Academy Sports Increases Store Opening Goal to 180 Locations Over the Next Five Years
Academy Sports + Outdoors chief executive officer Steve Lawrence told analysts during the company’s fourth-quarter earnings conference call on Thursday that the retailer is “fine-tuning” its forecast for new store openings.
Now, Lawrence said that Academy expects to open 160 to 180 stores over the next five years, with a target of 15 to 17 of them opening in 2024. This is up from the original plan issued last April which stated that the company would open 120 to 140 stores within five years time.
“[Last year] we opened 14 new stores, which is five more stores than we opened in 2022,” the CEO said. “The team is applying learnings for the prior year’s openings, and as a result, these stores are projected to have a higher year-one volume than the [stores opened in] 2022.”
Academy currently has 282 stores in 18 states. Among this updated store count are seven locations that opened during the fourth-quarter of 2023.
Coupled with this new store count, Academy is revising its first-year volume targets of the locations in newer markets where the company has less brand awareness. As such, Academy’s new store forecast for year-one sales volume is between $12 million to $16 million with a five-year ramp maturity. This is down from the original year-one volume target of $18 million.
“We’ve learned a lot over the past year, and as we move forward, we’ll continue to refine the tactics for us achieving our long-range goals,” Lawrence said. “We’ve done a deep dive on the 23 stores that we opened up in 2022 and 2023. We’re applying the lessons we’ve learned for our new store opening plans moving forward.”
“Moving forward, we’ll strive for a better balance each year with roughly half the new stores, being opened in existing markets, and the other half in new, or adjacent markets,” the CEO added. “It’s also important for us to balance our openings by time of year. We’ve learned that stores open in the first half of the year get out of the gate faster than stores that open up in Q3 and Q4. Based on this, starting in 2025 and forward, we’re building our new store pipeline to support roughly 50 percent of the stores for each year to open up in first and second quarters.”
Lawrence added that the company has seen “wins” and “strong results” in smaller and mid-sized markets. While these stores may have slightly lower volume potential, the favorable expense structure it takes to run these stores helps ensure the profitable investments, the CEO noted.
“As we move into 2025 and beyond, our goal will be to go into new markets with a greater density of new store openings around the same time,” he said.
These new plans come as the Katy, Texas-based retailer reported fourth-quarter and full year results on Thursday. For the full year, net sales fell 3.7 percent to $6.16 billion, down from $6.40 billion in 2022. Net income for fiscal 2023 was $519.2 million, down 17.3 percent from $628 million the year prior.
In the fourth-quarter, however, Academy made some gains with net sales in the period up 2.8 percent to $1.79 billion, up from $1.75 billion in Q4 2022. Net income in the quarter was $168.2 million, up 6.7 percent from $157.7 million the same time last year.
Looking ahead, Academy expects net sales between $6.07 billion and $6.35 billion for fiscal 2024, which ranges from a 1.5 percent loss to a 3 percent gain for the year. Diluted earnings per share for fiscal 2024 are expected to be between $5.90 and $6.90.