Academy Sports grows ecommerce sales in Q2

Academy Sports + Outdoors Inc. saw net sales dip 2.2% in its second fiscal quarter, which ended on Aug. 3.

Comparable sales fell 6.9%, a steeper decline than the 5.7% drop seen within the previous quarter, based on the retailer’s latest earnings report. CEO Steve Lawrence attributed the difficult quarter to economic headwinds, a distribution center backlog from a brand new warehouse management system, and a storm-heavy season in key markets.

As a part of its growth initiatives, Academy Sports’ ecommerce business posted its third consecutive quarter of positive growth, with online sales now accounting for 9.7% of total sales — up 30 basis points from last yr, Lawrence told investors throughout the earnings call.

Academy Sports + Outdoors ranks No. 145 within the Top 1000. The database is Digital Commerce 360’s rating of North America’s top online retailers by their annual web sales. Digital Commerce 360 projects Academy Sports + Outdoors ecommerce sales to achieve $734.26 million in 2024.

Academy Sports + Outdoors ecommerce sales

Academy Sports sales and financial highlights in Q2

For fiscal Q2, Academy Sports reported net sales of $1.55 billion in Q2. That’s a 2.2% drop from $1.58 billion in the identical period last yr. Net income fell 9.2% to $142.6 million, from $157.1 million a yr ago.

Throughout the earnings call, company executives noted the financial strain on the corporate’s core customers — primarily energetic, young families — resulting from inflation and rising bank card debt.

These customers, earning on average $50,000 to $150,000, remain cautious with spending. Academy has seen an increase in bank card and buy now, pay later (BNPL) usage as household debt hits multiyear highs, based on chief financial officer Carl Ford. While inflation has eased, high prices also proceed to affect spending, and sales boosts during major shopping events couldn’t fully offset slower periods, he said.

While sales during Memorial Day, Father’s Day, and the 4th of July performed well, back-to-school shopping in July lagged as many shoppers delayed purchases into August, pushing some sales into Q3, Lawrence said.

Severe weather, including tornadoes in Houston and Dallas and Hurricane Beryl in July, also disrupted business in key markets. Despite the challenges, Lawrence noted that Academy held on to much of the business gained during the last five years, with Q2 sales up 25% from pre-pandemic levels.

Growth and initiatives

Recent store openings remain a key driver for the corporate, Lawrence said. Academy Sports, which operates 285 stores across 19 states, opened one latest store in Q2 and three up to now this yr. The corporate plans to open 15 to 17 latest locations by the top of fiscal 2024, including nine this fall.

Lawrence also pointed to the early success of Academy’s same-day delivery partnership with DoorDash, which launched in June. The service is attracting younger and concrete customers, particularly in areas without many physical stores, he said, with average delivery times under an hour through the DoorDash app.

Currently, orders placed through DoorDash are handled individually from Academy Sports’ primary website and aren’t included in its ecommerce revenue. Nevertheless, with Phase 2 of the combination, same-day delivery might be available directly on Academy Sports’ site, and people sales will then contribute to the corporate’s online revenue, Lawrence said.

Also during Q2, the retailer launched its “myAcademy” rewards program, offering perks like a ten% welcome discount, free shipping on orders over $25 (in comparison with $50 for non-members), and faster checkout online and within the app.

Each day signups for this system have greater than tripled in comparison with prior efforts, Lawrence said, putting Academy Sports heading in the right direction to surpass 10 million members by the top of 2024.

“For the rest of the yr, we are going to deal with increasing traffic and conversion for our stores and website, by leveraging our improved targeted marketing capabilities, and expanding our latest loyalty program,” he said in a press release.

Outlook for the yr

Academy revised its full-year outlook for fiscal 2024, projecting net sales between $5.9 billion and $6.1 billion. This reflects a 4.3% to 1.4% drop in sales growth in comparison with 2023.

Ford said the ultimate sales final result will rely upon August trends and the success of efforts just like the latest store openings, enhanced promotions, loyalty program growth, and leveraging the DoorDash partnership, especially after holiday shipping cutoffs.

Academy Sports Q2 sales recap

• Net sales: $1.55 billion, down 2.2% from $1.58 billion in the identical period last yr.
• Comparable sales: Down 6.9%.
• Net income: $142.6 million, down 9.2% from $157.1 million.

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