On September 10, Academy Sports and Outdoors (NASDAQ:ASO) posted second quarter results that looked strong on the bottom line and shaky underneath it. Net sales rose 3% to $1.65 billion, but comparable sales slipped 0.4%, and the gap between those two numbers is where the real story sits. A one-time tariff refund did most of the heavy lifting on margins, while the retailer’s own commentary pointed to a customer base splitting in two.
A Tariff Windfall Fuels Growth
Academy’s headline numbers moved in the right direction. E-commerce sales grew 12.8% for the quarter, lifting online penetration by 110 basis points, and adjusted earnings per share climbed 19.1% to $2.31 from $1.94 a year earlier. Gross margin expanded 440 basis points to 40.4%, with 510 basis points of that coming directly from tariff refunds the company received during the quarter. Management responded by cutting private label prices, taking a key grill back to $99.99 and a signature shirt back to $19.99, and framed the move as a way to keep traffic flowing through a pressured customer base.
The 46 stores opened between 2022 and 2025 that are now in the comparable base grew mid-single digits, and Sports & Recreation sales rose 6% on double-digit soccer gear growth tied to the World Cup. The company also raised its full-year adjusted EPS guidance to $6.50 to $6.90 and its gross margin guidance to 35.5% to 36.0%, while myAcademy loyalty membership passed 15 million and credit card spend jumped roughly 20% after a program relaunch. Academy repurchased $181 million of stock in the first half, about 5% of shares outstanding, and is layering on new growth bets including a retail media network, an AI-based search overhaul, a TikTok Shop pilot, and the launch of HOKA in 15 stores this fall.
The Low-Income Shopper Pulls Back
Underneath the tariff-driven margin story, Academy’s core comp sales business softened. Traffic from households earning less than $50,000 a year fell in the high single digits during the quarter, a steeper drop than the low single-digit decline seen in the first quarter, while traffic from households earning more than $100,000 accelerated to high single-digit growth. That divide left the company leaning on episodic shopping around promotional events like Memorial Day and Back to School rather than steady week-to-week demand.
Footwear sales declined 1% even as Academy said it gained market share in the category, and inventory rose 4.4% year over year even though per-store units fell 5.6%. SG&A expenses crept up 20 basis points to 25.5% of sales as the company funded new stores and technology. Management’s own outlook carried the caution: CFO Carl Ford said fuel costs will stay elevated for the rest of the year, and CEO Steve Lawrence said the consumer backdrop will remain challenged in the back half. Academy also confirmed it has received all of its tariff refunds substantially already, meaning the 510 basis point margin tailwind that drove this quarter’s earnings beat will not repeat going forward.
Cheap Multiple, Crowded Bears
Hedge fund ownership of Academy slipped from 31 funds to 29 quarter over quarter, a modest pullback in institutional conviction. The stock trades at a forward price-to-earnings ratio of just 8.33, as of September 11, a multiple that assumes little in the way of future growth. Yet short interest sits at 23.30% of float, a level that reflects heavy organized skepticism even as the company just raised its earnings guidance. That combination suggests that the market is far more skeptical of Academy’s staying power than its own numbers currently justify.
What Comes After The Boost
Academy’s second quarter shows a company using a temporary tariff windfall to fund pricing and marketing while its lower-income customer base pulls back. The growth engines it is building, e-commerce, the loyalty and credit card relaunch, new store vintages, and category launches like HOKA and Redfield, are real, but they are unproven at replacing a margin tailwind that will not return. For the bulls, quarter-to-date trends improving to low single-digit comps through Labor Day would need to hold without tariff help behind them.
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