Academy Sports + Outdoors reported their Q3 earnings today and despite seeing negative comps, they continue to grow and expand. A big part of their strategy has been expanding store count both in new and existing geographies.
They’ve refined their store opening process over the past couple of years. Through the data they’ve collected, they have a good idea of who their customer is for new store locations.
In prior calls, we’ve discussed focusing more on the suburbs, exurbs, and underserved medium-sized markets. The reasoning behind this is simple. After analyzing the data, these types of markets are target rich with our core customer demographic.
Steve Lawrence, CEO of Academy
They opened 16 new stores in 2024, bringing their store count to 298. In 2025, Academy plans to open another 20 to 25 new stores.
Measuring Market Share
Academy has a unique business in that they are hard to comp against other companies. They have a diverse set of product offerings that instead require comparison against a set of companies.
They’ve had success in the grill category, and have noted in the past that they’ve been taking share from competitors. We got an idea of who they view as competitors and how they’re measuring market share.
I mean, when you look at who we are and the different companies we compete against, I mean, it really varies by category. You take a category like outdoor grilling, it’s probably the home-improvement guys we compete against. You take a category like fishing, maybe a company like BassPro or hunting maybe like Cabela’s and/or sports warehouse. So depending upon the category, we have a different competitive set. We look at market share broadly across a lot of different categories.
Steve Lawrence, CEO of Academy
We use Circana, who is kind of the gold standard that used to be NPD. We track market share for the categories they cover through that. We use NICS checks data for firearms, some places like AML where there’s not market-share data, we use vendor sources. And what we hear and see in all that is that if you look back on a long-term basis over the past five years, we picked up a lot of market share.
Weather
The weather this fall was unseasonably warm. Here in Michigan, we had 70 degree days stretch deep into the fall months.
While that’s great for enjoying summer weather a little bit longer, it’s not great for very seasonal categories like fire pits. We saw it on the manufacturer side and at the retailer level.
Conversely, a lot of the fall seasonal categories in this division such as fire pits and patio heaters saw sluggish sales caused by the aforementioned much warmer than average temperatures across our geography.
Steve Lawrence, CEO of Academy
Consumer Spending
Consumer spending has been tight at all major retailers. Academy saw episodic behavior with consumers where they come out for events like holidays or back to school spending, but not much in-between.
When they do come out, they continue to see an increase of spending on credit. This is especially pronounced online, where more people are opting for Buy Now Pay Later products.
I would tell you we’re still seeing people funding their lifestyle on credit and credit products. We’re continuing to see credit card penetration paired with Buy Now Pay Later as a percentage of our overall tender up year over year and that’s amplified at those kind of lower three quintiles, if you will. And for Buy Now Pay Later specifically, yes, we are seeing more of that.
Carl Ford, CFO of Academy
We have a couple of different options. It really over-indexes online. Our online average order value was up helpfully in the third quarter and it was really all from Buy Now Pay Later transactions where people are basically financing that over a couple of months to afford their wants right now. So a little bit of a continuation of the same and that’s the color.
Consumers are also being value focused. To meet that demand, Academy is leaning into promotion for certain items to drive traffic to their stores. This includes some very inexpensive grill offerings.
Customers also continue to gravitate toward the value offerings in our assortment, which was reflected in the strength we saw during the promotional back-to-school season. Our large private brands, which are one of the best articulations of our everyday value proposition, also continue to perform well during the quarter. To capitalize on the customer’s focus on value during the holiday peak, we’re supplementing our strong slate of everyday values, some compelling promotions, which range from $4.99 sleep pants to $39.99 kids bikes, all the way up to $99.99 gas and charcoal grills. Newness continues to resonate with customers as we navigate it through 2024.
Steve Lawrence, CEO of Academy