Sporting goods retailer Academy Sports & Outdoor (NASDAQ: ASO) missed Wall Street’s revenue expectations in Q4 CY2025 as sales rose 2.5% year on year to $1.72 billion. The company’s full-year revenue guidance of $6.27 billion at the midpoint came in 3% below analysts’ estimates. Its non-GAAP profit of $1.97 per share was 4% below analysts’ consensus estimates.
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Academy Sports (ASO) Q4 CY2025 Highlights:
- Revenue: $1.72 billion vs analyst estimates of $1.76 billion (2.5% year-on-year growth, 2.2% miss)
- Adjusted EPS: $1.97 vs analyst expectations of $2.05 (4% miss)
- Adjusted EBITDA: $202.6 million vs analyst estimates of $218.7 million (11.8% margin, 7.4% miss)
- Adjusted EPS guidance for the upcoming financial year 2026 is $6.35 at the midpoint, missing analyst estimates by 2.6%
- Operating Margin: 9.9%, in line with the same quarter last year
- Free Cash Flow Margin: 8.4%, up from 4.6% in the same quarter last year
- Locations: 322 at quarter end, up from 298 in the same quarter last year
- Same-Store Sales fell 1.6% year on year (-3% in the same quarter last year)
- Market Capitalization: $3.77 billion
"This past year marked an inflection point for Academy as we continued to gain market share and moved back to topline growth. During 2025, we put in place many foundational building blocks that helped drive sales and will continue to pay dividends in 2026 and beyond," said Steve Lawrence, Chief Executive Officer.
Company Overview
Founded in 1938 as a tire shop before expanding into fishing equipment, Academy Sports & Outdoor (NASDAQ: ASO) sells a broad selection of sporting goods but is still known for its outdoor activity merchandise.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $6.05 billion in revenue over the past 12 months, Academy Sports is a mid-sized retailer, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale.
As you can see below, Academy Sports’s revenue declined by 1.8% per year over the last three years despite opening new stores. This implies its underperformance was driven by lower sales at existing, established locations.
This quarter, Academy Sports’s revenue grew by 2.5% year on year to $1.72 billion, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 7.1% over the next 12 months, an acceleration versus the last three years. This projection is commendable and indicates its newer products will catalyze better top-line performance.
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Store Performance
Number of Stores
The number of stores a retailer operates is a critical driver of how quickly company-level sales can grow.
Academy Sports operated 322 locations in the latest quarter. It has opened new stores at a rapid clip over the last two years, averaging 6.7% annual growth, much faster than the broader consumer retail sector. This gives it a chance to become a large, scaled business over time.
When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.
Same-Store Sales
A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
Academy Sports’s demand has been shrinking over the last two years as its same-store sales have averaged 3.3% annual declines. This performance is concerning - it shows Academy Sports artificially boosts its revenue by building new stores. We’d like to see a company’s same-store sales rise before it takes on the costly, capital-intensive endeavor of expanding its store base.
In the latest quarter, Academy Sports’s same-store sales fell by 1.6% year on year. This decrease was an improvement from its historical levels. It’s always great to see a business’s demand trends improve.
Key Takeaways from Academy Sports’s Q4 Results
We enjoyed seeing Academy Sports beat analysts’ gross margin expectations this quarter. On the other hand, its EBITDA missed and its full-year revenue guidance fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 4.9% to $53.72 immediately following the results.
Academy Sports underperformed this quarter, but does that create an opportunity to invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
