoors fun to sports strong gear enable the as for they picked with team our the excited all through will Academy mission, experience outstanding they Academy. our up have XX,XXX our our and our also from assortments, providing every members to I'm proposition who fill day enjoyment over customers

have and a certainly it role I big the including While to environment. me shoes battle any same challenge, taking been proven the is It's legend Ken been capable past over like team. gives following the X [ph], fill a into on of confidence our current tested years have

have to a a also help future base, and sheet, loyal addition customer agree for long forward. bright a a we range thought us as Hopefully solid engaged plan all guide operating model, Academy. you'll move strong to In team, the highly is we productive well balance out that

Now, let's results. quarter turn to our first

economic on first environment challenging number presented quarter a fronts. of a very The

Investor During will second the and Analyst the in April, and early our that first be we Day for reiterated challenging most quarters us.

of morning, sales billion, negative year. net this Early reported quarter we X.X% into last X.XX first which comp versus translated a

of ahead the with sales up and XX%. expectations. these through the XXXX To were quarter, our our clear, be We softening below saw We being month. the a weakest as results continue be progress we baseline well April in to business

When when on has several you last ongoing customer compared year. factors in is know which headwinds, higher as they contending sales break how everything. transactions We are the resulted spend, such more to our that business to virtually macroeconomic the decline. and with being fewer costs careful that down, contributed customers there were The

up such As some categories of and these strong quarter. we fitness we're results bikes, expected, most several camping, called previously the and out, as big the challenged hunting, were as categories, from ticket still within against comping

to we patterns our the markets more these several we got Another some many major start seasonal On business positive categories. markets have of our and meant country consideration have of with enjoyed slower-than-anticipated off these categories. in the been to seasonal of the a with be outside weather a unfavorable is front, large outperformed that in has a where of chunk normalized and areas the weather is

for share was business And XXXX. best sleeve here. a much apparel, apparel, key performing having as seasonal division, tops roughly assortment better In such categories such which from national Looking we benefited market our was Nike, brands picked Carhartt. Columbia, as at X% of shorts, spring versus up up sales by short We've

Our of and the well Magellan [indiscernible], [ph] private by than performed brands during represent our grew and this more the value and apparel assortment and which all led seeking by brands These customers product quarter. Outdoors, also XX%. out R.O.W the clearly

Birkenstock, down brands slip-ins. in Footwear Nike, was X% last SKECHERS such business, strength and as and best the second We year. saw new Haydude, versus ideas

Kids well at more the Our running bought inspired customers of shoe we're [indiscernible] our also business, quarter. category business, the more casual shoes. during expense athletic looks was where the [indiscernible] athletic as standouts challenging The most as business it

Sports in have and and cooking & the into both team strongest success businesses declined DeMarini performers sports and the teams X% two recreation brands our new categories. sales ideas, In resulting and leaning as by bats gains cases, had with these such in Marucci baseball market Blackstone and grilling, year-over-year. outdoor share in being

Recreation as and purchases, outdoor sports & and and fitness such the these should challenged categories we the and improve furniture, being We move temps were cooler this water weakness up believe as quarter. weather of portion equipment, customer most as through such second the rainy we against some of and business to bikes the in attribute historic delayed other businesses fitness the quarter. areas demand in

ammunition with category to division continued XX%. down The It's year. from new strong remains weakest challenged be in did delivery to sales to outdoor from our seasonal XXX%. some of Outdoor year, colors. that while roughly to down perform up as we anniversary XX% We ammo and XXXX with have bright Hunting products running last with continues Yeti as last versus note brands sales performing continue strong spots which benefited important running Outdoor up such the

results first quarter become and what reporting As we and for clear to value newness has customers parse both the the innovation. of

sales customers during In both of deals towards promotions value, of buckets on and and terms the focus we've these trying seen with a quarter. gravitate increases clearance

We this outperform for see in from brands. national brands also value fiber which the performance drive

positively such totes, Edition of and places are the and Limited new Blackstone ideas regardless in price. new [indiscernible] seen shoe brands bags seasonal as responded and At in have customers our Colors such or Haydude time, Griddles, as this brands There to Yeti multiple Birkenstock. we've same

of for fronts. both the remainder newness and plan the even going the to harder be value will on forward push year Our the

$XXX a more will that basis point XXX promotions first XX.X% for similar shortly, merch lower rate basis in net regarding decline coming profitability, XXXX. decreased This adjusted to per XXXX. to revised contribute what points QX income the our profitability of by QX during The increase in was color in margins. quarter in at $X.XX or around or give down as an share. gross the margin margin due as well you to provide merch million in we more XX% impact quarter. factors was Shifting decline our driven was partially decrease versus to margins primarily XXX Michael saw merch outlook other detail help This

to Turning inventory.

quarter versus is X% in the also ran up X.X%. For down new focused XXXX. stores, X.X% on is increase areas per $X.XX team balance to slight compared The a position into sports. that are cleats of and and was inventory last in QX stocks total a billion, as basis year, low year increase [indiscernible] Terms ending, compared last such last units store primarily which fund to are year, was units to

we're categories inventory a and managing I and the Overall, and for done has all fresh. the job breadth the X over good summer season. team believe past is well-positioned our we depth The current across of And believe assortment our receipts of healthy years. selling the

to it aligns to we and trends as forward continue business. our manage plan is the sure move with make to Our inventory the thoughtfully in

back that economic Looking high continue of events of thoughtful There's a as our making the will ahead of navigate year. fathers near-term, in periods traffic in such ahead remain into to they inform of And we the as from we the head these spending stand the will their natural as time anticipate remainder couple current consumer year, the to us the half the environment. results back-to-school. decision the

on customers the we affordable positioning price. our space leader at We've that have out fun help everyday as value Academy there in increased our focus can

that inventory beneath and as plus to all efficiencies have macroeconomic we Our And inventory challenging stocks environment. DCs products We value, that stores move as in control. through of improvements QX. navigate typically drive while believe continued a position during managing surface well and strong seasonally in this thoughtfully combination we through this the us [Indiscernible] a appropriate under expenses summer strong positions the has we and months. peak remains

it turn to through to our I'll walk Now, over and financials Michael? you quarter XXXX guidance. updated Michael first

Thanks, Steve.

has leadership it these been say last an work honor years. X me to let under First, Ken's

company the as had a for achieve We of look a that a and winning Chairman. built has lot forward drive Ken his plan. him will long years to role and lot accomplished it. the results as have to to with range I team, come doing a help in company culture with we've fun new work continuing stay Executive our

of I during work to plan our stores responsibilities, key of with existing execute omni-channel With range to initiatives. centers. with long and and role into Academy of my a through the to our increasing pivotal we excited I store expansion, execute profits to openings, to evolution. new work look am productivity step the of team operational on team role I'm forward sales and a company's and and proud greater time talented distribution take growing the continue President the and expanded as Steve our in new such

with the Sales first billion let's than smaller negative Now, our for transactions planned were quarter quarter to and review fewer sales lower sales due X.X%. $X.XX first size. ticket Net were comparable results. of

clear, be me these Let our not meet expectations. results did

of We have our impact the been strategy. to allocation action minimize disappointing without taken substantially swift long we this Among have things, impacting plan or quarter. our reduce other operating able range expenses capital to

first margin decrease gross million XXX rate was year. a a point the of quarter of basis $XXX.X XX.X%, last Our with from

the greater the XX Steve quarter than mentioned, by first driven rate margins higher but costs. were higher year. was also basis As promotional losses last of lower from points shrink shrink from activity, decline primarily merchandise Total

expenses, sales, net XXXX. were The basis quarter, of primarily to quarter factors, first net million, X.X% of investments increase are $X.XX to of driven SG&A increase XXXX, XXX support stock-based and compensation, diluted points expenses the XXX diluted $X.XX sales, earnings store the in million, an we first plans. Adjusted $XX share technology In our or per GAAP income net the a was from increase making resulting decrease of was During point of by an share three growth or per new of in $XXX.X XX.X% share. basis were earnings quarter total, compared share. per per

satisfied sales and pre-pandemic with levels. well not are these results, remain that our While it we note to is above important profitability

of few significant keep the we operational the over will changes have that believe gains we last made achieved. majority have years and We the

further investing areas our our are We enhance profitability. in actively that will long-term of business

Turning the generated $XX the and in no to the had million outstanding balance $X billion cash net quarter, for during allocation cash business sheet. million. our cash At from this facility. first Academy shares approximately on activities the to $XX our invest borrowings the end capital we utilize repurchasing XXX,XXX execute million by and quarter. operating of in We credit $XXX in plan

Additionally, paid dividends. $X.X out we million in

$X.XX XX, Board July share of XXXX. XX, of the stockholders addition, a record on In recently XXXX per payable dividend June of approved as to

opening primary our growth of One strategies is stores. new

minutes this few So updating spend you I wanted initiative. important on to a

X XXX in stores opening plans in next stores We open part are We overall to remain to store performance open plan XXXX of based the as XXX the on track our of XXXX the to [indiscernible]. to years. confident on over our XX new XX

operating As rate in ROIC their we already positive Group, a resulting are above an with EBITDA. hurdle

XXXX pre-opening last several more success extension post-opening years. preparations, implementation the the and from among the for months, X open In quarter, have ranks of all new of learnings the openings A is performance significant top first store us, completed and the store new entirely by localized one part in new our of this of for market store in being Lafayette, better an several assortments, include marketing After Indiana. we store open activities. These openings. store sales the driven we

the second fun, store broad in have in seen our markets, been we open other value. QX. an of occur XXXX customers We will store Peoria, new we fiscal drawn Illinois. our The one concept to at high-quality quarter, new to and private top sell has everyday well In unique new the and of plan received. are As assortment national QX great openings remainder in brands

for remainder the of Now, year. the turning to outlook our

more current a cautious are on We pressures to customers. our taking macroeconomic the view due

are we waiting out. by However, not standing this and

taken in value position business We our and help increasing space. These focus this have our drive as the our several environment. the actions provider include: first, to in strengthening actions

pricing. emphasizing are by key We categories and into are that items leaning working value value everyday

managing Second, inventory our levels.

based revised controlling expenses expectations. Third, on the sales

forecast. already made have our continue expenses cuts, to we We and with will new reduce to align

fruit. worthwhile are growth and already Finally, supporting investments initiatives. These are our many bearing

downturn. the comes We will market be well-positioned for growth when this out of

to billion. we're Based $X.XX to on quarter revising fiscal from the range between GAAP $XXX follows. current the first negative and guidance expected Gross from to results our to negative $XXX sales million as GAAP share. business sales diluted between before of to $XXX rate XXXX trends, of Net Comparable per expected income margin range taxes of net XX% X.X%. million. million. earnings $XXX X.X% billion income to $X.XX is $X.XX and are per XX.X%. GAAP share $X.XX million and

from $X.XX $X.XX per share. earnings to range compensation excludes stock expected diluted share expenses, Adjusted per as share, per such certain which are estimated to

million to share calculated shares For is million year fiscal XX.X weighted share include stock-based compensation are repurchase any average expected count million repurchase full not on $XX earnings XXXX. million modeling in $XXX estimates potential for do a outstanding per remaining activity and of our $XX using The be to authorization. the purposes, diluted

adds $XXX have sales million which Fiscal still are climate, a million to the of from adjusted $XXX XX And to million to cash in in forecasted is year, $XX sales to even expect this million XXXX not expenditures where tough Capital approximately we year. expectations, to free $XXX week range million. $XXX met flow. generate

Steve closing turn Steve? thoughts. will call over I some that, to for the With

expenses. plan and healthy, our macroeconomic a to controlling react leans sales, to business value-based at of the some compelling team action inventory managing products this challenges deliver to also we have that but confidence a have plan manage as have prices through, can a It's into move position forward. we improve customers, our solid to While retailer great agile, our

year driven implementation the actions. following As by we sales progresses, improve, the the anticipate

drive and back in introducing brands new year of the the First, consumer that half ideas excitement. will

data upgraded traffic our utilizing increasing Second, customer targeted new platform. marketing, through

our Fourth, seeing enhancing opening start by functionality remainder lessons additional sales learned new improve sales contributions of as features throughout up the we're And of improving continually customer we'll stores as locations year. the addition omni-channel well [indiscernible] profitability finally, Third, from XXXX applying towards in our and to and the by experience. the the QX remainder of driving we've the the year.

We’ve represents delivering Simultaneously, total to addressable allow I on growth the a against a balance of model all grow with in plan. range than will is our sheet customer proven market in best a $XXX believe remain investing faster strong expected fun of differentiated us also opportunities business will GDP. We in retail Academy sell and that and in billion over the focused that our today. initiatives. long-term one experience position long growth to

As the we we strategies. April, continuously of growth build laid early in against while out years across by three facets business, in momentum improvements driving the all last our Analyst few from executing plan Day to our on

As for our a with by an outstanding omni-channel to more a In to customers. store their the our over and base new in and and existing X closing, attracting like stores and merchandising expanding dedication productivity, existing engaging driving opening thank our service markets passion reminder, of and business I'd XXX experience Academy growth these and helping strengthening assortment, customers. all building team are improving to members from deliver the XXX powerful the the years, next stores

out there. Now, let's have go fun

questions. for we Now call will open the up your

Nagel first Oppenheimer. from go coming Brian is [Operator question Please Instructions] ahead. The of

good morning. Hi,

morning. Good

First roles. new on off congratulations

you. Thank

Thanks, Brian.

to with question the first So I just have regard sales.

the relevant non-weather versus geography, weather. difference the but you improvement business weather about better weather here saw in mean, the I your stores weather impacted more and like? between us talked impacted the impacts understand to markets, maybe recognizing spring you did maybe then are as turn think, of I help QX, Michael, maybe

This question. tackle in is Steve, the first and I'll jump

you year, right, think we a pullback kind from thought the surge seen customer. XXXX. back we we've as of Last This XXXX, back we when So year. early a we towards saw But to the year, in been pandemic, obviously, where had would movement growth. a versus we've big start see rebaseline QX

well of that think facing out customers terms documented the there the issues in I some out there. it's of

I we're above emerge the the up share [ph], We're you look slightly that it are one, emphasize being evolved, that continue number where when market tracking up So business we to one as trailed a we sure off quarter March share XX% April, the tough in make we in of how well to the -- market things picking XXXX. were hold first: time period. second was quarter, kind of said, a I'll we most of and even in progressively ahead on up gains. best still February headwinds February. best at actually first. couple got saw we then But of we're in And was

seasonal headwinds had still we're was a certainly some challenging, some factor outdoor bit search from something of a a We about. against that the about categories. that some up talked be the saw We a We in little lot of bit talked QX. the being we business in QX weather certainly categories of and in

about think that challenging patio little You like for was us. thing a pools, that, more

experience saw challenges we that we as example, of geography. the well for didn't Those of very have some the some actually part we central Florida the about of weather weather in of the they challenges. into performed call, the talked got market, didn't the quarter, deeper really of part on As categories our some

some across seen those categories weather as So of seen we've back. up country, come we've opened the

that we're So to stabilize. going that to start business gives confidence see the us

the forward, XXXX coming new our of -- coming brands from opened XX is kicking look fit year, QX platform could half As about in back half online. this year, we've we've that the we've comps the impact stores. late vintage back initiatives additional year. talked we up we Certainly year, And the this new new we a our which of into the of coming part got customer off have we got got stores the starts [indiscernible] along our with total in data of

that then we're what And the right reacting future. business to now happening and we're seeing the to applying in

some favor, business through So, and to while as play of weather progress in the the we're confident things year we is our think we the going improve.

that in pools categories go seasonal Brian, some weather. with a entire margin certainly Like suppress frayed haven't we were particularly margin categories, weather, really margin. sales frankly we would standpoint, out we margin. patio and rich, the was very the standpoint, of margin goods categories footprint just Outdoor, date had but missing on duration. kind certainly some the selling given it sell-through little significant out. Promotions that thought from it fairly cooler I a we losing thing thought the other pools from impact, of and those gross patio season early But we to would, think the One long a feels for soft across because they sales, were rich where of are to the the those played soft the in margin softer and like bit help didn't a

margin. makes That question into segue which a is the my on actually follow-up perfect

mark So, obviously, QX. guidance weaker margins. new changes so to margin no gross here The gross make in is

that what the other for play? is reason that something the there So is is else some you said just was [indiscernible] that at or Michael

keep of we're in better part XXX mind, high basis pretty Yes, place that's from points starting several it. a XXXX. But than

sit on certainly XX We're of at margin you today, we off guide. we Here cooperation hasn't big to the we As other enforcement shrink. categories our are part from than it talked worse of substantially we law would some of point. miss, our that miss outlook thought with the some was need some going the Shrink said, bulk about, again, in be. points changed. The seasonal Where annual basis that gross only was

part guys. speak the here. significant don't in We've to control We is of this because boxing our a things. destiny or some five publicly, I are degree tactics, bad number to to four out want game of those implemented really of

we're think there. progress good making I

Some working. piloted is of what we've

get the a there think so And we'll benefit in the back half year. we of

here, that's freight to a come of rest half there's more really of supply there the year other for our in believe the play we freight understated half. that through that we the the think the we move as The back that and anticipated chain, back year. benefit thing We and in we benefit in

So into got promotions, other when that We ending we've the we're think and year. that feel of good to savings the got started some that there's initially pretty year XX guide XX.X the baked into going about get out in going forward. range we that we

Guys the all you. Thank appreciate I color.

Thank Kate coming of you. ahead. question is Sachs. Goldman The next from McShane Please go

good around for We commentary second a about to line, top bit the improving Hi, just question. little morning. Thanks from more half your ask first taking wanted the our half.

new new reasons, QX brands. learned a initiatives of as and listed number lesson well You as from including

half? wondering there, the was more that harder second the in could you detail, if Just there a any bit little especially walk comps us through given

business down in the Yes, the of sure. first dig beneath of kind a quarter, and you're of you at two tale cities. kind surface, When the look performed how that's

different business goods of the And down our or in be pricing it That [indiscernible] Customers sports value hard flattish. that value reacted we in to that business, business. more could I of be reflected well. side be If be resort that towards and gravitated the was track. the of bucket clearly and brands, couple private When couple performed everyday our footwear, promotional you or and outdoor themes apparel, could the a soft the Value, a roughly at XX%, that we dropped, can and good customer we worked. ways. look call of It our emerge, that that bucket sales relatively on value. clearance definitely have kind in would that on what the side

call. that and of on they Marucci and saw newness of price, wanted, DeMarini innovation. saw we pay would the from that. something that the it, mentioned irregardless for new Almost the they was innovative customer some I bats was Second up

bottle really for have seasonal we bags which plastic improved You there good think one a was about that some called or Yeti third Or mentioned. colors voted [indiscernible] is water the launch where we the a new in-stocks. Yonder, customer

have last team that sports really our year like categories cleats, We inventory. not having challenges, some enough --

So work, What off all those ticket, the of replacement big based of work goods. didn't some cycle businesses are improvements. long

[indiscernible] a So about bought or one. over kayaks, to where buy years past treadmills a you market new cardio machine the couple think if you

spring that'll the firearms. summer start about summer. go impacted the And that, think up away, against being as by mentioned, still seasonal in and as into deeper particularly little we then a categories category, talked We we ammo obviously weather, of bit to we're get the we surge

pricing. providing So, as we marketing, that we're value we lean work. positions to everyday our We're space. our that into and progress forward, value, going lean We'll to value do into those going of solidify things ensure that through through our

some to can In marketing. then those for rolling definitely value in prices cases, that we sure making make sure we're where categories we can. back credit holding deliver We're items on we and price get

got we continue accordingly. planned that other of into as We And Those down end we've we forecast plan the sure our then time cycle on long lead innovation. forward. deliver have to newness and built it, and businesses those making replacement businesses move

again, now we several categories We're one omni-channel. got the working. invest launch we In sales. pivot drive initiative. that's are we've assortment, point will driving believe into at customer continuing which that initiative we're business in year, We've start to getting ready the a earnest where can of been to we that, marketing diverse to investing still initiatives and do back value the because are to our early stage in can addition We got that the categories in very here targeted really of a half lean that in

a receive from quarter, is challenging to in invest. benefits allowed some has it. half. still those strong, sales don't we us standpoint from Cash back exceptionally we And to investments So expect which the like flow

could if And Is I the mentioned. that you there that just on prediction of maybe long you. of category any Thank some ticket stabilize when goods big or inflect? could would replacement follow-up you just your view think

this as were we year, part fall through close bit. start think bit. some some a still we as the off demand. the pretty last of of get headwinds to think of level We remainder a up little They're really we'll off against I little holiday, that see get we year, good to

not here. we're a But [indiscernible] taking

a ticket categories lot that of are big have working. We

from think you and are outdoor thoughtfully in but you it lot we're a will learnings accept it. present to When big share the to I We've a drive there's [indiscernible]. we that taking value, offer still have you which that and well can do you good needle -- we're doing, take got category customers category and in still meaningful there ticket. merchandise apply in

are come -- And that there's seasonal, that back big gets that deleveling off also the some is we are as product. that buying in customers ticket more to and like out coming [indiscernible] categories, seeing and starting

Thank you.

Thank you.

Thanks, Kate.

Thank Ohmes Robbie from coming of Please go ahead. America. you. of The next question Bank is

Hey, guys.

had first chance can, to congratulate Michael, So, haven't on I a three new Steve, all roles. your

IPO. congrats you a I the great think done have it's team two have questions. since what I guys together as on and

worse the about the The seven. I color? it maybe XQ a April bit, is, than -- first to talk question sounds little think like can more have comps been had we a minus little

hit would helpful. be more first XQ, we be in versus back half have a initiatives in into saw thinking should a second quarter? down sales And back follow-up. we thoughts half, the I in the XQ given short be you the heading what And lot other about quarter, than that of same-store and the then be guys any So that could should

half in X.X, continued launches and stay brand off. That as the all as guidance deceleration the away initiatives that reflected of some some as into Yes, activity. initiatives, surge some about, a see I'll we those of in temperature have the we we're that's kind but X.X. That saw past couple and CDB, that in tying seasonal business surges we level the weather we year. those off the got in we don't to categories got said, and shift, period. store quarter a there fall definitely May then summer and sure new But in. Certainly of time start chime some as this, QX, big off But to out it we of the obviously then the see headwinds up against see starting I'm little oversell we and about, bit. we down start to get that, initiatives first other pretty giving I April and such guidance. of want talked certainly flash into we color the And down into still the being the we'll the of once from we new talked a

that got to we've the plan [indiscernible], the the of end, get think consumer a we at Robbie, soften. bit guide, would at continue things low seem would Yes, assume better the high-end to little

I We've do the In of was so our and think April, we point preparing again the the a appropriately now expenses half the good deceleration on able now. had rapid. to back forecast. Honestly, year. we've a that got we've read adjust for been couldn't

… So

a mentioned that little be about? categories us should introduction can call we even thinking new then like maybe here, you out you anything of brands, And more you. you on give any -- can color [indiscernible] Got

always that certainly it on we probably announce Yes, in news a We facing our expect call. QX off pick bit. sometimes -- be to store from our a hold perspective, We're tease to those little the closer announce and immediately. earnings next and going that they the try during to customer up and

are during you give primarily coming apparel of get more the on the closer But got and we'll a things year. half we in. that So footwear couple of color as back we've

in quick, I'm going to exciting real … more Nike one squeeze

that. tell [Indiscernible] will I you

think how guys Nike Macy's, about do reopening that? you

The we and being That's terribly distribution mean, we're to years. into I us. a couple that last That go Candidly, Macy's. a about an I tailwind lot taking of they're one. that locations vendors [indiscernible]. being for of We interesting still Nike think said, certainly, mall, that's surprised control decided the don't back our that over all talked believe on true.

other much as as maybe retailers. based we our So see don't mall really business impacting it

Great. much. Thanks so

Thanks, Robbie.

Thank you.

is Thank you. Please ahead. question from The Lasser go Michael of next coming UBS.

for lot morning. my Good a taking question. Thanks

morning. Good

driving business XQ your it And factors Academy's different market Academy or share. is from would compared we can differences to Why several can underperformance? in is of for if customer it's mix, those even we Academy like assortment, larger for So the different are pair seem that that the competitors, account results case? what some losing address mix, to And really if in last quarters. do

data, get the across every picking We market And the Well, itself. at kind share share known definitively is And lot with market market start question base but across multiple up of I'll which in other we our of that's Circana, category. NPD. actually look share do almost as broad track as well. a resources where work categories. We we with we're formerly

I'll market not So losing share. with, start we're

have at of mix upon XX% we about look business, business, goods, goods XX% some a you different hard compare of you We're competition our versus When our who of soft us depending to, right? of as good certainly our is the the for of of well. much sports more piece side towards pieces footwear business, the weighted of business, been soft apparel, team those have the piece business mix business, healthier

believe, one one things each the the the assortment, going assortment versus a outdoor And diversified focused longer by complement diversified be we're customer, all having So that down overly categories. having a and customer, rec to doubling and having win other. is we term, in or they of two sports though, having

get as step seems well. in to shrink, associated have worse you sales, But for that before improve a going promotions that to In back half follow-up and is better? need what the shrink that. with a have that it understanding if My that question you doesn't up to year, freight longer order is offset to to gets benefit assumed it going the get on of promotions for to tail you're

bead of the think I'd the on good perspective, pretty marketplace. level got say from promotions a promotion I we in a

we margins back at being additional that go primarily merch added look about have you QX our If our during of XXX that promotions back because and talked commentary, points basis in. the time period, about down

with basis in was XXX margin down line much that. merch QX Our points, about very

the it ago, where it we say where it's into of think the were got today. the we've what baked And a kind not we've the I lay back guidance to year would pandemic. shared was plan now appropriate We've of for where seen got to promotional quarters certainly prior was couple a land than is it that proportionally. more that I

any terms on thoughts In of Michael, have that? shrink, you

the shrink, improve the year assume, other. and one same. Yes, won't taking way that. to lot about move needle actions there will or We've I taken mean, inventories remain we a frankly, we're most the that'll our there the be for of

you luck. much and Thank very good

you. Thank

you. Thank

JP coming ahead. next Morgan. go is The Horvers you. Please Christopher question of from Thank

Chris, is please your not sure mute. make on phone

Good morning.

front. So a couple margin questions on the

up you So executing I business you where you talked about expense as guess, well ramping cuts, considering slowed initiative. reacting that the are new and expenses. supply as in store openings chain as are cutting finding those

team whole. Look, a is as we there a it's lot cycles got [indiscernible] this retail, thought good business. lot back, an little to a here pulling the look There's And we this of and haves of where we thought us stores. and like forward in from in of those need we a in are a we've in I manage we feel trim he we've belt. things nice the through That’s lot think came and I shadow pretty about a task than out -- to been haves lot experience, going than coming his to. nice tighten able longer to labor to saw and lower standpoint, time there's expense that's been told bit He of when be to think our

and There's up planogram remodels. around opportunities do still more We found some opportunity thoughtful skinning resets, how that, there. fewer we to our being do

it's through have those up You business. invest can cut you Again in cash a been that now, out and still do. flow always shaping haves, still them strong, year that's to to to nice done. is this you we've we've have the get And there things that, able very what but way the

just bumpy I to through investments protect very At it's to same we're need strategy. manage lean be mean, that want how the going we managing focused and the we're support on to to short-term we're right? very range reiterate, we into make there, our time, long I the expense. environment, to going out thoughtful growth

we're sober operating So equal we're controllables environment business but the it's continuing time, in at the about the the controlling invest now for the in, parts, making long-term. same right sure to

like enabling And what of Can versus it. the back do anticipate guess, on what different you year, what and talk doing marking what's the now on that, you're what turns I that in exactly direct you the then to starting are -- to and assuming, way? more What's what side turning send about back limiting circulars half that and like, I'm mails the down Got that half? able being maybe for on? advertising what's from is? you

it multiple had customer It didn't well time a each very to data There's very In made Really market and for you of out target tell there's that consumer. a speak will lot, in them, databases. lot to our our place it I other. us back new a to the not but there not few real Yes, past, is wasn't of reinvest to a putting customer pull unlock lived circulars many. data cut left It tricky platform. in the we us big to candidly. we're for

just think didn't via broadcast a see have us our recognize there online broad this nimble out pretty putting off of I customer environment, of lot in and them going a of segmentation, there's come QX, in an profiles to end able of as of how of be in technology lot shopping to terms much -- us nimble to at behavior our place targeted that that we So [indiscernible] better that the [indiscernible] we invested file be emails candidly We've was going email, a lot much more in based browsing creating tail I via us. terms before more customers media, going the you're messaging see will you're think customer blasted we to opportunity based and triggered can see more you're retarget triggered based off off and lists, for patterns.

in to will investments the flowing I think some of inventory side help our those on us stores with utilization better of our help inventory. to with trucks. new better expense RFID

that. we're guidance scenarios is to the contemplates -- based pivot side. the to on on Again, lot and the feel expense sales helpful the we certainly And both early number sit feel the a ability pretty where today of year seeing. and what there's comfortable So a in different

to the year. fact a and it's day, and we the get slowdown, see mean, up react that we everything lined happening, remainder to I make the Michael never Yes, for gives other were of us if talking want there's time but the that QX sure as I

Thanks much. it. Got very

Thank you.

ahead. next Thank Melich you. question Please from The go Greg ISI. Evercore of is coming

is the ticket? went down. average of through And or that did was transaction size question ticket was hit Presumably deflation, traffic out ticket My the Hi. that first it went Or all it was that promotions count basket? and on Is the there quarter? come both decline the and declines. items

So if broke of challenge. across you the our look way transactions down at were traffic biggest the the quarter, transactions kind

you see AUR, both at can look you If flattish. they're

price lower like big In the and categories overall things terms apparel, some a it's decline, basket ticket pullback time of that. ticket those of big and more reflection footwear, long lead selling the of more AUR

last extended On the that on we I the ammo. consumer the side, of activity first had coupled softness year transaction the think with some quarter into surge of it's the

second extra follow-up I want then know And to Is action. it sure I right guide, it. as backing would that at be I have a this you're that make taking but first it look looks right? my your week into SG&A X% up that the here. a dollars up on cost SG&A I the Got like slightly, includes SG&A. quarter. were dollars in year.

a they and from a lower seeing were some phenomenon new our is quarter. the that Advertising up, store we're rate dollar Yes. fueled From corporately on growth standpoint, higher job standpoint. is of open was that

year in rate guide. back Again, in come So a time quarter. pivot from in on the a And to of we're the the based going the back got the were why lot standpoint, the half. for on that's to we've half rate of higher dollars

to the those flexing with down question. the takeouts expenses. variable discussed We've got some of again, that So I time in prior other along adjust that

and luck. it. good Thanks Got

you. Thank

Thank you.

of is ahead. Gutman next Please question you. The Morgan Simeon from go Thank coming Stanley.

those guess first kind is category so such for XXXX, Hey how our on merchandising this more Thanks up each holding durable I as year I of guess in Simeon. piggybacking taking baseline? question. year, of inflecting are impact you how on much next guys, just Jackie this categories are new for lower fitness line, top for And especially was the off does that off of this sales just about that, coming thinking equipment. guys

candidly. 'XX. up where where That's much business, QX, So QX Across I'll XX%; with most start in with, of of versus XX%. the and sports we Apparels were pretty on XX% sticking line we're with line pretty about XX%; them up that. much are recs outdoors pretty average, the were in we than more to most that was sticking up close pretty -- up business a little and

So call, on versus kind XXX% actually category average, is like over they're talked the ammo benchmark. on We about same up all 'XX. in of hovering around that

couple been as place that the 'XX, of There's a be categories that. categories hobby 'XX. it's little we've are time up still But of in below seen people tracking period off. not to would picked not bit softer a even that 'XX. closer sticking one the fall higher as that a maybe with fishing much some versus many Fishing, than a of little So

As think first of XXXX, XXXX to about get XXXX. around thoughts to we need you sort get we before any

and better guess Are down you best Thank just guys much. you any Understood. within follow-up. trade quick very good, seeing of a I And signs your mix?

saw gravitating better same value. seen private year We actually about customer we flight took that, advantage promotion, or towards brands customers impacted of [indiscernible] run down. as we'd national gravitating took talked ago had label most Yes, weeks a The did that to brand as the customers more we than places were performing trade was and We promotions. towards more we a clearance, the value. vitreous, more our we private towards business. saw We've

seen gravitating newness that. on the mentioned, certainly other the So customers end and But, we innovation. of talk to also as I

paying we delivering had innovation, move we're not more customer got that's that things, year. we're of that customer against as so voting to the make we wants on out same last there, those the the is is value what for focused both sure forward really they sure what delivering the making is And newness and for

so much. Thanks it. Got

Fitzsimons you. Thank Kate Wells go Please The is coming of ahead. question Fargo. next from

morning. my Thanks for your roles. questions. Yes. Hi, of good taking elevations everyone the congratulations, And on

Kate. Thanks,

footage XX XX to I you on guess this year. to question stores just right, guys alluded my growth,

you in little than stores obviously evaluating? acceleration I tougher Or growth, confident with just the know today. very the This KPIs the out XX And looking pacing implied are year to out just have XXXX right, then just at the What we year philosophy XXX sound given hear of path hoped. the pleased should I shaking what that to tougher, your footage next vintages. again you're for few seeing footage the what that how XXX looking with You is to XX remains And just XXXX want you would I’ve think you're just in to XXXX, are around that business year, you're years XXXX, pacing. to a this extent maybe one next maybe in with kind if the follow-up. the

about flow. operations. to our to cash months accretive strong from think first peers. plan X say, average our cash this already fund growth is I flow And as to the It's Yes, incredibly still cash strong. thing compared the in from incredibly I'd to keep old. And XXXX the flow mind, its It's all vintage, we on of

the continue we to store the We're an of pleased And that so should drive. with this is clearly investment progress very new program.

and we and out few specifically wanted early set was for it stores paste to capability was apply learn formats them from it a us a and mentioned, those up test new with learn learnings. markets. we a As to and is reason. We next to this build And really a and layouts challenge new stores that year group this new of and year

a we've openings make on one them stores what In which ever environment. with find was and few Lafayette store a apply sure had, Lafayette a very very so market we've initial out in soon. done. they're brand of is read us the very, for better tough new here Peoria to we'll which You in working and the

looking the we're at and is the very stores thing We're to new of think the bullish ramp very, do. the on opening very right we Again, store encouraged it. So our ROIC, with program. this we're

And 'XX a perspective when we from variety look vintage [indiscernible]. at the

on clear standpoint, out a vintage of average hurdle. to real accretive again, X the cash XX% a months gate. being That's that From strong sign. flow going And

that we've that year first read The through program.

go helpful. buyback a flow several say then off alluded forward, the what to back just From I on with I'd seen, perspective, But we the piggybacking at lesser certainly times. bought speak this very line guess given Okay, But have you to can cash QX. year? obviously, that top you expectations here the in appreciate all the your reset on you guys just Michael, a appetite that, volatility. can stock pace, buybacks

I guess our Yes, on that. philosophy hasn't changed

priority balance to strong maintain first Our is a sheet.

it's think important to to that We'll consistently. extent variety we've the be growth, to feel we the same cautious we of in a withstand have At time, will We We environment. comfortable this it flexible. capital cycles. have want that that do and shareholders, return funding some nimble be a cash structure over. economic Again left I and done can

remain comfortable And buybacks obviously of The and not we we value part we with. capital cash. going generate where general, it important a generated where In allocation great ton felt first we quarter, will quarter our and of the is, forward. an to return what it's in we our stock a policy thought first that think was was

Great. Thanks very much.

from Please ahead. Capital. you. next Loop Anthony is Chukumba of Thank question The go coming

for question. Thanks my morning. Good taking

So first question.

down headwind the this all? the quarter. that that think were returns know about Do in talked headwinds You We down that you refunds XX% were you first year. tax saw U.S a at or was income about

of going time certainly, we but thought lean headwinds refunds, at we headwinds, customer was all probably an Yes. tax are pretty card contributed I those into Yes, to there. high. the what one high Credit out say, all debts them didn't balances consumer

lot ceiling, there's I And, got the also a which threat the things, you of they of saw. think, So debt into playing just to it. different remember

out the of in at of to most. impacted one was that it's So, sure. the for [indiscernible] the all which But weighting parse psyche, certainly, think hard played those I part

Got of market than guidance, Understood. a take follow-up, your And cash then kind just if continuation free updated midpoint XX% of last flow, that's it's the that -- current question Got on receive. cap. it. you of a With and the last your your on more it. I the

reduced let way. So less you question I guess, your me that's the make different that over stock of I buy my back mean, year. guidance any remainder to in ask does yes, follow-up. likely the

return. the point, business to cash. generates your Anthony to execute a strategy to the We're going got of extent lot we've to cash

We do being our We're We're make going do. after going which return, that. and some will have if we stability to nimble. we And we'll prioritize investments, that, do to that. fuel can to

it. Got

lost that. this with can In we want range. I do in me store left more above well the on any thing $XX our -- We is stores one the they to run store. in the I range. don't stores, this. think don't all But have million They're it's profitable that

cash. I a returning environment, even going demonstrate that. business, to to And can generate continue a of got to to your lot we've this challenging point, do So we're history in think and of a

you. Thank That's helpful.

Anthony. Thanks,

from coming question go Stephens, Daniel ahead. Thank is Imbro of Inc. Please you. The next

some -- Thanks and get given inventories and how levels we anywhere the year? start port to of the a last back X Michael, that as underperformance, business the that at present inventory look heavy, it look cropped or we is and that Coast there West as everybody. need I want risk chain. half over questions. inventory. about new Or on at of is impact a we sales today, supply in-stock to the your morning, talked the you have days, West anywhere they Coast the today? into light then the delays is good the the up does chain But supply Hey, the for taking there to our little

and probably one. this tag team I'll Michael

stock across virtually So broadly back certainly, I every say would category. we're in

a most that as we slowdown of over seasonal of So years. early things we a couple faced those goes There not inventory flow cases, that. problem, the inventory that's places watching about can certainly we the to and couple last that that it's pretty keep like not closely. saw It's In where are think need we out though, that we're on, watersports, bad.

geography. You some almost some saw with year those of of round categories our

of chain, et everybody of with past think bring has gotten we all In Coast the terms disruption diversified the of supply along in ports, through, with of of and I'll you of the impact pretty in West number the terms goods tell cetera. we years, couple I

seen these We likes think So don't really competitive we we West think them disruptions that. substantial competition, Coast. I But any bring the disruptions haven't of the maintain in are impact on don’t when West the to I advantage are there the Yes, the anybody on Coast. Coast. West a

and impacted, not do a Porter we a industry entire get on have the some through Galveston [ph] indirect we but impact may impact, can others. Coast lot a the Now East but as direct impact direct as

LY, store, inventory holds. with believe conservative, in cost find guidance per to out sense year more Thanks. aggressive savings, belabor Appreciate but look unit these could that on the And does point, kind but significant compared maybe talked about growth, changes get a change have, changes assume far? cost I follow-up to that Or the at the outlook, you as are quantify actually remarks. that inventory, mentioned, or made put can you the how you to the down of you've continue that no it outlook his in on hit just we're color. for so dollar we prepared be? that the but take outlook. Steve, thing just the the does to On a he basis Michael, in you incorporate more guidance. to then cost just the the what not to And SG&A nice to One

the that. where that on it in necessary. we'll we've of these identify Yes, the -- we And put in for it, pivot come thought that's got perspective, if today. leave and cycles, guidance we We team very on wouldn't rate I the through a it I what seasoned been lower a can not leave will outlook. didn't identified and year believe again, we've we'll we're number where start that's there. think a we'd from And sales But

everybody. Back queue. Thanks in the

Thank you.

ahead. Wedbush We are showing Seth securities. is of from Basham final Today's question Please time for one last question. go coming

Thanks and good a margins. lot, morning. My around gross question is merchandise

pieces we provide basis could moving color as the you you was shrink quarter, XX to the other more promos? If headwinds. mentioned pieces? were How in some much freight offset that down moving overall was How XXX any much to was points and basis point

a were to up a were a it. So bring look was bucket it down both down perspective. We Couple quarter. you impacted an margin mix we of at sales little bit for level. the things don't granular Clearance increase that if of to from mentioned sales, promotions that those they as

the margin. So doesn't find merch Freight below impacted That's definitely our us. there. its into that line way

So certainly as but is gross our in calculated. we profit it

To some to goods. we was the fewer was way the clear, they headwind were we pools to out little thought the set and plan way. it of I way planned of Okay. [indiscernible] watersports margins from played planned that the it from the say outdoor we and merch a down margin the be mix promos our merchandise due a terms would shrink and in rec, we seasonal where larger were soft Yes, of was sales, yes, but off and

value of our the retailer, than remember clearance, less is on get, primarily average, also our based promotions, work XX% thing make You in other business. everyday and that to up you've got

its of everyday baseline price. stable of value So XX%

Got offline. it. you. Will Thank follow-up

Thank you.

At you. I'd Mr. Thank time, Hicks this like to turn back comments. the closing to over floor for

we're on and of I'll results. the a challenging I feet, balls has to going year we're reiterate, than wanted But then start we're satisfied just anticipated. I'll it to on. start been our what's more little with the The over the reacting, not to we Ken. certainly pass

is not the put year. and of take goals for we're all to the that sure of in. many And to like So today the simultaneously, against we're then as long-term, that terms we in a a we can. short-term that laser We've out we think model that deliver her in focused model off on goal making got pounds believe navigating remainder transportable. going the that customers bring in we and of And strategy guidance is this our range We've operating scalable an the got as that we Academy our ball long

the on at to going we're stay So same time. focused the long-term

[indiscernible] couple clear quarter strong want With a that, baton a tough this Thanks, closing to a and it's to a a foundation I and said that chance plan solid to remarks. pass very do on. the team to experienced But is Steve, move forward. with

markets will for company Our will areas us that which which and grow the new stores, of new to and view. primarily new volume per existing provide cannibalize the will of through us markets strategy -- not the and be increase breadth opportunity will of in most is to for growth our Academy's the provide

where our taking for and to our done And outdoors job pursue and investors us they've being that working to thank want that guys. I with the strengthening also members target forward have to in consumers. go are company. the to want them our to retailer great we in I investments But the they're business, well. easier the for team shop sports of better forward existing and confidence our everybody it and stores also strength to and is vision that best thank of all the thank put up see foundation We and country. to mission the wish us we of customers. make our and of to with to make our in you we And to new challenge. and all role. in contribute the believe all you Thank omni-channel here Academy as our I it care continue the the in team doing I working look sure having position the to

gentlemen, thank today's Ladies participation. concludes and you for This your conference.

at this or the time day. the and your of off You webcast your enjoy rest lines log may disconnect phone