Loading...
01/10 22:43
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects mixed sentiments: strong eCommerce growth and successful product launches (e.g., Jordan) are positives, but the lack of specific guidance and flat gross margin guidance temper enthusiasm. The Q&A highlights concerns about higher prices affecting demand and a promotional environment. Market cap suggests moderate volatility. Overall, the balance of positive and negative factors leads to a neutral prediction for the stock price movement.
Net Sales Net sales for the second quarter were approximately $1.6 billion, up 3.3% year-over-year. This improvement was attributed to a 0.2% increase in comparable sales and an 18% growth in the e-commerce channel.
Gross Margin Gross margin came in at 36%, down 2 basis points compared to last year. Merchandise margin expanded by 40 basis points, but this was offset by shrink and higher e-commerce shipping costs.
SG&A Expenses SG&A expenses were 25.3% of sales for the second quarter, an increase of $36 million or 150 basis points year-over-year. The increase was driven by 130 basis points of new store growth, 20 basis points of technology investments, and 10 basis points of depreciation.
Operating Income Operating income was $172 million for the quarter. No year-over-year comparison was provided.
Diluted Earnings Per Share (EPS) Diluted EPS was $1.85, and adjusted EPS was $1.94. No year-over-year comparison was provided.
Inventory Levels Inventory per store increased with units per store up 4.5% and dollars per store up 8.2% year-over-year. This was due to pulling forward domestic inventory receipts at pre-tariff prices, primarily for evergreen products like bicycles and free weights.
Free Cash Flow Free cash flow for the second quarter was $21.7 million. No year-over-year comparison was provided.
Cash and Liquidity The company ended the quarter with $301 million in cash and an undrawn $1 billion revolver. No year-over-year comparison was provided.
Dot-com business growth: The dot-com business grew approximately 18% during Q2, with improvements in site navigation, functionality, and order fulfillment options. Online conversion and average order value also improved.
New brands and products: Introduced new brands like Jordan, Converse, and HydroJug, which performed well. Expanded existing brands like BURLEBO, Ninja Coolers, and Birkenstocks to more stores.
New store openings: Opened 3 new stores in Fort Walton Beach, Florida; Midlothian, Virginia; and Morgantown, West Virginia. Plans to open 20-25 locations in 2025.
Market share gains: Achieved meaningful share gains in key categories such as apparel, footwear, sporting goods, fishing, and outdoor cooking. Strong growth in firearms market share as well.
Inventory management: Pulled forward domestic inventory receipts at pre-tariff prices, focusing on evergreen products like bicycles and free weights. Inventory units per store decreased by 30% since Q1.
Technology upgrades: Rolled out RFID scanners and new handheld ordering devices to improve inventory management and customer service. Weekly inventory updates for major brands improved in-stock rates and sales.
Customer loyalty program: Expanded the myAcademy Rewards program, adding over 12 million customers in its first year. Targeted campaigns like 'Summer of Savings' increased enrollments, redemption rates, and sales.
Tariff mitigation strategies: Partnered with factories and vendors to absorb costs, shifted country of origin, adjusted unit buys, and optimized pricing to offset tariff impacts.
Historic Flooding in Texas Hill Country: While none of the stores or team members were directly impacted, the disaster affected the local community, potentially influencing customer behavior and local economic conditions.
Inflationary Environment: Consumers are trading down and seeking ways to stretch their spending power, leading to traffic erosion in lower-income cohorts and flat traffic share in middle-income consumers.
Seasonal Category Performance: Cooler and wetter start to summer delayed sales in seasonal categories like swim, pools, and summer footwear, impacting early quarter performance.
Tariff Impacts: Tariffs have created incremental expenses, requiring mitigation strategies such as shifting country of origin, adjusting unit buys, and leveraging pricing optimization tools.
Shrink and E-commerce Shipping Costs: Higher shrink and increased e-commerce shipping costs offset merchandise margin improvements, impacting overall gross margin.
SG&A Expenses: Increased SG&A expenses driven by new store growth, technology investments, and depreciation, which could pressure profitability.
Inventory Levels: Elevated inventory levels due to pre-tariff purchases could pose risks if demand does not meet expectations, despite being evergreen products.
Comp Sales Guidance: The company has tightened the low end of its comp sales guidance for fiscal 2025 from negative 4% to negative 3%, with the comp range now being between negative 3% and positive 1%.
E-commerce Growth: The company expects its dot-com business to continue driving growth in the back half of the year, following an 18% growth in Q2.
New Store Openings: Plans to open a total of 20 to 25 new locations in fiscal 2025, with three new stores already opened in Q2.
Inventory Management: Inventory levels are expected to normalize as the year progresses, with a focus on maintaining a strong inventory position to support sales and mitigate tariff exposure.
Capital Allocation: The company remains committed to balanced and disciplined capital allocation, with over $530 million remaining on its current share repurchase authorization.
Dividends Paid: During the second quarter, the company paid approximately $8.7 million in dividends.
Share Repurchase Program: The company did not repurchase any shares during the quarter, choosing instead to allocate capital to manage inventory. However, the company has over $530 million remaining on its current repurchase authorization.
The earnings call reveals strong e-commerce growth, successful store openings, and a strategic focus on high-income customers. Despite some challenges like ammo sales, the company shows resilience with positive comp guidance and a robust capital allocation strategy. Management's optimistic outlook and effective promotional strategies further support a positive sentiment. Given the market cap, a 2% to 8% stock price increase is likely.
The earnings call presents a mixed picture. While e-commerce growth and new store openings are positive, the overall financial performance is tempered by negative comp sales guidance and potential gross margin pressures. The Q&A highlights uncertainties, such as wide Q4 comp guidance and ammo sales impact. Despite some positive elements, like high-income customer growth and strong private brand performance, the lack of detailed guidance on buybacks and mixed financial outlooks suggest a neutral sentiment for the stock price over the next two weeks.
The earnings call reflects mixed sentiments: strong eCommerce growth and successful product launches (e.g., Jordan) are positives, but the lack of specific guidance and flat gross margin guidance temper enthusiasm. The Q&A highlights concerns about higher prices affecting demand and a promotional environment. Market cap suggests moderate volatility. Overall, the balance of positive and negative factors leads to a neutral prediction for the stock price movement.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
