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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended January 31, 2026
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________.
Commission File No. 001-39589
Academy Sports and Outdoors, Inc.
(Exact name of registrant as specified in its charter)
Delaware |  | 85-1800912
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
1800 North Mason Road
Katy, Texas 77449
(Address of principal executive offices) (Zip Code)
(281) 646-5200
(Registrant’s Telephone Number, including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common Stock, par value $0.01 per share | ASO | The Nasdaq Stock Market LLC
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | Yes ☑ No ☐
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. | Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). | Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☑ |  | Accelerated filer ☐
| Non-accelerated filer ☐ |  | Smaller reporting company ☐
|  |  | Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The aggregate market value of the Common Stock held by non-affiliates of the registrant, based on the closing price of the Common Stock on the Nasdaq Stock Market LLC on August 1, 2025, the last business day of the registrant's most recently completed second fiscal quarter, was approximately $3.2 billion.
As of March 10, 2026, Academy Sports and Outdoors, Inc. had 64,383,459 shares of common stock, par value $0.01 per share, outstanding.
Documents Incorporated by Reference: Part III of this Annual Report on Form 10-K incorporates certain information from the registrant's definite proxy statement for its 2026 Annual Meeting of Stockholders, which shall be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, within 120 days of the registrant's fiscal year end.

ACADEMY SPORTS AND OUTDOORS, INC.
TABLE OF CONTENTS

| Page
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS | 3
PART I | 6
Item 1. Business | 6
Item 1A. Risk Factors | 14
Item 1B. Unresolved Staff Comments | 37
Item 1C. Cybersecurity | 38
Item 2. Properties | 40
Item 3. Legal Proceedings | 40
Item 4. Mine Safety Disclosures | 40
PART II | 41
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 41
Item 6. [Reserved] | 42
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations | 43
Item 7A. Quantitative and Qualitative Disclosures About Market Risk | 58
Item 8. Financial Statements and Supplementary Data | 58
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 58
Item 9A. Controls and Procedures | 59
Item 9B. Other Information | 61
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 62
PART III | 62
Item 10. Directors, Executive Officers and Corporate Governance | 62
Item 11. Executive Compensation | 62
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 63
Item 13. Certain Relationships and Related Transactions, and Director Independence | 63
Item 14. Principal Accountant Fees and Services | 63
PART IV | 64
Item 15. Exhibits and Financial Statements Schedules | 64
Item 16. Form 10-K Summary | 97
SIGNATURES | 102

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Annual Report”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. Forward-looking statements include all statements that are not historical facts, including statements reflecting our current views with respect to, among other things, our operations and financial performance. These forward-looking statements are included throughout this Annual Report, including in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in the section entitled “Risk Factors,” and relate to matters such as our industry, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. We have used the words “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” the negative version of these words or similar terms and phrases to identify forward-looking statements in this Annual Report.
The forward-looking statements contained in this Annual Report are based on management’s current expectations and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will result or be achieved. Actual results may differ materially from these expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. We believe that these factors include but are not limited to those described under the section entitled “Risk Factors” in this Annual Report, as such risk factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission, or SEC, and are accessible on the SEC's website at www.sec.gov.
Any forward-looking statement made by us in this Annual Report speaks only as of the date of this Annual Report and are expressly qualified in their entirety by the cautionary statements included in this Annual Report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments or other strategic transactions we may make. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.
BASIS OF PRESENTATION
All references to “Academy”, “we”, “us,” “our” or the “Company” in this Annual Report and the accompanying financial statements refer to Academy Sports and Outdoors, Inc., a Delaware corporation (“ASO, Inc.”) and the current parent holding company of our operations, and its consolidated subsidiaries. We conduct our operations primarily through our parent holding company's indirect subsidiary, Academy, Ltd., a Texas limited partnership doing business as “Academy Sports + Outdoors”, or Academy, Ltd. All of the Company’s sales and business operations occur at Academy, Ltd., and Academy, Ltd. is also the borrower and/or issuer of the Company’s long-term debt and lessee of facilities.
We operate on a retail fiscal calendar pursuant to which our fiscal year consists of 52 or 53 weeks, ending on the Saturday closest to January 31 (which such Saturday may occur on a date following January 31) each year. References to any year, quarter, or month mean our fiscal year, fiscal quarter, and fiscal month, respectively, unless the context requires otherwise. References to “2022” “2023,” “2024,” and “2025” relate to our fiscal years ended January 28, 2023, February 3, 2024, February 1, 2025, and January 31, 2026, respectively, unless the context requires otherwise.
Numerical figures included in this Annual Report have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.
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RISK FACTORS SUMMARY
Investing in our securities involves a high degree of risk. The following is a summary of the principal factors that make an investment in our securities speculative or risky, all of which are more fully described below in the section entitled “Risk Factors.” In addition to the following summary, you should consider the information set forth in the “Risk Factors” section and the other information contained in this Annual Report before investing in our securities.
Risks Related to Our Business and Industry
•overall decline in the health of the economy and consumer discretionary spending;
•risks associated with our reliance on internationally manufactured merchandise which exposes us to various international risks, including additional tariffs;
•our ability to operate, update or implement our information systems;
•our ability to manage our use of machine learning and other types of artificial intelligence in our business;
•our ability to manage our inventory balances;
•our ability to predict or effectively react to changes in consumer tastes and preferences, and/or to acquire and sell brand name merchandise at competitive prices;
•risks associated with our e-commerce business;
•our ability to safeguard sensitive or confidential data relating to us and our customers, team members and vendors;
•intense competition in the sporting goods and outdoor recreation retail industries;
•risks associated with disruptions in our supply chain;
•our ability to successfully continue our store growth plans or manage our growth effectively, or any failure of our new stores to generate sales and/or achieve profitability;
•the effectiveness of our marketing and advertising programs;
•our ability to attract, train and retain quality team members in sufficient numbers, increases in wage and labor costs, and changes in laws and other labor issues;
•our ability to protect against inventory shrink;
•payment-related risks;
•the occurrence of severe weather events, catastrophic health events, natural or man-made disasters, social and political conditions or civil unrest;
•the geographic concentration of our stores;
•fluctuations in merchandise (including raw materials) costs and availability;
•any disruption in the operation of our distribution centers;
•our reliance on key personnel (including our executive officers) to support our existing business and future initiatives;
•our reliance on suppliers to supply us with merchandise that we purchase for resale;
•risks related to our private label brand merchandise;
•any failure of our third-party vendors of outsourced business services and solutions;
•harm to our reputation;
•quarterly and seasonal fluctuations in our operating results; and
•our ability to successfully pursue strategic acquisitions and integrate acquired businesses.
Legal and Regulatory Risks
•our ability to comply with laws and regulations affecting our business, including those relating to the sale, manufacture and import of consumer products;
•claims, demands and lawsuits to which we are, and may in the future, be subject;
•our insurance or indemnities coverage may be insufficient;
•risks related to product safety; and
•our ability to protect our intellectual property and avoid the infringement of third-party intellectual property rights.
Risks Related to Our Indebtedness
•our level of indebtedness and related debt service payments and our ability to generate sufficient cash flow to satisfy all of our obligations under our indebtedness;
•our ability to incur substantially more debt;
•our ability to generate sufficient cash to service all of our indebtedness;
•restrictions on our current and future operations imposed by the terms of our indebtedness;
•our variable rate indebtedness subjects us to interest rate risk;
•our ability to borrow under the ABL Facility (as defined below); and
•our level of indebtedness may hinder our ability to negotiate favorable terms with our vendors.
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Risks Related to the Ownership of Our Common Stock
•our stock price is volatile or may decline;
•our ability or decision to pay dividends on our common stock or conduct stock repurchases;
•anti-takeover provisions in our organizational documents could delay or prevent a change of control;
•our exclusive forum provision; and
•you may be diluted by any future issuances of shares by us.
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PART I
Item 1. Business
The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes included elsewhere in this Annual Report for the fiscal year ended January 31, 2026. This discussion contains forward-looking statements that involve risks and uncertainties. See the section of this Annual Report entitled “Cautionary Statement Regarding Forward-Looking Statements.” When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that characterize our business. Known material factors that could affect our financial performance and actual results, and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this discussion or otherwise made by our management, are described in the “Risk Factors” section of this Annual Report.
Who We Are
Academy Sports + Outdoors is a leading full-line sporting goods and outdoor recreation retailer in the United States. Originally founded in 1938 as a family business in Texas, we now operate 322 stores across 21 contiguous states as of January 31, 2026. Our mission is to provide “Fun for All” and we fulfill this mission with a localized merchandising strategy and value proposition that deeply connect with a broad range of consumers. Our product assortment focuses on key categories of outdoor, sports & recreation, apparel, and footwear (representing 31%, 22%, 27% and 20% of our 2025 net sales, respectively) through both leading national brands and a portfolio of 19 private label brands, which go well beyond traditional sporting goods and apparel offerings.
We believe the following attributes differentiate us from our competitors:
•Value-based assortment that enables our customers to participate and have fun, no matter their budget.
•Broad assortment that extends beyond sporting goods and apparel to outdoor recreation and is localized for individual stores.
•Emerging, growing and profitable omnichannel strategy that leverages our buy-online-pickup-in-store program (“BOPIS”) and shipping fulfillment capabilities.
•Strong customer loyalty, with opportunities to increase penetration in existing markets.
•Regional focus primarily in the southern United States with a growing presence in some of the fastest-growing Metropolitan Statistical Areas (or “MSAs”).
•Core customers comprising active families that we support with one-stop shop convenience.
•Significant whitespace opportunity for new stores for both existing and adjacent geographies and new markets.
We believe we sit in a sweet-spot of consumer demand, offering a broad, value-based assortment of sporting goods and outdoor recreation products, so our customers can participate and have fun, no matter their budget. We carefully curate our products to provide the right assortment that appeals to customers from beginners to experts, including families and casual participants.
Our access to national brand and private label brand merchandise creates a comprehensive portfolio of value-based and diversified products, spanning various price-points, that differentiates our assortment from our peers. Our category, brand and price-point mix is unique to Academy and difficult to replicate at other retailers. Approximately 78% of our 2025 merchandise sales was comprised of national brand products, with the remainder coming from exclusive products in our portfolio of private label brands. No single brand we carry accounted for more than approximately 12% of our 2025 sales.
We endeavor to offer products for customers of all ages, incomes and aspirations across sporting and outdoor recreation activities, seasons and experience levels. As such, we have a balanced, year-round business and a large customer base. Our average customer visits our stores anywhere fr o m two to three times per year.
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Merchandising
Our merchandise consists of a full range of industry-leading national brands and strong private brands providing our customers with diversified product categories of good, better, and best price points. We deliver Academy’s unique product assortment through our strong partnerships with our vendors. In 2025, we purchased merchandise from approximately 1,500 vendors. For 2025, 2024 and 2023 no vendor represented more than 12% of our total purchases. Our relationships with key brands, on-trend private brands, and exclusive product offerings differentiates our assortment from our peers.
We have preferred access to hundred s of well-recognized national brands, such as Nike, including its Jordan Brand, Under Armour, adidas, Win chester, Columbia Sportswear, The North Face, Brooks, Skechers, Yeti, Stanley and Carhartt, which are critical to our market penetration. These and some of our other national brands rely on us to broaden their consumer reach, which fosters a mutually beneficial relationship when it comes to pricing and assortment. We play a critical role in delivering customer volume for these brands. We complement our national brand assortment with our private label brand assortment, which is priced below the national brand price spectrum. As such, we receive favorable product allocations from leading suppliers.
Our private label brand portfolio consists of 19 brands, including Magellan Outdoors, Academy Sports + Outdoors, BCG, O'rageous, Game Winner, Outdoor Gourmet, Freely, Redfield, H2OX, and R.O.W. Our private label brand strategy focuses on in-filling categories and price points that our national brand products may not satisfy. Our private label brand offerings support and complement our overall merchandising strategy due to limited price-point overlap with national brands. Additionally, our private label brands generate strong brand equity and drive significant customer loyalty. Approximately 53% of our customers purchased a private label brand from us in 2025 and approximately 22% of our 2025 merchandise sales was comprised of private brand products.
As of January 31, 2026, we generally organized our merchandise in four divisions made up of sixteen categories as follows:

Division | Category | Primary product types
Outdoors | Camping | Coolers and drinkware, camping accessories, camping equipment, watersports and equipment
| Fishing | Marine equipment and fishing rods, reels, baits and equipment
| Hunting | Firearms, ammunition, archery and archery equipment, camouflage apparel, waders, shooting accessories, gun safes, optics, airguns and hunting equipment
Sports and Recreation | Fitness | Fitness equipment, fitness accessories and nutrition supplies
| Team sports | Team and specialty sports equipment, including baseball, football, basketball, soccer, golf, racket sports, volleyball, backpacks and sports bags
| Recreation | Patio furniture, outdoor cooking, wheeled goods (bicycles, skateboards and other ride-on toys), trampolines and play sets
| Front end | Sunglasses and front-end (consumables, batteries, etc.), electronics and watches
Apparel | Outdoor and seasonal apparel | Outdoor apparel, denim, work apparel, graphic t-shirts, accessories and outerwear
| Youth apparel/Swim | Boys and girls outdoor and athletic apparel and swimwear
| Athletic apparel | Sporting apparel and apparel for fitness
| Licensed apparel | Professional and collegiate team licensed apparel and accessories
Footwear | Casual and seasonal footwear | Casual shoes, slippers, seasonal footwear and socks
| Work footwear | Work and western boots, shoes and hunting footwear
| Youth footwear | Boys and girls footwear
| Athletic footwear | Running shoes, athletic lifestyle and training shoes
| Team sports footwear | Team and specialty sports footwear and slides

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The following table sets forth the approximate amount of sales (all of which are based in the U.S.) by merchandise divisions for the periods presented (amounts in thousands):

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Merchandise sales (1) |  |  |  |  |  |
Outdoors |  | $ | 1,831,038 |  |  | $ | 1,809,653 |  |  | $ | 1,807,664 |
Sports and recreation |  | 1,339,608 |  |  | 1,293,135 |  |  | 1,376,777 |
Apparel |  | 1,645,642 |  |  | 1,606,333 |  |  | 1,705,791 |
Footwear |  | 1,201,545 |  |  | 1,187,606 |  |  | 1,235,644 |
Total merchandise sales (2) |  | 6,017,833 |  |  | 5,896,727 |  |  | 6,125,876 |
Other sales (3) |  | 35,581 |  |  | 36,723 |  |  | 33,415 |
Net sales |  | $ | 6,053,414 |  |  | $ | 5,933,450 |  |  | $ | 6,159,291 |

(1)Certain products and categories were recategorized in the current fiscal year amongst various categories and divisions, respectively, to better align with our current merchandising strategy and view of the business. As a result, we have reclassified sales between divisions for 2024 and 2023 for comparability purposes. This reclassification is in divisional presentation only and did not impact the overall net sales balances previously disclosed.
(2)E-commerce sales represented 11.7%, 10.5% and 10.7% of merchandise sales for 2025, 2024 and 2023, respectively.
(3) Other sales consisted primarily of gift card breakage income, credit card bounties and royalties, shipping income, sales return allowance and other items.
Stores
Our stores, all of which are based in the U.S., are designed to provide our customers with an easy-in, easy-out shopping experience. The interior of most of our stores are built around a central “racetrack” aisle that allows customers to efficiently navigate our selling floor. Additionally, our stores generally have consistent store layouts providing our customers familiarity across our entire store base. We seek to offer our customers a strong merchandise assortment and a localized customer experience, which is facilitated by various types of merchandise fixtures and our large selling floor. Our central “racetrack” aisle and adjacent end-cap merchandising space allows us to adjust our inventory presentations throughout our various selling seasons.
Our stores average approximately 70,000 gross square feet, of which approximately 85% is dedicated to selling space. Our store locations are typically positioned adjacent to major highways or thoroughfares, allowing customers to easily locate our stores. We seek to position our stores in areas with certain population densities, demographics and other characteristics to maximize sales. These markets consist of metropolitan, suburban and smaller cities. Additionally, our stores are typically placed in retail centers adjacent to co-tenants who drive significant traffic. At this time, no stores are connected to malls. We seek to lease all of our stores in long-term lease agreements with third-party landlords, which typically range from 15 to 20 years with various renewal options and lease escalation structures. Of the 322 stores operated as of January 31, 2026, 321 are leased from third parties and one store is owned by the Company.
We are active members of the communities in which we operate, and our long-time customers have grown up with Academy and have passed their passion for us on to the next generation, enabling us to benefit from strong customer loyalty and shopping frequency.
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As of January 31, 2026, the number of stores that we operated, exclusively in the U.S., by state was as follows:

State |  | Number of Stores
Texas |  | 117
Georgia |  | 22
Florida |  | 21
Louisiana |  | 18
North Carolina |  | 18
Alabama |  | 17
Tennessee |  | 15
Oklahoma |  | 13
Missouri |  | 12
South Carolina |  | 10
Arkansas |  | 10
Mississippi |  | 10
Indiana |  | 10
Kansas |  | 6
Kentucky |  | 6
Virginia |  | 5
Illinois |  | 3
West Virginia |  | 3
Ohio |  | 3
Pennsylvania |  | 2
Maryland |  | 1
|  | 322

We believe our real estate strategy has positioned us well for further expansion, and our track record has demonstrated that we can open and operate stores profitably. We believe there is significant near-term opportunity for expansion in both new and existing markets.
Marketing
Our marketing approach is anchored in helping Always Game Families have fun in their pursuit of sports and outdoors activities. The strategy is designed to generate awareness and consideration for the Academy brand while improving intent to purchase across our broad selection of fun categories of top national and private brands at a compelling value within our assortment. We analyze first-party data from across our customer data ecosystem, inclusive of our data lake for analysis/model-building and our Customer Data Platform for audience creation and activation. We combine insights from our customer data ecosystem with customer research studies and retail industry market share data sources to develop annual and seasonal go-to-market strategies that lead to the creation of engaging content and customer experiences that are communicated across a diverse range of owned and paid media channels.
Furthermore, using data from our data lake, we leverage our Customer Data Platform to generate first-party data audiences for targeted customer lifecycle management campaigns designed to retain current customers and encourage omnichannel shopping behaviors. First-party data is also used to inform creation of third-party data audiences across a mix of media channels to drive engagement and acquisition of new customers through the use of brand design, influencer and customer created content. These campaigns are executed across a blend of digital and traditional media, including paid search, email, text message, mobile app, digital advertising networks, affiliates, and social media along with linear and digital video, audio, print, outdoor and direct mail.
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We are focused on implementing and continually improving our customer centric marketing technologies, omnichannel services and experiences to save customers time and money while improving the long-term health of our customer portfolio. In July 2024, we launched our loyalty platform, myAcademy Rewards, which provides us a powerful tool to build a deeper connection and understanding of our customers. The Academy Credit Card program, myAcademy Rewards, and Academy Sports + Outdoors app are foundational to build loyalty among customers while providing a seamless omnichannel shopping experience.
We are committed to making a positive impact on the communities we serve and partner with over 523 organizations, including youth sports leagues that reach approximately 1.1 million participants. We also partner with school districts, professional sports properties, local parks, hunting and fishing organizations, military bases and local first responders.
Distribution Centers
We operate three distribution centers in Katy, Texas; Twiggs County, Georgia; and Cookeville, Tennessee. The distribution centers receive and store products from vendors and use sophisticated sorting and logistical equipment to fill the product needs of the retail store locations they serve, as well as to fulfill e-commerce orders from customers. Our distribution centers are leased under long-term agreements. Third-party trucking companies are used to disburse inventory from the distribution centers to and from our stores. These distribution centers are strategically located throughout our footprint to efficiently serve our retail locations and have the capacity to service up to approximately 150 stores per distribution center.
Competition
The retail sporting goods and outdoor industry is highly competitive based on many variables including price, product assortment, customer service, omnichannel experience and store locations. We compete with mass merchants, department stores, large format sporting goods and outdoor stores, traditional sporting goods and outdoor stores, specialty retailers, and online retailers. We seek to attract a broad range of consumers by providing sporting goods and outdoor recreation products that appeal to customers of all experience levels, including families and casual participants. We differentiate ourselves from our competitors by providing a value-based assortment through both leading national brands and our private label brands. For additional information related to our competitors, see the risk factors herein in “Item 1A. Risk Factors”.
Information Systems
Our information systems are critical to our day-to-day operations as well as to our long-term growth strategies. Our technology is integrated across multiple functions throughout the organization, providing the data analysis, automation and solutions necessary to support our communications, inventory and supply chain management, store operations, distribution, point-of-sale, e-commerce, customer, financial reporting and accounting functions. Our technology is the foundation of our merchandising and marketing functions; it processes our customers’ orders and integrates our e-commerce sales with stores. We are leveraging our data to make more informed decisions around inventory, marketing, store-level operations, and customer engagement. We have agreements with third parties to provide hosting services and administrative support for portions of our infrastructure, and utilize cloud-based systems in addition to those hosted on premises.
Seasonality
Our business is subject to seasonal fluctuations. A significant portion of our net sales and profits is driven by summer holidays, such as Memorial Day, Father’s Day and Independence Day, during the second quarter. Our net sales and profits are also impacted by the July/August back-to-school selling season during the second and third quarters, the November/December holiday selling season, and in part by the sales of cold weather sporting goods and apparel during the fourth quarter.
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Our Team Members
Our missi on is to provide “Fun for All” and a critical component to our success is our people. As of January 31, 2026, we employed approximately 23,000 team members in the U.S. and Hong Kong. Of those team members, approximately 45% were full-time and 55% were part-time. Our employment levels may fluctuate over the course of the year due to the seasonality of our business. None of our team members are covered by collective bargaining agreements. The Company believes that it has a good working relationship with its team members.
Culture and Core Values. We strive to provide rewarding careers, benefits, and a workplace culture where team members are empowered to be their authentic self—drawing on their unique perspectives, passions, skills, interests, and experiences in their day-to-day jobs. Our core values establish a strong foundation for our culture and represent the key expectations we have of our team members. These include the following:
•Customer focus and service
•Excellence in all we do
•Responsible leadership
•Initiative with urgency
•Students of the business
•Integrity always
•Positive impact on our communities
Talent Management. We believe the best way to serve our customers is to invest in top talent, be open to innovation, and have the vision to succeed. We are focused on creating a winning team by recruiting and retaining great people, promoting teamwork, and fostering an enjoyable and rewarding work environment. We also strive to provide all team members with opportunities for personal growth, cross-functional training, job opportunities and career advancement. We offer a mix of instructor-led, online, and blended courses in several key areas, including Career Development and Leadership Development. Our wide variety of courses ranges from job specific (i.e., functional) to broad-based leadership training to safety, security, ethics, and compliance training. We also engage in regular and ongoing feedback, annual performance reviews and annual talent calibration conversations. Succession planning is conducted on an annual basis to identify suitable internal candidates for key positions within the Company.
Compensation and Benefits. In addition to offering competitive compensation, we offer comprehensive benefits to eligible team members. Our benefits include, but are not limited to: medical, dental, and vision insurance; participation in the Company’s 401(k) retirement savings plan with a Company match; participation in the Company’s Employee Stock Purchase Plan; paid time off; professional and educational reimbursement programs; medical, family, and bereavement leave; life, legal, pet, and accident insurance; paid parental leave; and a team member discount.
Workplace, Health and Safety. The health and safety of our customers, team members, and communities is our top priority. We strive to ensure that a safe and hygienic working environment is provided and that occupational health and safety practices which prevent accidents and injury are promoted. Throughout our stores, distribution centers, and corporate headquarters, we employ policies, procedures, and training to promote safe and healthy work environments.
Our team member handbook outlines safety expectations, but we also empower our team members with knowledge and skills from various safety training courses during the onboarding process and on an ongoing basis through our learning engagement system with topics such as incident reporting, evacuation, active shooter response, hazardous materials, and heat safety. We continue to focus on developing and driving our safety-first culture through awareness, training, and actions to reduce the frequency and severity of safety incidents.
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Information about our Executive Officers
Below is a list of our executive officers, their respective ages as of March 17, 2026 and a brief account of the business experience of each of them.

Name |  | Age |  | Position
Steven (Steve) P. Lawrence |  | 58 |  |  | Chief Executive Officer
Samuel (Sam) J. Johnson |  | 59 |  |  | President
Earl Carlton (Carl) Ford IV |  | 48 |  |  | Executive Vice President and Chief Financial Officer
Matthew (Matt) M. McCabe |  | 55 |  |  | Executive Vice President and Chief Merchandising Officer

Steven (Steve) P. Lawrence has served as Chief Executive Officer and on the Board of Directors since June 2023. Mr. Lawrence joined the Company in February 2019 as Executive Vice President and Chief Merchandising Officer. Prior to joining the Company, Mr. Lawrence was President, Chief Executive Officer and served on the board of directors at francesca’s from October 2016 to January 2019. From May 2012 to September 2016, he served as Chief Merchandising Officer at Stage Stores. Mr. Lawrence also spent nearly 12 years working in various merchandising leadership roles at J.C. Penney after 10 years at Foley’s/May Co. Mr. Lawrence obtained his Bachelor of Business Administration in Finance from the University of Notre Dame.
Samuel (Sam) J. Johnson has served as President since October 2023. Mr. Johnson joined the Company in April 2017 as Executive Vice President, Retail Operations. Prior to joining the Company, Mr. Johnson spent seven years with hhgregg, Inc., where he most recently served as Chief Retail Officer. While a t hhgregg, Inc., he led functions including store operations, customer relations, commercial sales, real estate and visual merchandising. Prior to hhgregg, Inc., he spent more than 20 years in various leadership roles with Sears Holdings Corporation, including Vice President of Small Stores.
Earl Carlton (Carl) Ford IV has served as Executive Vice President and Chief Financial Officer since July 2023. Mr. Ford joined the Company in January 2019, and served as the Senior Vice President, Finance, where he led the Financial Planning and Analysis function of the Company from January 2019 to July 2023 and the Loss Prevention and Inventory Control teams from February 2020 to July 2023. Prior to joining the Company, Mr. Ford served as the Vice President of Financial Planning & Analysis at Belk, Inc. He also served as the Vice President of Internal Audit and held other leadership roles in accounting and treasury during his 15 years at Belk, Inc. Prior to joining Belk, Inc., Mr. Ford worked for Deloitte & Touche in their Audit practice. Mr. Ford holds a Master's Degree in Accounting from the University of Alabama, a Bachelor's Degree in Accounting from the University of Southern Mississippi and is an active Certified Public Accountant.
Matthew (Matt) McCabe has served as the Executive Vice President and Chief Merchandising Officer since June 2023. Mr. McCabe joined the Company in December 2016 as the Vice President, Divisional Merchandise Manager of Athletic and Licensed Apparel and served as the Senior Vice President, General Merchandise Manager of Footwear from September 2017 to June 2023. In this role, he was responsible for setting the merchandising objectives and business strategy for the Footwear division. Prior to joining the Company, Mr. McCabe served as Vice President at Golfsmith International, where he led the apparel, footwear and soft consumables buying and private brand businesses. He has more than 25 years of experience in men's and women's apparel and footwear, and held various leadership roles at The Bon Ton Department Stores, Bachrach, Sears & Roebuck Co., and Mark Shale. Mr. McCabe holds a Bachelor of Science from Miami University.
Intellectual Property
Our trademarks, service marks, copyrights, patents, processes, trade secrets, domain names and other intellectual property, including our Academy Sports + Outdoors brand, our private label brands, such as Academy Sports + Outdoors, Magellan Outdoors, BCG, O’rageous, Game Winner, Outdoor Gourmet, Freely, R.O.W., Redfield, and H2OX, and our designs, names, slogans, images and trade dress associated with these brands, are valuable assets that are critical to our success.
We also enter into intellectual property agreements whereby the Company receives the right to use third-party owned trademarks typically in exchange for royalties. These agreements typically contain a one to three-year term and contractual payment amounts required to be paid by the Company.
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Governmental Regulations
We operate in a complex regulatory and legal environment that exposes us to regulatory, compliance and litigation risks that could materially affect our operations and financial results. Specifically, we are subject to regulation by numerous federal, state and local regulatory agencies and authorities, including the U.S. Consumer Product Safety Commission, Equal Employment Opportunity Commission, Department of Labor, Occupational Safety and Health Administration, Department of Justice, Department of Treasury, Federal Trade Commission, Customs and Border Protection, Bureau of Alcohol, Tobacco, Firearms and Explosives, SEC, Internal Revenue Service, or IRS, and Environmental Protection Agency and comparable state and local agencies.
Laws and regulations affecting our business may change, sometimes frequently and significantly, as a result of political, economic, social or other events. Some of the federal, state or local laws and regulations that affect us include but are not limited to:
•consumer product safety, product liability or consumer protection laws;
•laws related to advertising, marketing, pricing and selling our products, including but not limited to firearms, ammunition, and related accessories;
•labor and employment laws, including wage and hour laws and forced labor prevention laws;
•tax laws or interpretations thereof, including collection of state sales tax on e-commerce sales;
•data protection and privacy laws and regulations;
•environmental laws and regulations;
•hazardous material laws and regulations;
•customs or import and export laws and regulations, including collection of tariffs on product imports;
•intellectual property laws;
•antitrust and competition regulations;
•banking and anti-money laundering regulations;
•Americans with Disabilities Act, or ADA, and similar state and local laws and regulations;
•website design and content regulations;
•U.S. Foreign Corrupt Practices Act, or FCPA and other anti-corruption laws; and
•securities and exchange laws and regulations.
We are a federally licensed firearms dealer, and we sell firearms, ammunition, and related accessories, including suppressors. Firearms represented approximately 6% of our net sales in 2025. Numerous federal, state and local laws and regulations govern the procurement, transportation, storage, distribution and sale and marketing of firearms, ammunition, and related accessories, including the regulations governing the performance of federally and state mandated procedures for determining customer firearm purchase eligibility (such as age and residency verification, background checks and proper completion of required paperwork). In June 2021, the United States Department of Justice announced a policy emphasizing “zero tolerance” for willful violations of the law by federally licensed firearms dealers; in 2025 that policy was repealed. Federal, state, and local agencies continue to regulate and enforce compliance requirements applicable to firearms dealers. In the future, there may be increased federal, state or local regulation and enforcement affecting the sale of firearms, ammunition, and related accessories, including taxation or restrictions on the type of firearms, ammunition, and accessories available for retail sale, which could reduce our sales and profitability.
For additional information, see the risk factors herein in “Item 1A. Risk Factors” under the sub-caption “Legal and Regulatory Risks”.
Available Information
Our website address is www.academy.com. We use our website as a channel of distribution for company information. We will make available free of charge on the Investor Relations section of our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act. We will also make available through our website other reports filed with or furnished to the SEC under the Exchange Act, including our proxy statements and reports filed by officers and directors under Section 16(a) of the Exchange Act, as well as our Ethics and Code of Conduct Policy. Financial and other material information regarding the Company is routinely posted on our website and is readily accessible. We do not intend for information contained on our website to be part of this Annual Report on Form 10-K.
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Item 1A. Risk Factors
Investing in our securities involves a high degree of risk. In addition to the other information contained in this Annual Report, you should consider the following risk factors before investing in our securities. Risks in this section are grouped in the following categories: (1) Risks Related to Our Business and Industry; (2) Legal and Regulatory Risks; (3) Risks Related to Our Indebtedness; and (4) Risks Related to the Ownership of Our Common Stock. Many risks affect more than one category, and the risks are not in order of significance or probability of occurrence because they have been grouped by categories.
Risks Related to Our Business and Industry
Our results of operations are highly dependent on the U.S. economy and U.S. consumer discretionary spending and an economic and financial downturn may cause a decline in U.S. consumer discretionary spending and may adversely affect our business, operations, liquidity, capital resources and financial results.
Our results of operations are affected by the relative condition of the U.S. economy. All of our sales are generated within the United States, making our results of operations highly dependent on the U.S. economy and U.S. consumer discretionary spending. A decline in discretionary spending by U.S. consumers could negatively affect our business and results of operations.
The general conditions that affect U.S. consumer discretionary spending in our markets include:
•health of the economy;
•consumer confidence in the economy;
•wages, jobs and unemployment trends;
•political or social unrest, global hostilities, trade disputes, labor shortages, and other disruptions to the supply chain;
•public health events (such as pandemics and epidemics) and their effect on our customers, team members, vendors/suppliers and other stakeholders;
•consumer credit availability;
•consumer debt levels;
•changes to raw material and commodity prices;
•interest rates and inflation;
•tax rates and tax policy;
•immigration policy;
•import and customs duties/tariffs and policy;
•impact of natural or man-made disasters;
•legislation and regulations;
•the housing market, including real estate prices and mortgage rates;
•gasoline and fuel prices; and
•national and international security and safety concerns.
Increasing volatility in financial markets may cause some of the aforementioned conditions to change with even greater degree of frequency and magnitude.
Our comparable sales, net sales per square foot, customer traffic or average value per transaction may be adversely affected if, for example, our customers reduce their purchases with us due to inflationary pressures, job losses, foreclosures, bankruptcies, higher consumer debt and interest rates, higher taxes, reduced access to credit, falling home prices and lower consumer confidence. A reduction in overall consumer spending which causes customers to shift their spending to products other than those sold by us or to products sold by us that are less profitable could result in lower net sales, decreases in inventory turnover or a reduction in profitability due to lower margins, which could make it more difficult for us to generate cash flow sufficient to satisfy our obligations under our indebtedness. A prolonged period of depressed consumer spending could have a material adverse effect on our business.
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Additionally, if the U.S. or global economy experiences a crisis or downturn, including any capital markets volatility or government intervention in the financial markets, or if the U.S. or global economy experiences a prolonged period of decelerating or negative growth, then our liquidity, capital resources or results of operations could be materially and adversely impacted. For example, although we typically generate funds from our operations to pay our operating expenses and fund our capital expenditures, our ability to continue to meet these cash requirements over the long-term may require access to additional sources of funds, including our ABL Facility, incremental term loan facilities and the equity and debt capital markets. Adverse financial and economic conditions, including as a result of increases in interest rates, may adversely affect our ability to draw on our ABL Facility, the ability of banks to honor draws on our ABL Facility or our ability to obtain incremental term loan facilities or access the equity and debt capital markets. In addition, adverse economic conditions could adversely affect our suppliers’ access to the capital and liquidity required to maintain their inventory, production levels, timeliness and product quality and to operate their businesses, which could adversely affect our supply chain, or could reduce our suppliers’ offerings of trade credit, customer incentives, vendor allowances, cooperative marketing expenditures and product promotions, which could adversely affect our results of operations. Adverse economic conditions could also make it difficult for both us and our suppliers to accurately forecast future product demand trends, which could cause us to carry too much or too little merchandise in various product categories or could adversely affect our landlords and real estate developers of retail space, which may limit the availability of attractive leased store locations. The potential ongoing effects of an economic and financial crisis are difficult to forecast and mitigate. We may experience difficulties in operating and growing our operations to react to a U.S. or global financial or economic crisis or downturn. We may be unable, in such cases, to predict how robust a recovery of the U.S. or global economy will be or whether or not it will be sustained.
A significant portion of the merchandise that we sell is manufactured in foreign countries which exposes us to various international risks, including additional tariffs, that could have a material adverse effect on our business and results of operations.
A significant portion of the merchandise that we sell, including merchandise we purchase from domestic suppliers and much of our private label brand merchandise, is manufactured in countries such as China, Bangladesh, Vietnam, Cambodia, and Brazil. Foreign imports subject us to the risks of changes in tariffs and duties, quotas, loss of “most favored nation” status with the United States for a particular foreign country, delays in shipment, shipping port and ocean carrier constraints, supply and demand constraints, labor strikes, work stoppages, supply chain disruptions including those caused by extreme weather, natural disasters, public health events (such as pandemics) or other disruptions, freight cost increases and economic uncertainties (including the United States imposing anti-dumping or countervailing duty orders, tariffs, safeguards, remedies or compensation and retaliation due to illegal foreign trade practices). To the extent that any foreign manufacturers from whom we purchase products directly or indirectly employ labor, environmental, corruption, workplace safety, or other business practices that vary from those commonly accepted in the United States, we could be hurt by any resulting negative publicity or, in some cases, potential claims of liability. For example, in late 2021, the United States government enacted the Uyghur Forced Labor Prevention Act (“UFLPA”), which presumes goods produced in the Xinjiang Uyghur Autonomous Region of China, or with labor linked to specified Chinese government-sponsored labor programs, were produced using forced labor and prohibits importation of such goods into the United States absent clear and convincing evidence proving otherwise. Compliance with the UFLPA has become increasingly complex and the UFLPA Entity List has expanded, with additional industries and materials designated as high-priority sectors for enforcement. As a result, we may experience shipment delays, seizures, supply disruptions, increased compliance and documentation costs, or the need to source alternative suppliers, any of which could have a material adverse effect on our business, financial condition, and results of operations. Merchandise or raw materials purchased from alternative sources may be of lesser quality or more expensive than the merchandise or raw materials we currently purchase.
These trade-related risks are heightened by the evolving, frequent, and unpredictable nature of global trade policies, including the use of executive authority to impose, modify, suspend or expand tariffs and other trade restrictions. Such actions may be implemented with limited advance notice and may apply to a broad range of countries, materials, and products, including steel, aluminum, and other derivative products, and may be subject to retaliation by affected countries. As a result, we may be unable to timely adjust our sourcing, pricing, or operational strategies to mitigate the impacts of such changes, which could materially increase our costs and adversely affect our margins, results of operations, and financial condition.
The political, health, safety, security, and economic environments of the countries in which we or our vendors obtain merchandise or raw materials have the potential to materially affect our operations. In the event of disruptions or delays in supply due to economic, political, health, safety or security conditions in foreign countries or their relations with the United States, such disruptions or delays could adversely affect our results of operations unless and until alternative supply arrangements could be made. For example, we have experienced, and may continue to experience, disruptions resulting from public health events, significant changes in trade policy, labor shortages, geopolitical tensions, and constraints within global transportation and logistics networks, any of which may result in increased costs, delays, or reduced availability of merchandise. The imposition of trade tariffs, sanctions
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or other regulations against merchandise imported by us, or the loss of “normal trade relations” status with the countries in which we or our vendors obtain merchandise or raw materials, could significantly increase our cost of products imported into the United States and harm our business. The continuation or escalation of global trade tensions could have further adverse effects on our sales and profitability, results of operations and financial condition. Additionally, the prices charged for the merchandise that we purchase by foreign manufacturers may be affected by the fluctuation of their local currency against the U.S. dollar.
In addition, the federal government periodically considers other restrictions on the importation of products obtained by our vendors and us. If the United States were to withdraw from or materially modify any international trade agreements to which it is a party, or if tariffs were raised on the foreign-sourced goods that we sell, or if border taxes were implemented, then the goods we import may become more expensive or may no longer be available at a commercially attractive price or at all, each of which in turn could have a material adverse effect on our business, financial condition and results of operations.
In addition, the increases in the costs of labor and other costs of doing business in China could significantly increase our costs to produce our merchandise and could have a negative impact on our net sales, operating income and net income. Factors that could negatively affect our business include a potential significant revaluation of the Chinese Yuan, which may result in an increase in the cost of producing products in China, labor shortages and increases in labor costs in China, and difficulties in moving products manufactured in China through the ports on the western coast of North America, whether due to port congestion, labor disputes, product regulations and/or inspections or other factors, and natural disasters or health pandemics impacting China.
Problems with operating, updating or implementing our information systems could disrupt our operations and negatively impact our business operations and materially and adversely affect our financial results.
The efficient operation of our business is dependent on the successful integration and operation of our information systems, some of which require interoperability to perform the intended function or are dependent on services managed or provided by third-parties. For example, we rely on our information systems to manage merchandise planning and replenishment, warehousing and distribution, store operations, customer relationships, e-commerce, and customer transactions, optimize our overall inventory levels, process financial information and sales transactions, pay and receive funds, prevent security breaches and fraud, communicate internally and externally, provide support services, and comply with legal and regulatory obligations.
Our information systems, if not functioning properly or if failing to function altogether, could disrupt our ability to track, record, and analyze sales and inventory and could cause disruptions of operations, including, among other things, our ability to order, process and ship inventory, process financial information including credit card transactions, prepare financial statements, defend against potential data breaches and credit card fraud, process payrolls or vendor payments or engage in other similar normal business activities. Our information systems, including our back-up systems, are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, worms, other malicious computer programs, denial-of-service attacks, security breaches or other cybersecurity incidents, catastrophic events and severe weather such as fires, floods, tornadoes, earthquakes and hurricanes, and usage or coding errors by our team members or partners. From time to time we have experienced, and we may in the future, further experience interruptions, damages, or failures of our information systems, some of which disrupt our business and cause us to expend additional resources to rectify. Although we attempt to mitigate the risk of possible business interruptions by employing customary strategies, any material disruption, malfunction or any other similar problem in or with our information systems could negatively impact our business operations and materially and adversely affect our financial results.
From time to time, our information systems may require repair, upgrade, enhancement, integration and/or replacement for us to maintain successful current operations and achieve future sales and store growth.
Updating our existing information systems subjects us to numerous additional risks, including:
•loss of information;
•disruption of normal operations;
•changes in accounting or other operating procedures;
•changes in internal control over financial reporting or general computer controls;
•problems maintaining accuracy of historical data;
•data breaches caused by mistakes made in the process of updating or upgrading applications or hardware;
•allocation and dedication of key business resources to the updating of existing systems;
•ability to attract and retain adequate experienced technical resources and third-party contractors for the updating of existing systems;
•unknown impact on remaining systems;
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•adequacy of training and change management to address critical changes in business processes and job functions; and
•updated information system ultimately does not meet the needs of the business.
Any failure to successfully update and maintain our information systems, and any missteps, delays, cost overruns, vendor disputes, technical challenges or other similar issues that may arise during the updating of our information systems, could have a material impact on our business, financial condition, results of operations, internal controls over financial reporting and ability to manage our business effectively.
From time to time, we may undertake initiatives involving numerous information systems to improve and enhance our capabilities, whether for operational, financial or risk reduction purposes. Any failure to timely, properly or adequately implement these information systems initiatives could result in increased costs or risks, the diversion of our management’s and team members’ attention and resources and could materially adversely affect our results of operations, our internal controls over financial reporting or general computer controls, our ability to manage our business effectively and possible disruption of our business operations or financial reporting.
We use and expect to continue to use machine learning and other types of artificial intelligence in our business, and challenges with properly managing its use could adversely affect our business.
We use and expect to continue to use artificial intelligence and machine learning technology that is rapidly evolving and gaining capabilities. Advancements in technology may allow us to expand the use of artificial intelligence, including generative artificial intelligence, into key operational and/or administrative aspects of our business over time. Our business, financial condition, and results of operations may be adversely affected if the output of our use of artificial intelligence is or is alleged to be deficient, inaccurate, or biased. As with other emerging technology, new providers may arise from time to time, regulatory and legal limitations on its use may evolve, costs may not be predictable, and the successful use of such technology may require changes to business processes, data systems and processes, and the delivery of products and services provided to customers. We may be required to expend additional resources in order to use artificial intelligence responsibly and effectively in compliance with applicable laws and standards. Our competitors may incorporate artificial intelligence into their business more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.
If we are not successful in managing our inventory balances, our sales may decline and our results of operations may be negatively affected.
We must maintain sufficient inventory levels of merchandise that our customers desire to successfully operate our business. A shortage of popular merchandise could reduce our net sales. Conversely, we also must seek to avoid accumulating excess inventory to maintain appropriate in-stock levels. If we overstock unpopular merchandise, then we may be forced to take significant inventory markdowns or miss opportunities for the sale of other merchandise, both of which could have a negative impact on our profitability, and, in turn, our sales may decline or we may be required to sell the merchandise we have obtained at lower prices. For example, the popularity of much of the licensed apparel we offer is dependent on the performance of certain sporting teams throughout the course of the applicable sports seasons. If we overestimate or underestimate the projected success of a certain sports team, we may have to take significant mark-downs of our licensed apparel for that sports team or we may miss the opportunity to sell additional licensed apparel or other products with that sports team’s logo. The success of sporting teams is highly uncertain and difficult to predict. In addition, factors beyond our control, such as severe weather, local safety concerns, player-lockouts or strikes, may significantly affect whether or not certain sports leagues are able to host their games in their usual seasons, and if they are, whether or not spectators can or are able to attend. Our licensed apparel is significantly more popular when spectators are able to attend the games of the sports teams featured on such apparel. Rapid changes in trade policy, tariffs, or sourcing strategies may also contribute to inventory forecasting challenges, including the timing and quantity of inventory purchases, which could increase the risk of excess inventory, supply shortages, or mismatches between product availability and consumer demand.
If we are unable to predict or effectively react to changes in consumer tastes and preferences, or if we fail to obtain access to, and sell brand name merchandise at competitive prices, then we may lose customers and our sales may decline and our results of operations may be negatively affected.
The level of success we achieve is dependent on, among other factors, the frequency of merchandise and service innovations, how accurately and timely we predict consumer tastes and preferences regarding sporting goods and outdoor recreation merchandise, the level of consumer demand, the availability of merchandise, the related impact on the demand for existing merchandise, and the competitive environment. Our products must appeal to a broad range of customers whose preferences cannot be predicted with certainty and are subject to change. We must identify and obtain access to a broad assortment of brands and styles, to enable us to offer to our customers attractive, innovative and high-quality merchandise on a continuous basis. It is difficult to predict consistently and successfully the products and services our customers will demand as we often purchase products from our vendors several
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months in advance of the proposed delivery. Our failure to timely identify or effectively respond to changing consumer tastes, preferences and spending patterns could negatively affect our relationship with our customers, the demand for our merchandise and services and our market share, which could have a material adverse effect on our net sales and results of operations.
An unexpected major shift in consumer demand away from sporting goods, sports and casual apparel and footwear, and outdoor recreation products could have a material adverse effect on our business, results of operations and financial condition. Consumer spending on sporting goods, sports and casual apparel and footwear, and outdoor recreation products could decrease or be displaced by spending on other activities due to a number of factors, including:
•shifts in behavior away from team sports and outdoor activities in favor of travel, media (including social media) and electronics-driven leisure activities;
•state, local and federal government budget cuts on facilities and activities, such as school athletic budgets, parks, ball fields, recreational sports leagues, hunting and fishing services, etc.;
•weak economic conditions, recession, inflation or other factors, such as global or local pandemics;
•legal and regulatory changes in federal and state hunting and fishing seasons, bag limits and firearm and ammunition restrictions;
•consumer activism relating to controversial products we may carry, services we may perform, or our corporate philosophy, including those relating to firearms and ammunition, which could cause them to take their retail business elsewhere;
•escalating costs of sporting and outdoor activities due to adverse changes in economic conditions, including inflation, rising fuel prices, rising participation fees and rising sporting license fees; and
•severe weather and natural or man-made disasters (e.g., an oil spill closing large areas of hunting or fishing), including heat waves, freezes, hurricanes, tornadoes, large storms and floods.
Total consumer spending may not continue to increase at historical rates due to slowed production growth and shifts in population demographics, and it may not increase in certain product categories given changes in consumer interests and participation rates. Our results of operations could be negatively affected if consumer spending on sporting goods and outdoor recreation products or sports participation rates decline.
Our business is highly dependent upon our ability to purchase brand name merchandise from our vendors at competitive prices. We cannot guarantee that we will be able to acquire such brand name merchandise at competitive prices or on competitive terms in the future. In this regard, brand name merchandise that is in high demand may be allocated by brand name vendors based upon the vendors’ internal criterion which is beyond our control. If we lose any of our brand name vendors or if any of our brand name vendors fail to supply us with their brand name merchandise, we may not be able to meet the demand of our customers for brand names merchandise.
Changes in consumer preferences and spending patterns may be long-lasting or structural rather than temporary and could be amplified by pricing actions taken in response to higher costs or tariffs, which may cause consumers to reduce discretionary spending or shift purchases to alternative products or channels.
Our e-commerce activities expose us to various risks that could have a material adverse impact on our overall results of operations.
Our customers are increasingly using computers, tablets, mobile phones and other devices to shop in our stores and online for our products. Our business has become increasingly omnichannel as we strive to deliver a seamless shopping experience to our customers through both online and in-store shopping experiences. We utilize our own e-commerce platform that allows us to control our customer experience without relying on a single third-party provider. Maintaining and continuing to improve our e-commerce platform involves substantial investment of capital and resources, integrating a number of information and management systems from different vendors, artificial intelligence initiatives, increasing supply chain and distribution capabilities, attracting, developing and retaining qualified personnel with relevant subject matter expertise, and effectively managing and improving the customer experience. Our e-commerce operations are subject to numerous risks that could have a material adverse impact on our overall results of operations, including:
•expansion of our sales across the United States, thereby, subjecting us to the regulatory and other requirements of the 50 states;
•website operating issues, including website availability, system reliability, website operation, Internet connectivity, website errors, computer viruses, telecommunication failures, electronic break-ins or similar disruptions;
•overall website design and functionality, including search capabilities;
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•the need to keep pace with rapid technological change and investments from competitors, and maintain investments necessary for our e-commerce operation;
•legal compliance issues related to the online sale of merchandise;
•intellectual property litigation related to the enforcement of patent rights;
•privacy and personal data security;
•protection against credit card and gift card fraud;
•fulfillment, inventory control and shipping issues for e-commerce transactions;
•tax issues, including state sales tax collection for e-commerce transactions;
•hiring, retention and training of personnel qualified to conduct our e-commerce operation;
•ability to procure adequate computer hardware and software and technology services and solutions from third-party providers; and
•reduction in visits to, diversion and/or cannibalization of sales from, existing retail stores.
Our e-commerce activities also carry challenges such as identifying our e-commerce customer, marketing our website, establishing a profitable on-line merchandising mix, managing shipping costs to our customers, setting prices to compete against other on-line retailers, maintaining accurate website content and functionality, timely and accurately fulfilling orders, integrating our e-commerce business with our store operations, and growing the operation as part of our overall strategic plan. In addition, offering different products through each channel could cause conflicts and cause some of our current or potential e-commerce customers to consider our competitors. Offering products through our e-commerce platform could also cause some of our current or potential vendors to consider competing internet or mobile offerings of their products either on their own or through competing distributors. If we do not successfully manage the risks and navigate the challenges associated with our e-commerce activities, it could have a material adverse effect on our results of operations. Further, governmental regulation of e-commerce continues to evolve in such areas as marketing and advertising, taxation, privacy, data protection and privacy, pricing, content, copyrights, distribution, mobile communications, electronic contracts and other communications, consumer protection, the provision of online payment services, the design and operation of websites and the characteristics and quality of products and services. Unfavorable changes to regulations in these areas could have a material adverse impact on our e-commerce activities.
Any failure to protect the integrity, confidentiality, and availability of our information systems (including our technology infrastructure and networks, third party services, and hosted and on-premises software) and data that we hold relating to us and our customers, team members, and partners (including vendors) could result in lost sales, fines, penalties, assessments, investigations, inquiries, and/or lawsuits, a loss of confidence in us, and harm to our reputation, business, results of operations, and financial condition.
The security of our information systems (including our technology infrastructure and networks, third party services, artificial intelligence, and hosted and on-premises software) and data (including from our customers, team members and partners) is critical to our business as a retailer, and we devote significant resources to protecting our information systems and data. In order to operate our business and to provide products and services to our customers, we collect, source, store, maintain, and process data that can be used to identify a person (i.e., personal data or personally identifiable information), including customers, partners, and team members, along with our intellectual property and proprietary business information. We share data with third parties for further processing consistent with applicable terms and conditions. Our retail stores and online operations depend on the secure transmission and processing of confidential information and the continued operation of information systems necessary to perform store operations and to process transactions. Our customers provide payment card and gift card information, alternative payment information, and other personal information to purchase products or services, enroll in promotional programs, apply for credit, create accounts and make purchases on our website or mobile applications, participate in our loyalty program, or otherwise communicate and interact with us. Job applicants provide personal information in connection with their employment application and our team members provide personal information in connection with their continued employment. We may share information about individual persons with partners assisting with certain aspects of our business. Some personal data and personally identifiable information may be deemed sensitive or otherwise protected under applicable laws or regulations and may be subject to specific requirements for collection, processing, sharing, security, and disposal.
We and our partners rely on commercially available information security technology and industry standard operational practices for collecting, storing, maintaining, transmitting, protecting, and processing data. Despite our security measures, we may not be able to anticipate, prevent, and stop future cybersecurity incidents, including attacks to our information systems and data and those of our partners. Threat actors may have the ability to defeat our security measures and may obtain access to data (including personal data or personally identifiable information) that we hold relating to us and our customers, team members, and vendors, or may cause operational harm. For example, ransomware events could cause key systems to be unavailable for use, or credential stuffing attacks
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of customer accounts on our website could cause customer privacy breaches and unauthorized charges to payment or gift cards, or phishing/smishing attacks, in which attackers masquerade as a trustworthy entity in an electronic communication (including email or text message), could gain control of a user's device and/or credentials. The techniques used by threat actors to attack or access information systems and data evolve and may not be recognized until or after being launched against a target. We may not have the resources or technical sophistication to anticipate, prevent or stop new or evolving cybersecurity incidents, including attacks to our information systems and data and those of our partners. We may also be vulnerable to breaches due to human error or other disruptions, including data privacy breaches by employees, insiders or others with authorized access, or other cybersecurity incidents. As new and improved technologies and methodologies become available to threat actors (for example, artificial intelligence), increased risks and currently unknown vulnerabilities could result in significant future expenditures related to our information systems, technology infrastructure and operations. A future cybersecurity incident could also (1) result in unauthorized access, disclosure, loss, or misuse of our intellectual property, proprietary information, or team member, customer or supplier data, (2) attract substantial media attention, (3) damage our relationships with our customers, team members, and partners, (4) cause a loss of confidence in us or cause us to violate applicable privacy laws and obligations, (5) expose us to costly government enforcement actions or private litigation and financial liability (possibly beyond our insurance coverage), (6) increase the costs we incur to protect against or remediate cybersecurity incidents and vulnerabilities, (7) result in additional costs and operational activities to comply with consumer protection and data privacy laws and obligations, and/or (8) disrupt our operations and distract our management and other key personnel from performing their primary operational duties, any of which could adversely affect our reputation, competitiveness, business, results of operations, and financial condition. Any of the foregoing can be exacerbated by a delay or failure to detect a cybersecurity incident or the full extent of such incident.
We maintain cyber liability insurance in an amount and coverage we deem appropriate, taking into account the specific coverages and coverage requirements in the marketplace. There is no guarantee that our cyber liability insurance will cover a particular cyber incident, that such coverage will be sufficient, or that insurance proceeds will be paid in a timely manner. If an insurance carrier seeks to deny coverage of a particular loss, we may incur costs to dispute the denial of coverage, which could result in paying costs that otherwise would be recovered from insurance and delays in or ultimate denial of coverage.
The data privacy and cybersecurity regulatory environment is constantly changing, with new and increasingly rigorous or complex requirements. Consumer data privacy, cybersecurity, artificial intelligence, and other laws and related regulations have been enacted and additional laws, regulations, and standards are under consideration by various state and federal legislatures, regulatory authorities, and standards bodies. Maintaining compliance with those requirements may require significant effort, cost, new or improved technical capabilities, and changes to our business practices, and may limit our ability to obtain or use data to provide a personalized customer experience or to engage in certain marketing practices. In addition, any alleged or actual failure to comply with applicable requirements could subject us to fines, sanctions, governmental investigations, lawsuits, reputational damage, and other risks and costs that may be difficult to anticipate but could become material.
Intense competition in the sporting goods and outdoor recreation retail industries could limit our growth and reduce our profitability.
The market for sporting and outdoor recreation goods is highly fragmented, intensely competitive, and continually evolving. Our current and prospective competitors include many large companies, some of which have substantially greater market presence, name recognition and financial, marketing, technological, and other resources than us. We compete directly or indirectly with the following categories of companies:
•mass general merchants;
•department stores;
•large format sporting goods stores;
•traditional sporting goods stores;
•specialty outdoor retailers;
•specialty footwear retailers;
•internet retailers;
•suppliers that sell directly to customers; and
•emerging or non-traditional retail formats, including digitally native brands and marketplace platforms.
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Pressure from our competitors could require us to reduce our prices or increase our spending for advertising, promotion, and customer acquisition. Traditional competitors have become increasingly promotional and, if our competitors reduce their prices, it may be difficult for us to reach our net sales goals without reducing our prices, which could impact our margins. The adoption by competitors of innovative store formats, aggressive pricing, promotion or delivery strategies and alternative retail models, such as mobile-first commerce, social commerce, and third-party marketplaces, could cause us to lose market share and could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, as the popularity and use of Internet sites, free merchandise shipping, and suppliers selling directly to consumers continue to increase, our business faces increased competition from various domestic and international sources, including our suppliers. The ability of consumers to compare prices on a real-time basis through the use of smartphones, apps, and digital technology puts additional pressure on us to maintain competitive prices, inventory availability, and fulfillment capabilities.
We may require significant capital in the future to sustain or grow our business, including our store and e-commerce activities, due to increased competition and market entry by new or disruptive retailers. There is no assurance that cash flow from operations will be sufficient to meet those needs or that additional sources of capital will be available on acceptable terms or at all.
A significant disruption to our distribution network or the timely receipt of inventory could adversely impact sales or increase our transportation costs, which would decrease our profits.
We rely upon various means of transportation, including ships and trucks, to deliver products from vendors to our distribution centers and from our distribution centers to our stores. Consequently, our results can vary depending upon numerous factors affecting transportation, including the price of fuel and the availability of trucks and ships. The price of fuel and demand for transportation services has fluctuated significantly over the last few years, and has resulted in increased costs for us and our vendors. For example, during fiscal 2021, we experienced a period of decreased or delayed supply and high inflation as a result of increased competition across the industry for resources, which constrained the supply chain and negatively impacted our transportation and inventory costs. While we have seen some improvement to these constraints, resulting in decreased freight costs over the past couple of years, we may from time to time experience decreased or delayed supply. In addition, changes in regulations may result in higher fuel costs through taxation, transportation restrictions or other means. Fluctuations in transportation costs and availability could adversely affect our results of operations.
Labor shortages in the transportation industry have historically had and could potentially continue to negatively affect transportation costs and our ability to supply our stores in a timely manner. In particular, our business is highly dependent on the shipping and trucking industry to deliver products to our distribution centers and our stores. Our results of operations may be adversely affected if we, or our vendors, are unable to secure adequate transportation resources at competitive prices to fulfill our delivery schedules to our distribution centers or our stores.
Difficulties in moving products manufactured overseas and through the ports of North America, whether due to port congestion, government shutdowns, labor disputes, product regulations and/or inspections or other factors, including man-made or natural disasters and public health events, could negatively affect our business.
We may not be able to continue our store growth plans successfully or continue to manage our growth effectively, and our new stores may not generate sales levels necessary to achieve store-level sales or profitability comparable to that of our existing stores, which could materially and adversely affect our business, financial condition and results of operations.
Our growth strategy includes opening stores in existing markets and, from time to time, new markets. We must successfully choose our store sites, execute favorable real estate transactions on terms that are acceptable to us, construct and equip the stores with furnishings and appropriate merchandise, hire and train competent personnel and effectively open and operate these new stores and integrate the stores into our operations. We may also need to expand our distribution infrastructure, including the addition of new distribution centers, as it might be difficult to extract additional efficiencies from our existing distribution infrastructure. Our plans to increase our number of retail stores will depend in part on the availability of existing vacant retail stores or developable store sites. The availability of second-generation retail store space and developable store sites (i.e., land and redevelopment sites) that meet our criteria is very low and highly-sought after by our competitors. In addition, land prices and lease rents have continued to increase due to various macroeconomic factors. Further, a lack of available financing on terms acceptable to real estate developers or a tightening credit market may adversely affect the retail sites available to us. We cannot expect that stores or sites will be available to us, or that they will be available on terms acceptable to us. If additional retail store sites are unavailable on acceptable terms, we may not be able to carry out a significant part of our growth strategy. Rising real estate costs and acquisition, construction and development costs, available credit to landlords and developers and landlord bankruptcies could also inhibit our ability to grow. If we fail to locate desirable sites, obtain lease rights to these sites on terms acceptable to us, hire adequate personnel and open and effectively operate these new stores, our financial performance could be adversely affected.
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We typically lease our stores under operating leases with initial terms of approximately 15 years, and we generally cannot cancel these leases at our option. If a store is not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term. Similarly, we may be committed to perform our obligations under the applicable leases even if current locations of our stores become unattractive as demographic patterns change. In addition, as each of our leases expire, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could require us to close stores in desirable locations.
In addition, our expansion into new and existing markets may present competitive, merchandising, marketing, human resources, distribution and regulatory challenges that differ from our current challenges, including expanding and improving our operating capabilities, competition among our stores, diminished novelty of our store design and concept, added strain on our distribution centers, maintaining our levels of customer service, training our store team members, additional information to be processed by our management information systems and diversion of our management’s attention from operations, such as the control of inventory levels in our stores. New stores in new markets, where we are less familiar with the target customer and less well-known by the target customer, may face different or additional risks and increased costs compared to stores operated in existing markets or new stores in existing markets. Expansion into new markets could also bring us into direct competition with retailers with whom we have no past experience as direct competitors. To the extent that we are not able to meet new challenges in expanding in new and existing markets, our sales could decrease and our operating costs could increase.
There also can be no assurance that we will be able to continue our expansion plans successfully or continue to manage our growth effectively, or that our new stores will generate sales levels necessary to achieve store-level profitability or profitability comparable to that of our existing stores. Our continued growth also depends in large part, upon our ability to open new stores in a timely manner and to operate them profitably. A slower than expected pace of new store openings may negatively impact our net sales growth and operating income. New stores also may face greater competition and have lower anticipated sales volumes relative to previously opened stores during their comparable years of operation. We may not be able to advertise cost-effectively in new or large markets in which we have less store density, which could slow sales growth at such stores. We also cannot guarantee that we will be able to obtain and distribute adequate product supplies to our new stores or maintain adequate warehousing and distribution capability to support our new stores at acceptable costs. Furthermore, the success of our stores depends on several factors including the sustained success of the shopping center where the store is located, consumer demographics, and consumer shopping habits and patterns. Changes in consumer shopping habits and patterns, reduced customer traffic in the shopping centers where our stores are located, financial difficulties of our landlords, or the shopping center operators, anchor tenants or a significant number of other retailers, and shopping center vacancies or closures, could impact the profitability of our stores and increase the likelihood that our landlords or the shopping centers operators fail to fulfill their obligations and conditions under our lease agreements or governing documents. Thus, our failure to achieve our expansion plans could materially and adversely affect our business, financial condition and results of operations.
Our success depends on the effectiveness of our marketing and advertising programs.
Brand marketing and advertising significantly affect sales at our locations, as well as e-commerce sales. Our marketing and advertising programs may not be successful, which may prevent us from attracting new customers and retaining existing customers. If sales decline, we will have fewer funds available for marketing and advertising, which could materially and adversely affect our revenues, business and results of operations. As part of our marketing efforts, we rely on print, television and radio advertisements, as well as search engine marketing, web advertisements, social media platforms and other digital marketing to attract and retain customers. These efforts may not be successful, resulting in expenses incurred without the benefit of higher revenues or increased customer or team member engagement. Customers are increasingly using internet sites and social media to inform their purchasing decisions and to compare prices, product assortment, and feedback from other customers about quality, responsiveness and customer service before purchasing our services and products. If we are unable to continue to develop successful marketing and advertising strategies, especially for online and social media platforms, or if our competitors develop more effective strategies, we could lose customers and our sales could decline.
Our failure to attract, train and retain quality team members in sufficient numbers, increases in wage and labor costs, and changes in laws and other labor issues could adversely affect our business.
The success of our business depends significantly on our ability to hire and retain quality team members, including store managers, Enthusiasts and other store team members, distribution center team members and corporate directors, managers and other personnel. We plan to expand our team member base to manage our anticipated growth. Competition for non-entry-level personnel, particularly for team members with retail experience, is highly competitive. Additionally, our ability to maintain consistency in the quality of customer service in our stores is critical to our success. Many of our store team members are in entry-level or part-time positions that historically have high rates of turnover, which can lead to increased training and retention costs, particularly if employment opportunities increase. We are also dependent on the team members who staff our distribution centers, many of whom
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are skilled. We may be unable to meet our labor needs and control our costs due to external factors such as the availability of a sufficient number of qualified persons in the work force of the markets in which we operate, competition, unemployment levels, changes in immigration laws, demand for certain labor expertise, prevailing wage rates, wage inflation, changing demographics, health and other insurance costs, adoption of new or revised employment and labor laws and regulations, and the impacts of man-made or natural disasters, such as tornadoes, hurricanes, and public health events. We have experienced, and expect to continue to experience, a shortage of labor for certain functions, which has increased our labor costs and negatively impacted our profitability. The extent and duration of the effect of these labor market challenges are subject to numerous factors, including availability of qualified persons in the markets where we and our contracted service providers operate and unemployment levels within these markets, behavioral changes, prevailing wage rates and other benefits, inflation, adoption of new or revised employment and labor laws and regulations (including immigration/visa processing) or government programs, safety levels of our operations, and our reputation within the labor market.
Potential future legislative initiatives may seek to increase the federal minimum wage in the United States, as well as the minimum wage in a number of individual states or markets. As federal or state minimum wage rates increase, we may need to increase not only the wage rates of our minimum wage team members, but also the wages paid to our other hourly team members as well. Further, should we fail to increase our wages competitively in response to increasing wage rates, the quality of our workforce could decline, causing our customer service to suffer. Any increase in the cost of our labor could have an adverse effect on our operating costs, financial condition and results of operations. If we are unable to hire and retain store-level team members capable of providing a high level of customer service, skilled distribution center team members or other qualified personnel, our business could be materially adversely affected.
Although none of our team members are currently covered under collective bargaining agreements, we cannot guarantee that our team members will not elect to be represented by labor unions in the future. If some or all of our entire workforce were to become unionized and collective bargaining agreement terms were significantly different from our current compensation arrangements or work practice, it could have a material adverse effect on our business, financial condition and results of operations.
If we are unable to protect against inventory shrink, our results of operations and financial condition could be adversely affected.
Our business depends on our ability to effectively manage our inventory. We have historically experienced loss of inventory (also called shrink) due to damage, theft (including from organized retail crime), and other causes. We continue to experience elevated levels of inventory shrink relative to historical levels, which has adversely affected, and could continue to adversely affect, our results of operations and financial condition. To protect against rising inventory shrink, we have taken, and may continue to take, certain operational and strategic actions that could adversely affect our reputation, customer experience, and results of operations. In addition, sustained high rates of inventory shrink at certain stores could impact the profitability of those stores and result in the impairment of long-term assets.
We are subject to payment-related risks that could increase our operating costs, expose us to fraud or theft, subject us to potential liability and potentially disrupt our business.
For our sales to our customers, we accept a variety of payment methods, including credit cards, debit cards, electronic funds transfers and electronic payment systems. Accordingly, we are, and will continue to be, subject to significant and evolving regulations and compliance requirements, including obligations to implement enhanced authentication processes that could result in increased costs and liability, and reduce the ease of use of certain payment methods. For certain payment methods, including credit and debit cards, as well as electronic payment systems, we pay interchange and other fees, which may increase over time. We rely on independent service providers for payment processing, including credit and debit cards. If these independent service providers become unwilling or unable to provide these services to us or if the cost of using these providers increases, our business could be harmed. The payment methods that we offer also subject us to potential fraud and theft by criminals, who are becoming increasingly sophisticated, seeking to obtain unauthorized access to or exploit weaknesses that may exist in the payment systems. We are also subject to payment card association operating rules and agreements, including data security rules and agreements, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply or increase our costs of compliance. If we fail to comply with these rules or requirements, or if our data security systems are breached or compromised, we may be liable for losses incurred by card issuing banks or customers, subject to fines and higher transaction fees, lose our ability to accept credit or debit card payments from our customers, or process electronic fund transfers or facilitate other types of payments. Any failure to comply could harm our brand, reputation, business and results of operations.
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The occurrence of severe weather events, catastrophic public health events, natural or man-made disasters, social and political conditions or civil unrest could significantly damage or destroy our retail locations, could prohibit consumers from traveling to our retail locations or could prevent us from resupplying or staffing our stores or distribution centers or fulfilling our e-commerce orders, especially during peak shopping seasons.
Unforeseen events, including public health events, such as pandemics, natural disasters, such as earthquakes, hurricanes, tornadoes, freezes, snow or ice storms, floods and heavy rains, heatwaves, and man-made disasters, such as an oil spill closing large areas of hunting or fishing, could disrupt our operations or the operations of our suppliers, as well as affect the behavior of our consumers. For example, frequent or unusually heavy snowfall, ice storms, rainstorms or other extreme weather conditions over a prolonged period could make it difficult for our customers to travel to our stores and thereby reduce our sales and profitability. In addition, extreme weather conditions could result in disruption or delay of production and delivery of materials and products in our supply chain and cause staffing shortages in our stores. Global climate change may result in significant natural disasters occurring more frequently or with greater intensity, such as drought, wildfires, storms, sea-level rise, and flooding. We have significant operations in certain states where natural disasters are more prevalent. Natural disasters in those states could result in significant physical damage to or closure of one or more of our stores, distribution centers, facilities, or key vendors Socio-political factors, such as foreign wars, civil unrest or other economic or political uncertainties that contribute to consumer unease or harm to our supply chain or store base, may also result in decreased discretionary spending, property damage and/or business interruption losses. For example, we may face losses related to civil unrest in the United States. To the extent these events result in the closure of one or more of our distribution centers, a significant number of stores, or our corporate headquarters or impact one or more of our key suppliers, our operations and financial performance could be materially adversely affected through an inability to support our business, resupply or staff our stores, distribution centers or corporate headquarters or fulfill our e-commerce orders, especially during peak shopping seasons, and through lost sales and any precautions that we may take may not be adequate to mitigate the impact of such events. If these events impact areas in which we have our corporate headquarters, distribution centers, a concentration of retail stores or vendor sources or foreign and/or U.S. ports, such events could have a material adverse effect on our business, financial condition and results of operations.
Our stores are located primarily in the southern United States which could subject us to regional risks.
Because our stores are located primarily in the southern United States, we are subject to regional risks, such as the regional economy, weather conditions and natural disasters such as floods, droughts, tornadoes and hurricanes. Man-made disasters, such as an oil spill impacting the Gulf Coast region of the United States, a nuclear power plant crisis or other events, may also impact our regional area. We sell a significant amount of merchandise related to sports and outdoor activities which can be adversely affected by such events that may postpone the start of or shorten sports seasons or inhibit participation in other outdoor activities or otherwise have a significant impact on our operations. Several of our competitors operate stores across the United States and thus are not as vulnerable to the risks of operating in one region. If there is a regional economic downturn or any other adverse regional event in the southern United States, there could be an adverse impact on our net sales and results of operations and our ability to implement our planned expansion program.
Fluctuations in merchandise costs, increases in commodity prices and other factors could negatively impact our consolidated and combined results of operations.
The cost of our merchandise has increased and may continue to increase due to, among other factors, higher raw material prices, tariffs, labor costs, freight and logistics expenses, and increased regulatory compliance requirements. A substantial rise in the price of raw materials, including as a result of increases in commodity prices and tariffs on them, could dramatically increase the costs associated with manufacturing the merchandise that we purchase from our suppliers, which could cause the price of our merchandise to increase and could have a negative impact on our sales and profitability. If we increase the price for our products in order to maintain gross margins for our products, such increase may adversely affect demand for, and sales of, our products, which could have a material adverse effect on our financial condition and results of operations.
A disruption in the operation of our distribution centers would affect our ability to deliver merchandise to either our stores or customers, which could adversely impact our revenues and harm our business and financial results.
We operate three distribution centers located in Katy, Texas; Twiggs County, Georgia; and Cookeville, Tennessee, to manage the receipt, storage, sorting, packing and distribution of our merchandise to the appropriate stores or to the customer directly. We depend in large part on the orderly operation of our receiving and distribution process, which depends, in turn, on adherence to shipping schedules, proper functioning of our information technology and inventory control systems and overall effective management of our distribution centers. A disruption or a prolonged interruption in the operations at any of these distribution centers or third-party transportation providers due to a work stoppage, labor shortage, operations significantly below historical efficiency levels, supply chain disruption, public health events (such as pandemics), severe weather (such as tornadoes) or natural or man-made disasters (including events that may be caused or exacerbated by climate change), system or power grid failures or cyber incidents,
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slowdowns or strikes, acts of terror or other unforeseen events in the areas or regions of these facilities could impair our ability to adequately stock our stores, process returns of products to vendors and ship products to our e-commerce customers, thereby adversely affecting our sales and profitability. In addition, we could incur significantly higher costs and longer lead times associated with distributing our products to our stores and customers during the time it takes for us to reopen or replace these distribution centers.
Although we maintain business interruption and property insurance for these facilities, there can be no assurance that our insurance coverage will be sufficient, or that insurance proceeds will be timely paid to us, if our distribution centers are shut down or interrupted for any unplanned reason.
We depend on key personnel in order to support our existing business and future initiatives and may not be able to retain or replace these team members, recruit additional qualified personnel or effectively manage succession.
Our future success may be adversely impacted if we are not able to attract, retain and develop talent and future leaders, including our senior executives and team members. Our senior executive team closely supervises all major aspects of our business, including the design and development of our strategy, and procurement of merchandise; operation of our information technology platforms, supply chain, and store network; development and retention of critical talent; and financial planning, reporting and compliance. Our senior executive team has substantial experience and expertise in our retail business, and serves an integral role in the growth and support of our various initiatives. If we were to lose the leadership of senior executives or other key team members without appropriate successors in place, our business could be adversely affected. In addition, if significant unexpected turnover occurs at the team member level, the loss of the services of these individuals, or any resulting negative perceptions of our business, could damage our reputation and our business. Competition for such qualified talent is significant, and we cannot be sure we will be able to find suitable successors promptly, or at all, or to successfully integrate any successors, or that we will be able to attract, retain, and develop a sufficient number of qualified individuals in future periods.
We depend on approximately 1,500 suppliers to supply us with the merchandise we purchase for resale and our significant dependence on these suppliers exposes us to risks associated with disruption in supply and losses of merchandise purchasing incentives that could have a material adverse effect on our business and results of operations.
We depend on approximately 1,500 suppliers to supply us in a timely and efficient manner with the merchandise we sell. Our significant dependence on these suppliers exposes us to various risks that could have a material adverse effect on our business and results of operations. In 2025, purchases from our largest vendor represented approximately 12% of our total inventory purchases. The merchandise we sell is sourced from a wide variety of domestic and international suppliers and our ability to find qualified suppliers and access merchandise in a timely and efficient manner is often challenging, particularly with respect to merchandise sourced outside the United States. We generally do not have long-term written contracts with our suppliers that would require them to continue supplying us with merchandise, particular payment terms or the extension of credit. As a result, these suppliers could modify the terms of these relationships due to general economic conditions or otherwise. In the past few years, we have begun to see increased competition across the industry for resources throughout the supply chain, which resulted in disruptions to the flow of products from our vendors, labor shortages, reduced shipping container availability, and longer delays at the port. As a result, we have experienced a period of decreased or delayed supply and high inflation which negatively impacted transportation and inventory costs. Fluctuations in the supply chain or changes in our relationships with our suppliers (which can occur for various reasons in or out of our control) have the potential to increase our expenses and adversely affect our results of operations. The formation and/or strengthening of business partnerships between our suppliers and our competitors could directly alter the available supply of merchandise we desire to sell, which could have a material adverse effect on the level of customers purchasing merchandise from us and, thus, our results of operations. Further, vendors increasingly sell their products directly to customers or through broadened or alternative distribution channels, such as department stores, family footwear stores, or e-commerce companies. Moreover, many of our suppliers provide us with merchandise purchasing incentives, such as return privileges, volume purchasing allowances and cooperative advertising, and a decline or discontinuation of these incentives could severely impact our results of operations. If there is a disruption in supply from a principal supplier (which can occur for various reasons in or out of the control of these suppliers), we may experience merchandise out-of-stocks, delivery delays or increased delivery costs, or otherwise be unable to obtain the same merchandise from other suppliers in a timely and efficient manner and on acceptable terms, or at all, which could materially affect our results of operations and our customers’ confidence in us.
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Our private label brand merchandise exposes us to various risks generally encountered by companies that source, manufacture, market and retail exclusive private label brand merchandise.
In addition to national brand merchandise, we offer customers private label brand merchandise, most of which is sold exclusively by Academy. The sale of private label brand merchandise subjects us to certain risks, including:
•our ability to successfully and profitably conduct sourcing and manufacturing activities internally or with third-party agents, manufacturers and distributors;
•our failure or our manufacturers’ failure to comply with federal, state and local regulatory requirements, including product safety, working age and conditions, anti-corruption, import and customs and retail sale restrictions;
•potential mandatory or voluntary product recalls;
•claims and lawsuits resulting from injuries associated with the use of our private label brand merchandise;
•our ability to successfully protect our intellectual property or other proprietary rights (e.g., defending against counterfeit, knock-offs, grey-market, infringing or otherwise unauthorized goods);
•our ability to successfully navigate and avoid claims related to the intellectual property or other proprietary rights of third parties;
•our ability to successfully administer and comply with the obligations under license agreements that we have with the licensors of brands, including in some instances certain sales minimums that if not met could cause us to lose the licensing rights or pay damages;
•sourcing and manufacturing outside the United States, including foreign laws and regulations, political unrest, disruptions or delays in cross-border shipments, changes in economic conditions in foreign countries, exchange rate and import duty fluctuations and conducting activities with third-party manufacturers; and
•increases in the price of raw materials used in the manufacturing of our private label brand merchandise and other risks generally encountered by entities that source, manufacture, market and retail private label brand merchandise.
Our failure to adequately address some or all of these risks could have a material adverse effect on our business, results of operations and financial condition.
A failure of our third-party vendors of outsourced business services and solutions to meet our performance standards and expectations could adversely affect our operations.
As part of our long-term strategy, we look for opportunities to cost-effectively enhance the capabilities of our business services. In some cases, we outsource certain business services and solutions, and rely on the third-party vendors of these business services and solutions, to support a variety of our business functions, including portions of our information technology and management information systems, data security and credit card fraud detection, supply chain (including product manufacturers, logistics service providers or independent distributors), retail operations, administrative services and other core business functions. In some cases, we rely on a single vendor for such services. While we believe we conduct appropriate due diligence before entering into agreements with these third-parties, if we fail to properly manage these vendors or if they fail to meet, or are prevented from meeting, our performance standards and expectations, then our reputation, sales, and results of operations could be adversely affected. Any significant interruption in the operations of these service providers, over which we have no control, could also have an adverse effect on our business. In addition, we could face increased costs or incur substantial time in finding and implementing replacement service vendors or, alternatively, hiring new team members, making additional technology purchases, and changing information systems configurations to provide these business services and solutions in-house.
Harm to our reputation could adversely impact our ability to attract and retain customers, team members, vendors and/or other partners.
Negative publicity or perceptions involving us or our brands, products, team members, operations, vendors, spokespersons, or marketing and other partners may negatively impact our reputation and adversely impact our ability to attract and retain customers, team members, vendors and/or other partners. Failure to detect, prevent or mitigate issues that might give rise to reputational risk or failure to adequately address negative publicity or perceptions could adversely impact our reputation, business, results of operations, and financial condition. Issues that might pose a reputational risk include failure of our cybersecurity measures to protect against cybersecurity incidents, product liability and product recalls, our social media activity, our handling of issues relating to corporate responsibility matters, including our response to such matters, failure to comply with applicable laws and regulations or enforce our own policies, our policies related to the sale of firearms, ammunition and accessories, our policies relating to public health, public stances on controversial social or political issues, concerns surrounding labor, environmental, workplace safety and other practices that may vary from U.S. standards in any of our foreign manufacturers, whether directly or indirectly, and any of the other risks enumerated in these risk factors. As part of our marketing efforts, we rely on social media platforms and other digital marketing to
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attract and retain customers. A variety of risks are associated with our social media activity and digital marketing, including the improper disclosure of proprietary information, negative comments about or negative incidents regarding us, exposure of personally identifiable information, fraud or out-of-date information. The inappropriate use of social media and digital marketing vehicles by us, our customers, team members or others could increase our costs, lead to litigation or result in negative publicity that could damage our reputation. Many social media platforms immediately publish the content, videos and/or photographs created or uploaded by their subscribers and participants, often without filters or checks on accuracy of the content posted. Information posted on such platforms at any time may be adverse to our interests and/or may be inaccurate. The dissemination of negative information related to us or our brands, products, team members, operations, vendors, spokespersons or partners could harm our business, results of operations and financial condition, regardless of the information’s accuracy, and the harm may be immediate without affording us an opportunity for redress or correction. It may be difficult to address negative publicity across media channels, regardless of its accuracy or the reputability of its source, and this challenge could be further exacerbated by fictitious media content, such as content produced by generative artificial intelligence or bad actors. Furthermore, the prevalence of news coverage, the internet, and social media may accelerate and increase the potential scope of any negative publicity we might receive and could increase the negative impact of these issues on our reputation, business, results of operations, and financial condition.
Our quarterly operating results and comparable sales may fluctuate due to seasonality and other factors outside of our control.
We have historically experienced and expect to continue to experience seasonal fluctuations in our net sales, operating income and net income. A significant portion of our net sales and profits is driven by summer holidays, such as Memorial Day, Father’s Day and Independence Day, during the second quarter. Our net sales and profits are also impacted by the November/December holiday selling season, and in part by the sales of cold weather sporting goods and apparel during the fourth quarter. We must carry a significant amount of inventory, particularly before these selling periods. If we miscalculate the demand for our products generally or for our product mix during certain holiday or sporting seasons, our net sales could decline resulting in lower margins, higher labor costs as a percentage of sales and excess inventory, which would harm our financial performance. If we are not successful in selling our inventory during these periods, we may be forced to rely on markdowns or promotional sales to dispose of the excess inventory or may not be able to sell the inventory at all, which could have a material adverse effect on our business, financial condition and results of operations.
Our quarterly results of operations and comparable sales have historically fluctuated, and may continue to fluctuate, as a result of factors outside our control, including:
•general regional and national economic conditions;
•consumer confidence in the economy;
•unseasonal or extreme weather conditions, natural or man-made disasters or public health emergencies (such as snow storms, hurricanes, tornadoes, floods, pandemics, and civil disturbances);
•catastrophic or tragic events (such as tragedies involving firearms);
•changes in demand for the products that we offer in our stores;
•lack of, or access to, new products or brands;
•lockouts or strikes involving professional sports teams;
•retirement of sports superstars used in marketing various products;
•sports scandals, including those involving leagues, associations, teams or athletes with ties to us or our markets;
•costs related to the closure of existing stores;
•litigation;
•the success or failure of college and professional sports teams in our markets;
•expansion of existing or entry of new competitors into our markets;
•the impact of competitive developments in our markets;
•shift in consumer tastes and fashion trends;
•calendar shifts or holiday or seasonal periods;
•the timing of income tax refunds to customers;
•changes in laws and regulations, politics or consumer advocacy affecting our business, including sentiment relating to the sale of firearms and ammunition;
•cancellations of tax-free holidays in certain states;
•pricing, promotions or other actions taken by us or our existing or possible new competitors; and
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•changes in other tenants or landlords or surrounding geographic circumstances in the shopping centers in which we are located.
Our quarterly operating results and comparable sales may also be affected by the timing of new store openings and the relative proportion of new stores to mature stores, the level of pre-opening expenses associated with new stores and the amount and timing of net sales contributed by new stores. Furthermore, our operating margins may be impacted in periods in which incremental expenses are incurred as a result of upcoming new store openings.
We may pursue strategic acquisitions, which could have an adverse impact on our business, as could assimilation of companies following acquisition.
Although we have never done so in the past, we may from time to time acquire companies or businesses in the future. Acquisitions may result in difficulties in assimilating acquired companies, and may result in the diversion of our capital and our management’s attention from other business issues and opportunities. We may not be able to successfully integrate companies or businesses that we acquire, including their personnel, financial systems, distribution, operations and general store opening procedures. If we fail to successfully integrate acquisitions, our business could suffer. In addition, the integration of any acquired business and their financial results may adversely affect our results of operations.
Legal and Regulatory Risks
W e are subject to costs and risks associated with laws and regulations affecting our business, including those relating to the sale, manufacture and import of consumer products and other matters, and the substance or enforcement of such laws may change or become mor e stringent.
We operate in a complex regulatory and legal environment that exposes us to regulatory, compliance and litigation risks that could materially affect our operations and financial results. We are subject to regulation by numerous federal, state and local regulatory agencies and authorities, including the U.S. Consumer Product Safety Commission, Equal Employment Opportunity Commission, Department of Labor, Occupational Safety and Health Administration, Department of Justice (DOJ), Department of Treasury, Federal Trade Commission, Customs and Border Protection, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Securities and Exchange Commission (SEC), Internal Revenue Service, or IRS, and Environmental Protection Agency and comparable state and local agencies.
Laws and regulations affecting our business may change, sometimes frequently and significantly, as a result of political, economic, social or other events. Some of the federal, state or local laws and regulations that affect us include but are not limited to:
•consumer product safety, product liability or consumer protection laws;
•laws related to advertising, marketing, pricing and selling our products, including but not limited to firearms, ammunition, and related accessories;
•labor and employment laws, including wage and hour laws;
•immigration laws and regulations;
•tax laws or interpretations thereof, including collection of state sales tax on e-commerce sales;
•data protection and privacy laws and regulations;
•environmental laws and regulations;
•hazardous material laws and regulations;
•customs or import and export laws and regulations, including collection of tariffs on product imports;
•intellectual property laws;
•antitrust and competition regulations;
•banking and anti-money laundering regulations;
•Americans with Disabilities Act, or ADA, and similar state and local laws and regulations;
•website design and content regulations; and
•securities and exchange laws and regulations.
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We are a federally licensed firearms dealer and we sell firearms, ammunition, and related accessories, including suppressors. Firearms represented approximately 6% of our net sales in 2025. Numerous federal, state and local laws and regulations govern the procurement, transportation, storage, distribution and sale and marketing of firearms, ammunition, and related accessories, including the regulations governing the performance of federally and state mandated procedures for determining customer firearm purchase eligibility (such as age and residency verification, background checks and proper completion of required paperwork). In June 2021, the DOJ announced a policy emphasizing “zero tolerance” for willful violations of the law by federally licensed firearms dealers; in 2025 that policy was repealed. Federal, state, and local agencies continue to regulate and enforce compliance requirements applicable to firearms dealers. In the future, there may be increased federal, state or local regulation or enforcement affecting the sale of firearms, ammunition, and related accessories, including taxation or restrictions on the type of firearms and ammunition available for retail sale, which could reduce our sales and profitability. A failure by us to follow these laws or regulations may subject us to claims, lawsuits, fines, penalties, adverse publicity and government action (up to and including the possible revocation of licenses and permits allowing the sale of firearms and ammunition), which could have a material adverse effect on our business and results of operations.
Another significant risk relating to our operations is compliance with the FCPA and other anti-corruption laws applicable to our international operations. In many foreign countries, particularly in those with developing economies, it may be a local custom that businesses operating in such countries engage in bribery and other business practices that are prohibited by the FCPA or other U.S. and foreign laws and regulations applicable to us.
We have internal policies, procedures and standards that we require all of our team members, agents and vendors to meet. Although we have implemented policies, procedures and standards of conduct designed to ensure compliance with the laws or regulations affecting our business, there can be no assurance that all of our team members, agents and vendors will comply with such laws, policies, procedures and standards of conduct. If we or one of our domestic or foreign agents or vendors fails to comply with a law or regulation, including any of the foregoing laws or regulations, or if we or one of our domestic or foreign agents or vendors fails to comply with our required policies, procedures or standards of conduct, then we may be forced to discontinue conducting business with the agent or vendor and we or they may be subject to claims, lawsuits, fines, penalties, loss of a license or permit and adverse publicity or other consequences that could have a material adverse effect on our business, results of operations and financial condition.
We are, and may in the future, be subject to claims, demands and lawsuits.
From time to time we may be involved in lawsuits, demands or other claims arising in the ordinary course of business. For example, we are, and may in the future, be subject to claims, demands and lawsuits, and we may suffer losses and adverse effects to our reputation, related to:
•injuries or crimes associated with merchandise we sell, that has been associated with an increased risk of injury, including but not limited to firearms, ammunition, firearm accessories, air pistols, crossbows and other archery equipment, knives, deer stands and other hunting equipment, trampolines, wheeled goods such as bicycles and ride-on toys, certain merchandise qualifying as hazardous material and other products;
•product liability claims from customers or actions required or penalties assessed by government agencies relating to products we sell, including but not limited to products that are recalled, defective or otherwise alleged to be harmful;
•the design, purchase, manufacture, import, distribution and sale of our private label brand products;
•the procurement, transportation, storage, distribution and sale of firearms, ammunition, and suppressors, including improper performance of federally mandated procedures for determining customer firearm purchase eligibility (such as age and residency verification, background checks and proper completion of required paperwork);
•municipalities or other organizations attempting to recover costs from firearm manufacturers and retailers, relating to the use of firearms and ammunition;
•the operations of a third-party owned fleet of trucks for distribution purposes, including transportation of hazardous materials by such fleet;
•the procurement and ownership, leasing or operation of property for retail stores, distribution centers and other corporate needs;
•the alleged infringement upon intellectual property rights to merchandise we sell or technology or services we use, including information technology, marketing and advertising services;
•global sourcing, including international, customs and trade issues;
•real estate issues, including construction, leasing, zoning and environmental issues;
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•employment issues, including actions by team members, the Equal Employment Opportunity Commission, the Department of Labor, the Occupational Safety and Health Administration and other federal and state employment agencies;
•immigration issues, including enforcements actions, investigations and/or related litigation;
•commercial disputes, including contractual and business disputes with vendors, landlords, or competitors;
•tort, personal injury and property damage claims related to our stores, e-commerce, distribution centers or corporate headquarters;
•unauthorized access to our information systems or facilities that results in a breach of data security or privacy; and
•regulatory compliance, including relating to consumer protection, marketing and advertising, product safety, workplace safety, firearms, ammunition and related accessories, knives, import/export customs, taxes, tariffs, duties, and surcharges, data security and privacy, food and other regulated products, accounting, labor and employment, environmental matters, and hazardous materials.
We sell firearms, ammunition, and related accessories, which carries inherent liability and reputational risk. These products are associated with an increased risk of injury and related lawsuits with respect to our compliance with federal and state laws and regulations covering such products. Any improper or illegal use by our customers of firearms, ammunition, or related accessories sold by us could have a negative impact on our reputation and business. We are, and may in the future also be, subjected to claims and lawsuits, including potential class actions, relating to our policies and practices on the sale of firearms, ammunition, or related accessories. We are, and may in the future also be, subjected to claims and lawsuits relating to the improper use of firearms, ammunition, or related accessories sold by us, including lawsuits by victims or municipalities or other organizations attempting to recover losses or costs from manufacturers and retailers of firearms, ammunition, and related accessories.
Due to the inherent uncertainties of claims and lawsuits, we cannot accurately predict the ultimate outcome of any such matters. These claims and lawsuits could cause us to incur significant expenses and devote substantial resources to defend against them and, in some cases, we could incur significant losses in the form of settlements, judgments, fines, penalties, injunctions or other orders, as well as negative publicity, that could have a material adverse effect on our business, results of operations and financial condition. Even if a claim is unsuccessful or is not fully pursued, the negative publicity surrounding any such assertions could adversely affect our reputation.
Our insurance or indemnities may not be sufficient to cover damages related to claims and lawsuits.
We maintain insurance coverage with third-party insurers. However, not every risk or liability is or can be protected by insurance, and, for those risks we insure, the limits of coverage we purchase or that are reasonably obtainable in the market may not be sufficient to cover all actual losses or liabilities incurred. Liability insurance coverage is expensive and there is a risk that commercially available liability insurance will not continue to be available to us at a reasonable cost, if at all. If we or other industry participants sustain significant losses or make significant insurance claims, our ability to obtain future insurance coverage at commercially reasonable rates could be materially adversely affected. An inability to obtain liability insurance, significant increases in the cost of insurance we obtain, or losses in excess of our liability insurance coverage could have a material adverse effect on us.
Any insurance we carry, including the aforementioned insurance coverage, reflects deductibles, self-insured retentions, limits of liability and similar provisions that we believe are prudent based on our operations. To offset negative insurance market trends, we may elect to self-insure, accept higher insurance deductibles or reduce the amount of insurance coverage in response to market changes. Additionally, we self-insure a portion of expected losses under our workers’ compensation, general liability, Academy, Ltd. Texas Work Injury Benefit Plan, and group health insurance programs. We currently self-insure a portion of our commercial insurance deductible risk through our captive insurance company. To the extent that our captive insurance company is unable to bear that risk, we may be required to fund additional capital to our captive insurance company or we may be required to bear that loss. We use the services of independent actuaries for loss adjustment expense reserve analyses for the aforementioned lines of insurance. Liabilities associated with these lines of insurance are based on actual claim data and estimates of incurred but not reported claims, developed using actuarial methodologies, and may be based on historical claim trends, industry factors, claim development, as well as other actuarial assumptions. Unanticipated changes in any applicable actuarial assumptions and management estimates underlying our recorded liabilities for these losses, variability in inflation rates, changes in the nature and method of claims settlement, benefit level changes due to changes in applicable laws, insolvency of insurance carriers, and changes in discount rates could result in materially different expenses than expected under these programs, which could have a material adverse effect on our results of operations and financial condition.
We require many of our vendors to carry their own insurance, and we have indemnity agreements with many of our vendors, but we cannot be assured that (1) any specific claim or lawsuit will be subject to a vendor’s insurance or indemnity agreement, (2) our vendors will carry or maintain such insurance coverage or meet their indemnity obligations or (3) we will be able to collect payments
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from our vendors sufficient to offset liability losses or, in the case of our private label brand products, where almost all of the manufacturing occurs outside the United States, that we will be able to collect anything at all.
With all claims and lawsuits, however, there is a risk that liabilities, fines and losses may not be covered by insurance or indemnity or may exceed insurance or indemnity coverage.
Our sales and operating results could be adversely affected by product safety concerns.
If the products that we offer, including from both national brands and our private label brands, do not meet applicable safety standards or our customers’ expectations regarding safety, we could experience decreased sales, increased costs, and/or be exposed to legal and reputational risk. All of our vendors must comply with applicable product safety laws, and we rely on our vendors to ensure that the products we buy comply with all federal, state, and local requirements for sale, including product safety, labeling, and testing requirements. Negative customer perceptions and publicity regarding the safety and sourcing of the products we sell, and events that give rise to actual, potential, or perceived product safety concerns could expose us to government enforcement action and/or private litigation. Furthermore, reputational damage caused by real or perceived product safety concerns could have a negative impact on our sales and operating results.
Our failure to protect our intellectual property or avoid the infringement of third-party intellectual property rights could be costly and have a negative impact on our results of operations.
We believe that our trademarks, service marks, copyrights, patents, processes, trade secrets, domain names and other intellectual property, including our Academy Sports + Outdoors brand, our private label brands, such as Academy Sports + Outdoors, Magellan Outdoors, BCG, O'rageous, Game Winner, Outdoor Gourmet, Freely, R.O.W., Redfield and H2OX, and our goodwill, designs, names, slogans, images and trade dress associated with these brands, are valuable assets, and are essential to our success and our competitive position due to their name recognition with customers. The unauthorized use or other misappropriation of our intellectual property could diminish the value of our brands or goodwill and cause a decline in our sales. In addition, any infringement or other intellectual property claim made by or against us, whether or not it has merit, could be time-consuming, result in costly litigation, cause product delays, cause us to discontinue affected products, distract key resources from our core business or require us to enter into royalty or licensing agreements. As a result, any such claim made by or against us or our failure to protect our intellectual property could have an adverse effect on our results of operations.
Risks Related to Our Indebtedness
Our level of indebtedness requires that we dedicate a portion of our cash flows to debt service payments and reduces the funds that would otherwise be available for other general corporate purposes and other business opportunities, which could adversely affect our operating performance, growth, profitability and financial condition, which in turn could make it more difficult for us to generate cash flow sufficient to satisfy all of our obligations under our indebtedness.
As of January 31, 2026, we had approximately $85.8 million outstanding under the Term Loan and $400.0 million outstanding under the Notes, all of which is secured. As of January 31, 2026, we had no borrowings outstanding under the ABL Facility (as defined in Note 4 of the accompanying financial statements), an available borrowing capacity under the ABL Facility of approximately $992.4 million (which is subject to customary borrowing conditions, including a borrowing base), and outstanding letters of credit of $7.6 million, all of which were issued under the ABL Facility.
Our overall level of indebtedness requires that we dedicate a portion of our cash flows to debt service payments. The Term Loan (as defined in Note 4 of the accompanying financial statements) requires quarterly principal payments through September 30, 2027, and monthly cash interest payments through maturity. The ABL Facility, under which we had no borrowings as of January 31, 2026, matures on March 8, 2029. The Notes (as defined in Note 4 of the accompanying financial statements) require semi-annual payments of interest (in arrears) and matures on November 15, 2027.
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Our indebtedness reduces the funds that would otherwise be available for operations, future business opportunities and payments of our debt obligations and limits our ability to:
•obtain additional financing, if necessary, for working capital and operations, or such financing may not be available on favorable terms;
•make needed capital expenditures;
•make strategic acquisitions or investments or enter into joint ventures;
•react to changes or withstand a future downturn in our business, the industry or the economy in general;
•meet store growth, distribution center expansion, e-commerce growth, budget targets and forecasts of future results;
•engage in business activities, including future opportunities that may be in our interest; and
•react to competitive pressures or compete with competitors with less debt.
These limitations could adversely affect our operating performance, growth, profitability and financial condition, which would make it more difficult for us to generate cash flow sufficient to satisfy our obligations under our indebtedness.
Our ability to make scheduled payments on our debt obligations also depends on our financial condition, results of operations and capital resources, which are subject to, among other things: the business, financial, economic, industry, competitive, regulatory and other factors discussed in these risk factors, and on other factors, some of which are beyond our control, including: the level of capital expenditures we make, including those for acquisitions, if any; our debt service requirements; fluctuations in our working capital needs; our ability to borrow funds and access capital markets; and restrictions on debt service payments and our ability to make working capital borrowings for debt service payments contained in our debt instruments.
If we are unable to generate sufficient cash flow to permit us to make scheduled service payments on our debt, then we will be in default and holders of that debt could declare all outstanding principal and interest to be due and payable. If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full. In addition, in the event of a default, the lenders under the ABL Facility could terminate their further commitments to loan money and our secured lenders under the Term Loan and the ABL Facility and/or holders of the Notes could foreclose against the assets securing their borrowings, and we could be forced into bankruptcy or liquidation.
Despite our level of indebtedness, we may still be able to incur substantially more debt, which could further increase the risks to our financial condition described above.
Despite our level of indebtedness, we may be able to incur significant additional indebtedness in the future, including off-balance sheet financings, trade credit, contractual obligations and general and commercial liabilities. Although the credit agreements governing the Term Loan and the ABL Facility and the indenture governing the Notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness, and additionally we have further borrowing capacity under the ABL Facility. As of January 31, 2026, we had no borrowings outstanding under the ABL Facility, and an available borrowing capacity under the ABL Facility of approximately $992.4 million (which is subject to customary borrowing conditions, including a borrowing base). We may be able to increase the commitments under the ABL Facility by $250.0 million, subject to certain conditions. We may also be able to increase the capacity under the Term Loan by up to the greater of (x) $480.0 million and (y) 100% of the Consolidated EBITDA (as defined in the Term Loan), plus an additional amount, subject to certain conditions, which borrowings would be secured indebtedness. The addition of new debt to our current debt levels could further exacerbate the related risks to our financial condition that we now face.
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If we are unable to generate sufficient cash to service all of our indebtedness, we may be forced to take other actions to fund the satisfaction of our obligations under our indebtedness, which may not be successful.
If our cash flow is insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, raise additional debt or equity capital or restructure or refinance our indebtedness. However, we may not be able to implement any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. Even if new financing were available, it may be on terms that are less attractive to us than our then existing indebtedness or it may not be on terms that are acceptable to us. In addition, the credit agreements governing the Term Loan and the ABL Facility and the indenture governing the Notes restrict our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. Thus, we may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due.
If we cannot generate sufficient cash flow to permit us to make scheduled payments on our debt, then we will be in default and holders of that debt could declare all outstanding principal and interest to be due and payable. If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full. In addition, in the event of a default, the lenders under the ABL Facility could terminate their further commitments to loan money and our secured lenders under the Term Loan and the ABL Facility and/or holders of the Notes could foreclose against the assets securing their borrowings and we could be forced into bankruptcy or liquidation.
The terms of our outstanding indebtedness may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
The credit agreements governing the Term Loan and the ABL Facility and the indenture governing the Notes contain restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our best interest, including restrictions on our ability to:
•incur additional indebtedness and guarantee indebtedness;
•pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock;
•prepay, redeem or repurchase certain debt;
•make loans, investments and other restricted payments;
•sell or otherwise dispose of assets;
•incur liens;
•enter into transactions with affiliates;
•alter the businesses we conduct;
•enter into agreements restricting our subsidiaries’ ability to pay dividends; and
•consolidate, merge or sell all or substantially all of our assets.
Additionally, at certain times, the ABL Facility requires maintenance of a certain minimum adjusted fixed charge coverage ratio. Our ability to comply with the covenants and restrictions contained in our credit agreements and indenture may be affected by events beyond our control. If market or other economic conditions deteriorate, our ability to comply with these covenants and restrictions may be impaired.
A breach of the covenants under one of these agreements could result in an event of default under the applicable indebtedness, which, if not cured or waived, could have a material adverse effect on our business, results of operations and financial condition. Such a default, if not cured or waived, may allow the creditors to accelerate the related debt principal and/or related interest payments and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full. In addition, an event of default under the credit agreement governing our ABL Facility would permit the lenders under our ABL Facility to terminate all commitments to extend further credit under that facility. Furthermore, if we were unable to repay the amounts due and payable under secured indebtedness, the lenders/holders of such indebtedness could proceed against the collateral granted to them to secure that indebtedness, and we could be forced into bankruptcy or liquidation.
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Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
Borrowings under the Term Loan and ABL Facility are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed will remain the same, and our net income and operating cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. In the past we have used, and in the future we may again use interest rate swap agreements to hedge market risks relating to possible adverse changes in interest rates with the intent of reducing volatility in our cash flows due to fluctuations in interest rates. However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk, may prove disadvantageous, or may create additional risks. In addition, our hedging activities are subject to the risks that a counterparty may not perform its obligations under the applicable derivative instrument.
If the financial institutions that are lenders under the ABL Facility fail to extend credit under the facility or reduce the borrowing base, our liquidity and results of operations may be adversely affected.
One of our sources of liquidity is the ABL Facility. Each financial institution that is a lender under the ABL Facility is responsible on a several but not joint basis for providing a portion of the loans to be made under the facility. If any participant or group of participants with a significant portion of the commitments under the ABL Facility fails to satisfy its or their respective obligations to extend credit under the facility and we are unable to find a replacement for such participant or participants on a timely basis (or at all), our liquidity may be adversely affected. In addition, the lenders under the ABL Facility may reduce the borrowing base under the facility in certain circumstances, which could adversely impact our liquidity and results of operations.
Our level of indebtedness may hinder our ability to negotiate favorable terms with our landlords, vendors and suppliers, which could negatively impact our operating performance and, thus, could make it more difficult for us to generate cash flow sufficient to satisfy all of our obligations under our indebtedness.
Our new store profitability is partially attributable to our ability to negotiate attractive rental rates with our landlords and, in the future, to secure sale-leaseback financing at attractive cap rates. Our level of indebtedness may adversely affect our credit profile or rating, which may adversely affect our ability to negotiate favorable rental rates for our new store locations or expiring existing store leases or secure sale-leaseback financing. This could negatively impact the profitability of new and existing stores and potentially limit the number of viable new store locations or replacement store locations for expiring store leases.
Our successful retail strategy is partially attributable to our ability to negotiate favorable trade terms with our vendors. Our level of indebtedness may adversely affect our credit profile or rating, which may adversely affect our ability to negotiate favorable trade terms from our current or future merchandise vendors, including pricing, payment, delivery, inventory, transportation, defective and marketing allowances and other terms, and may increase our need to support merchandise purchases with letters of credit. We may also be unable to negotiate favorable trade terms for our current or future service and non-merchandise vendors, including vendors that assist us in critical aspects of the business such as real estate, transportation and logistics, customs, hazardous material and firearm compliance, warehousing and storage, insurance and risk management, procurement, marketing and advertising, store and online operations and information technology. This could negatively impact the profitability of our business and our ability to effectively compete against other retailers. Thus, our level of indebtedness could adversely affect the profitability of our business, which could make it more difficult for us to generate cash flow sufficient to satisfy our obligations under our indebtedness.
Risks Related to the Ownership of Our Common Stock
Our stock price may be highly volatile or may decline regardless of our operating performance, and you may not be able to resell shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result.
The trading price of our common stock may be highly volatile and may be adversely affected due to a number of factors, many of which are beyond our control, including without limitation those listed elsewhere under this “Risk Factors” section, and the following:
•results of operations that vary from the expectations of securities analysts and investors;
•results of operations that vary from those of our competitors;
•changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors;
•changes in economic conditions for companies in our industry;
•changes in market valuations of, or earnings and other announcements by, companies in our industry;
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•declines in the market prices of stocks generally, particularly those of sporting goods and outdoor recreation retail companies;
•additions or departures of key management personnel;
•strategic actions by us or our competitors;
•announcements by us, our competitors, our suppliers of significant contracts, price reductions, new products or technologies, acquisitions, dispositions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments;
•changes in preference of our customers and our market share;
•changes in general economic or market conditions or trends in our industry or the economy as a whole;
•changes in governmental fiscal policy or interest rate regulation;
•changes in business or regulatory conditions;
•future sales of our common stock or other securities, or the perception that such sales may occur;
•investor perceptions of or the investment opportunity associated with our common stock relative to other investment alternatives;
•changes in the way we are perceived in the marketplace, including due to negative publicity or campaigns on social media to boycott certain of our products, our business or our industry;
•the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;
•changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business;
•announcements relating to litigation or governmental investigations;
•guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;
•changes in accounting principles; and
•other events or factors, including those resulting from informational technology system failures and disruptions, epidemics, pandemics, natural disasters, acts of terrorism, civil unrest, wars or responses to these events.
Furthermore, the stock market may experience extreme volatility that, in some cases, may be unrelated or disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock is low.
In the past, following periods of market volatility, stockholders have instituted securities class action litigation against various issuers. If we were to become involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation, which may adversely affect the market price of our common stock.
We cannot provide any guaranty of future dividend payments or that we will repurchase our common stock pursuant to our share repurchase program, and our indebtedness could limit our ability to pay future dividends on our common stock.
We declared and paid our first quarterly cash dividend for the fourth quarter for fiscal 2021 and have paid a quarterly cash dividend consistently thereafter. However, we are not required to declare dividends. Any determination to pay future dividends to holders of our common stock will be at the discretion of our Board of Directors and will depend upon many factors, including our financial condition, results of operations, projections, liquidity, earnings, business strategy, legal requirements, covenant compliance, restrictions in our existing and any future debt agreements and other factors that our Board of Directors deems relevant. Therefore, there can be no assurance that we will pay any dividends to holders of our common stock or as to the amount of any such dividends. In addition, our historical results of operations, including cash flow, are not indicative of future financial performance, and our actual results of operations could differ significantly from our historical results of operations. We have not adopted, and do not currently expect to adopt, a separate written dividend policy. Furthermore, although our Board of Directors has authorized a share repurchase program, the timing, manner, price and amount of any common stock repurchases will be determined by the Company in its discretion and will depend on a variety of factors, including legal requirements, price and economic and market conditions. We are not obligated to make any purchases under the program, and we may discontinue it at any time.
Additionally, our operations are conducted through our wholly owned subsidiaries and our ability to generate cash to meet our debt service obligations or to make future dividend payments or conduct share repurchases, if any, is highly dependent on the
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earnings of, and the receipt of funds from, our subsidiaries via dividends or intercompany loans. In addition, Delaware law may impose requirements that may restrict our ability to pay dividends to holders of our common stock or our ability to repurchase our common stock.
Anti-takeover provisions in our organizational documents could delay or prevent a change of control.
Certain provisions of our restated certificate of incorporation and amended and restated bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt, or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.
These provisions provide for, among other things:
•a classified Board of Directors, as a result of which our Board of Directors is divided into three classes, with each class serving for staggered terms until the 2028 Annual Meeting at which time our Board of Directors will be elected annually;
•the ability of our Board of Directors to issue one or more series of preferred stock without stockholder approval;
•advance notice requirements for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;
•certain limitations on convening special stockholder meetings; and
•the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% of the shares of common stock entitled to vote generally in the election of directors.
Unless we remove or sunset some or all of these provisions, these anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares.
Our restated certificate of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders and the federal district courts will be the exclusive forum for Securities Act claims, which could limit our stockholders’ ability to bring a suit in a different judicial forum than they may otherwise choose for disputes with us or our directors, officers, team members or stockholders.
Our restated certificate of incorporation provides, subject to limited exceptions, that unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of our company, (ii) action asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee or stockholder of our company to the Company or our stockholders, creditors or other constituents, (iii) action asserting a claim against the Company or any director or officer of the Company arising pursuant to any provision of the Delaware General Corporation Law, or the DGCL, or our restated certificate of incorporation or our amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) action asserting a claim against the Company or any director or officer of the Company governed by the internal affairs doctrine; provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, which already provides that such claims must be bought exclusively in the federal courts. Our restated certificate of incorporation also provides that, unless we consent in writing to the selection of an alternative forum, the U.S. federal district courts will be the exclusive forum for the resolution of any actions or proceedings asserting claims arising under the Securities Act. While the Delaware Supreme Court has upheld the validity of similar provisions under the DGCL, there is uncertainty as to whether a court in another state would enforce such a forum selection provision. Our exclusive forum provision does not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders are not deemed to have waived our compliance with these laws, rules and regulations.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the forum provisions in our restated certificate of incorporation. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other team members or stockholders. Alternatively, if a court were to find the choice of forum provision contained in our restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial conditions.
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You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.
We have approximately 235 million shares of common stock authorized but unissued. Our restated certificate of incorporation authorizes us to issue these shares of common stock, options and other equity awards relating to common stock for the consideration and on the terms and conditions established by our Board of Directors in its sole discretion, whether in connection with acquisitions or otherwise. As a result, our Board of Directors may authorize the issuance of additional shares of common stock or securities convertible into or exercisable for common stock without stockholder approval, subject to applicable laws and stock exchange requirements. We have reserved shares for issuance under our New Academy Holding Company, LLC 2011 Unit Incentive Plan (the “2011 Equity Plan”), our 2020 Omnibus Incentive Plan (the “2020 Equity Plan”), and our 2020 Employee Stock Purchase Plan (the “ESPP”). Any common stock that we issue, including under our 2011 Equity Plan, 2020 Equity Plan, ESPP or other equity incentive plans that we may adopt in the future, will dilute the percentage ownership of our existing stockholders. In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you and could adversely affect the market price of our common stock.
Item 1B. Unresolved Staff Comments
None.
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Item 1C. Cybersecurity
The security of our information systems and data is critical to our business as a retailer, and we devote significant resources to protecting our information systems and data. We continue to invest in people, technology, and processes to protect data and systems against evolving cybersecurity threats. We have implemented a cybersecurity program that we believe is reasonably designed to manage risks from cybersecurity threats, including those that may result in adverse effects on the confidentiality, integrity, and availability of our information systems, and impact the security of information we create, maintain, and process on our information systems. Our program is designed to enable us to prevent, monitor, identify, detect, investigate, respond to, mitigate, and report on cybersecurity threats and incidents.
Cybersecurity Governance
The Company has adopted a cross-functional and multi-management level approach to assessing and managing risks arising from cybersecurity threats. The audit committee of our Board of Directors (the “Audit Committee”) oversees the Company’s enterprise risk management program. As part of this oversight, the Audit Committee has primary responsibility for overseeing risks related to cybersecurity, although the full Board of Directors retains ultimate oversight over these risks. Cybersecurity is a standing agenda item of the Audit Committee’s regular quarterly meetings, where the Audit Committee reviews and discusses cybersecurity risks along with the Company’s cybersecurity programs and strategy with management. The Audit Committee receives reports and presentations from our Chief Information Officer (CIO) and our Chief Legal Officer (CLO) at its quarterly meetings on a range of topics, including our cybersecurity program and processes, our information systems, risk identification and mitigation strategies, the evolving cybersecurity threat landscape, regulatory developments, board education, and notable incidents or threats affecting the Company. From time to time between quarterly meetings, our CIO and CLO or other members of management may hold additional cybersecurity-related discussions with the Audit Committee. The Audit Committee regularly reports on its cybersecurity program oversight to the Board of Directors.
Our CIO is the primary executive responsible for leading the Company’s cybersecurity risk management program and has over 20 years of experience in various technology-related roles, including responsibilities related to managing information security, developing cybersecurity strategy, and implementing cybersecurity programs. Our cybersecurity team is responsible for the operations of our cybersecurity program, including implementing, monitoring, and maintaining cybersecurity and data protection solutions and practices across the enterprise. The team is led by our Director of IT Security and Compliance (our “Security Director”), who reports to our CIO. Our Security Director has over 20 years of IT experience and over 12 years of cybersecurity experience, and holds a Master of Science in Cybersecurity and Information Assurance and a Master of Legal Studies in Cyber Law. Our cybersecurity team works with our crisis management team and cybersecurity advisors we may engage to respond to and manage the resolution of cybersecurity incidents. Our CIO, Security Director, and cybersecurity team also work closely with our legal team on various aspects of our cybersecurity program.
Our Cyber Security Committee, which is chaired by the CIO, and includes the CLO, the Chief Administrative Officer, and the Security Director among other team members, is a management committee chartered to oversee our cybersecurity program. The Cyber Security Committee meets at least quarterly and more frequently as appropriate to review and discuss the Company’s cybersecurity program. Our CIO and Security Director provide reports at each Cyber Security Committee meeting on cybersecurity program matters and initiatives. The Cyber Security Committee reviews any significant cybersecurity threats or incidents reported by the Security Director. The Cyber Security Committee elevates cybersecurity threats and incidents to the Audit Committee, CEO and CFO, Disclosure Committee, and crisis management team, as appropriate. Our Disclosure Committee, a cross-functional group consisting of accounting, legal, finance, investor relations, internal audit, and IT management personnel, is responsible for disclosures concerning material cybersecurity incidents and the Company’s cybersecurity practices.
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Risk Management and Strategy
Our cybersecurity program is based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework and applies, as appropriate, to the Company’s internal and external information systems, applications, networks, and operations. We conduct scanning, testing, and assessments designed to identify risks from cybersecurity threats, assess controls, and calibrate planning in response to rapidly evolving cybersecurity risks, and use the results from this testing to adjust our cybersecurity program roadmap to mitigate cybersecurity risks as they evolve. Our internal audit team performs audits on various aspects of cybersecurity and reports the results of these audits in its quarterly reports to management, the Cyber Security Committee, and the Audit Committee. Our internal auditors assess the sufficiency of security controls for relevant systems. Leaders from our risk management and internal audit teams administer our enterprise risk management program, which is designed to identify, assess and manage our top enterprise risks, including risks arising from cybersecurity threats.
We employ a risk-based approach to secure access to our networks, systems, and applications by partners and vendors. We have implemented risk assessment processes for partners and vendors receiving access to our environment and data. Our partners and vendors with whom we share information to conduct our business are required to safeguard it by appropriate means, including elevated contractual commitments when appropriate. We provide cybersecurity training to our team members during onboarding and regularly thereafter. We maintain a software vulnerability management program supported by internal personnel and third-party service providers. We deploy technologies to automate and enhance our operational security capabilities. We also use third-party managed security services to augment our cybersecurity team’s capabilities.
We have adopted and maintain a Cyber Security Incident Response Plan (the “CSIRP”) to provide a standardized framework for responding to cybersecurity incidents. The CSIRP is a coordinated approach to investigate, contain, mitigate, and document cybersecurity incidents, including reporting and escalating findings as appropriate (including to the crisis management team). We also periodically engage external assessors, consultants, Payment Card Industry-Data Security Standards (PCI-DSS) auditors, or other third parties to assist with our cybersecurity program. When appropriate, we engage forensic investigators and legal counsel to investigate cybersecurity threats and incidents.
Based on the information available to us as of the date of this Annual Report, we believe that risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected us, including our business strategy, results of operations or financial condition, and as of the date of this Annual Report, we are not aware of any material risks from cybersecurity threats that are reasonably likely to do so. However, we cannot eliminate all risks from cybersecurity threats or provide assurances that the Company will not be materially affected by such risks in the future. Due to evolving cybersecurity threats, despite our security measures, we may not be able to anticipate, prevent, and stop future cybersecurity incidents, including attacks to our information systems and data and those of our partners. Additional information on cybersecurity risks we face is discussed in Item 1A of Part I, “Risk Factors”, which should be read in conjunction with the foregoing.
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Item 2. Properties
We are headquartered at 1800 North Mason Road, Katy, Texas, 77449. The following table sets forth the location, use and size of our corporate and distribution center facilities:

Location | Use | Approximate Square Footage |
Katy, Texas | Corporate Office Building 1 | 400,000 |  |
Katy, Texas | Corporate Office Building 2 | 200,000 |  |
Katy, Texas | Bulk Warehouse | 200,000 |  |
Katy, Texas | Distribution Center | 1,400,000 |  |
Twiggs County, Georgia | Distribution Center | 1,600,000 |  |
Cookeville, Tennessee | Distribution Center | 1,600,000 |  |
Kowloon, Hong Kong | Global Sourcing Office | 5,000 |  |

With the exception of one retail store which we own, we lease all of our retail stores, distribution centers and corporate offices. Our initial store lease terms are typically 15 to 20 years with various renewal options and lease escalation structures. We believe that all of our leases are entered into at then-prevailing market lease rates. As of January 31, 2026, our combined leased and owned store square footage was approxim ately 21.9 million squ are feet.
Item 3. Legal Proceedings
The information set forth in Note 12 — Commitments and Contingencies to our consolidated financial statements included under Part IV, Item 15 of this Annual Report is incorporated herein by reference.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Academy's common stock began trading on the Nasdaq Stock Market LLC, or Nasdaq, under the symbol “ASO” on October 2, 2020. Prior to that date, there was no public market for our common stock.
Performance Graph
This performance graph shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act. The graph below presents the Company’s cumulative total stockholder returns relative to the performance of the Nasdaq US Benchmark Retail Index and the Russell 3000 Index commencing October 2, 2020 (the Company’s initial day of trading) through January 30, 2026. All values assume a $100 initial investment at the opening price of the Company’s common stock on Nasdaq and assume all dividends were reinvested on the date paid. The points on the graph represent fiscal quarter-end values based on the last trading day of each fiscal quarter. The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock.
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Issuer Purchases of Equity Securities
The following table summarizes the repurchases and cancellations of our common stock during the fourth quarter of 2025:

Period |  | Total Number of Shares Purchased (a) |  | Average Price Paid per Share (b) |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (c) |  | Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (c)
November 2, 2025 to November 29, 2025 |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
November 30, 2025 to January 3, 2026 |  | 1,107,000 |  |  | 52.50 |  |  | 1,107,000 |  |  | 478,383,954 |
January 4, 2026 to January 31, 2026 |  | 742,900 |  |  | 56.31 |  |  | 742,900 |  |  | 436,565,881 |
Total |  | 1,849,900 |  |  | $ | 54.03 |  |  | 1,849,900 |  |  | $ | 436,565,881 |

(a) The total number of shares purchased excludes shares which were net-settled, and therefore not issued, to cover employee withholding taxes related to the vesting of certain restricted stock awards and exercise of certain stock option awards.
(b) Excludes the impact of unpaid excise taxes.
(c) On December 4, 2024, the Company's Board of Directors approved a new share repurchase program under which the Company is authorized to purchase up to $700 million of its outstanding shares during the three-year period ending December 4, 2027 (the “2024 Share Repurchase Program”), and which replaces the previously approved share repurchase program. As of January 31, 2026, approximately $436.6 million remained available for share repurchases pursuant to the 2024 Share Repurchase Program (see Note 2 to the accompanying financial statements). The 2024 Share Repurchase Program does not obligate the Company to acquire any particular number of common shares, and the program may be suspended, extended, modified or discontinued at any time.
Holders
As of March 10, 2026, there were 11 holders of record of ASO, Inc.'s common stock. The number of holders of record is based upon the actual number of holders registered at such date and does not include holders of shares in “street name” or persons, partnerships, associates, corporations or other entities identified in security position listing maintained by depositories.
Dividends
We declared and paid our first quarterly cash dividend for the fourth quarter for fiscal 2021 and have paid a quarterly cash dividend consistently thereafter. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for information regarding quarterly dividend payments for 2025. However, we are not required to declare dividends. Any determination to pay future dividends to holders of our common stock will be subject to the discretion and approval of the Board of Directors and will depend upon many factors, including the Company’s results of operations, liquidity, earnings, business strategy, legal requirements, covenant compliance, restrictions in our existing and any future debt agreements and other factors that our Board of Directors deems relevant.
Item 6. [Reserved]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations for the year ended January 31, 2026 (“2025”) and the year ended February 1, 2025 (“2024”) should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report for the fiscal year ended January 31, 2026 (this “Annual Report”). Year-to-year comparisons between 2024 and 2023 have been omitted from this Annual Report, but may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended February 1, 2025.
This discussion contains forward-looking statements that involve risks and uncertainties. See the section of this Annual Report entitled “Cautionary Statement Regarding Forward-Looking Statements.” When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that characterize our business. Known material factors that could affect our financial performance and actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this discussion or otherwise made by our management, are described in the “Part I. Item 1A. Risk Factors” section of this Annual Report.
Any reference in this Annual Report to “year” or any year in particular refers to our fiscal year, which represents the fifty-two or fifty-three week period ending on the Saturday closest to January 31. Unless otherwise specified, all comparisons or changes regarding 2025 are made to 2024.
All references in this discussion and analysis to “2025”, “2024” and “2023” or like terms relate to our fiscal years as follows:

Fiscal Year |  | Ended |  | Weeks
2025 |  | January 31, 2026 |  | 52
2024 |  | February 1, 2025 |  | 52
2023 |  | February 3, 2024 |  | 53

Overview
We are a leading full-line sporting goods and outdoor recreation retailer in the United States. Our mission is to provide “Fun for All” and we fulfill this mission with a localized merchandising strategy and value proposition that deeply connect with a broad range of consumers. Our product assortment focuses on key categories of outdoors, sports & recreation, apparel, and footwear (representing 31%, 22%, 27% and 20% of our 2025 net sales, respectively) through both leading national brands and a portfolio of private label brands, which go well beyond traditional sporting goods and apparel offerings.
Our business is subject to seasonal fluctuations. A significant portion of our net sales and profits is driven by summer holidays, such as Memorial Day, Father’s Day and Independence Day, during the second quarter. Our net sales and profits are also impacted by the July/August back-to-school selling season during the second and third quarters, the November/December holiday selling season, and in part by the sales of cold weather sporting goods and apparel during the fourth quarter.
As of January 31, 2026, we operated 322 stores that range in size from approximately 40,000 to 130,000 gr oss square feet, with an average size of approxima tel y 70,000 gro ss square feet, through ou t 21 contiguous states located primarily in the southern United States. Our stores are supported by approxi mately 23,000 team members, three distribution centers, and our e-commerce platform, which includes our website at www.academy.com and our mobile app. Additionally, we are deepening our customer relationships, further integrating our e-commerce platform with our stores and driving operating efficiencies by developing our omnichannel capabilities such as our mobile app, optimizing the website experience and upgrading our fulfillment capabilities.
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The following table summarizes store activity for the periods indicated:

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Beginning stores |  | 298 |  |  | 282 |  |  | 268 |
Q1 new stores |  | 5 |  |  | 2 |  |  | 1 |
Q2 new stores |  | 3 |  |  | 1 |  |  | 1 |
Q3 new stores |  | 11 |  |  | 8 |  |  | 5 |
Q4 new stores |  | 5 |  |  | 5 |  |  | 7 |
Closed |  | — |  |  | — |  |  | — |
Ending stores |  | 322 |  |  | 298 |  |  | 282 |
Relocated stores |  | — |  |  | — |  |  | — |

Tariffs and Other Macroeconomic Trends
We continue to monitor global macroeconomic trends and uncertainties such as inflation, existing and potential tariffs, and other shifting trade policies, which have impacted consumer spending and could adversely affect our ability to grow sales and merchandise margin. The impact of the evolving macroeconomic environment on our financial results is uncertain. We have worked diligently to mitigate the impact of tariffs on our business. We are closely monitoring the evolving environment with respect to tariffs and other trade policy developments and will continue to adjust plans as needed, including, but not limited to, inventory purchase quantities and timing, strategic pricing and promotional adjustments to maintain value for our customers, diversifying sourcing to shift country of origin, and vendor negotiations.
How We Assess the Performance of Our Business
Our management considers a number of financial and operating metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, determine the allocation of resources, make decisions regarding corporate strategies and evaluate projections. These metrics include operational measures and non-GAAP metrics supplemental to our GAAP results.
Comparable Sales. We define comparable sales as the percentage of period-over-period net sales increase or decrease, in the aggregate, for stores open after thirteen full fiscal months, as well as for all e-commerce sales. There may be variations in the way in which some of our competitors and other retailers calculate comparable sales. As a result, data in this Annual Report regarding our comparable sales may not be comparable to similar data made available by other retailers. Stores which have been significantly remodeled or relocated are removed from this calculation until the new store has been in operation for substantially all of the periods being compared. Stores which have been closed for an extended period of time due to circumstances beyond our control are also removed from the calculation. Any sales made through our website or mobile app are allocated to e-commerce sales for the purpose of measuring comparable sales, regardless of how those sales are fulfilled, whether shipped to home or picked up in-store or curbside through our buy-online-pickup-in-store program (“BOPIS”). For example, all BOPIS transactions, which are originated by our website, are allocated to e-commerce sales for the purpose of comparable sales, despite the fact that our customers pick up these purchases from a specific store.
Increases or decreases in e-commerce between periods being compared directly impact the comparable sales results. Various other factors affect comparable sales, including consumer preferences; buying trends and overall economic trends; our ability to identify and respond effectively to customer preferences and local and regional trends; our ability to provide an assortment of high quality/value oriented product offerings that generate new and repeat visits to our stores and our website; the customer experience and unique services we provide in our stores; our ability to execute our omnichannel strategy, including the growth of our e-commerce business; changes in product mix and pricing, including promotional activities; the number of items purchased per visit and average order value; unseasonal or extreme weather; a shift in the timing of a holiday between comparable periods; and the number of stores that have been in operation for more than thirteen months.
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Transactions and average ticket. We define transactions as the number of customer transactions for stores and e-commerce during a given period on a comparable sales basis. Transactions are influenced by customer traffic, the amount of customers that visited our stores or website, and sales conversion, the percent of those customers that made a purchase. We define average ticket as total sales divided by the number of transactions during a given period, which tells us the average amount the customer is spending on a purchase.
Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings Per Share and Adjusted Free Cash Flow. Management uses Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings Per Share and Adjusted Free Cash Flow to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. Management also uses Adjusted EBIT as a performance target to establish and award discretionary annual incentive compensation. See “Non-GAAP Measures” below.
Components of Our Results of Operations. Our profitability is primarily influenced by fluctuations in net sales, gross margin and our ability to leverage selling, general and administrative expenses.
Net Sales. Net sales are derived from in-store and e-commerce merchandise sales, net of sales tax and an allowance for merchandise returns.
Net sales fluctuations can be driven by new store openings, comparable sales increases or decreases including e-commerce sales, our ability to adjust inventory based on sales fluctuations, our management of vendor relations and meeting customer demand, allowances and logistics, seasonality, unseasonal or extreme weather, changes in consumer shopping preferences, consumer discretionary spending, and changes in product mix and pricing, including promotional activities.
We must maintain sufficient inventory levels of merchandise that our customers desire to successfully operate our business. A shortage of popular merchandise could reduce our net sales. Conversely, we also must seek to avoid accumulating excess inventory to avoid markdowns and clearance, which negatively impact sales and gross margin. We deploy several tools to improve inventory handling and vendor management, including third-party programs to analyze our inventory stock, execute a disciplined markdown strategy and improve our inventory management throughout the year at every location. We have coupled these tools with the data we collect from our myAcademy Rewards program, our customer database and targeted customer surveys, so that we can better estimate future inventory requirements. It is imperative that we continue to find innovative ways to strengthen our inventory management if we are to remain competitive and expand our margins on a go-forward basis.
Our broad assortment gives us an advantage over mass general merchants who typically do not carry the full assortment of leading national brands sold at Academy. We have also continued to add private label brands to our assortment of products, which we generally price lower than the national brand products of comparable quality that we also offer. A shift in our sales mix in which we sell more units of our private label brand products and fewer units of the national brand products would generally have a positive impact on our gross margin rate but an adverse impact on our total net sales. Furthermore, our softgoods merchandise divisions, which consist of apparel and footwear, have higher margins than our hardgoods merchandise divisions, which consist of outdoors and sports and recreation. A shift in sales mix toward softgoods would generally have a positive impact on gross margin and a shift in sales mix towards hardgoods would generally have a negative impact on gross margin rate.
The expansion and enhancement of our omnichannel capabilities have contributed to increased sales in recent years. We continue to invest in initiatives designed to drive traffic to our stores and e-commerce platforms, including our website and mobile application, improve conversion, and support our long-term objective of continuing to increase our e-commerce penetration of sales. These initiatives include investments in our customer data ecosystem (data lake and Customer Data Platform), enabling customer-level attributes and models that power personalization and deepen engagement.
We are implementing enhancements to the online shopping experience, including a redesigned homepage, expanded BOPIS functionality, enhanced shipping notifications, and ongoing improvements in product discovery and site experience. Our e-commerce platform supports store operations by driving customer demand, providing real-time product discovery and inventory visibility, and enabling store-fulfilled transactions such as BOPIS, ship-to-store, and ship-from-store. During 2025, stores facilitated approximately 95% of our total sales, including ship-from-store, BOPIS, and in-store retail sales. We expect to continue investing in the expansion and enhancement of our omnichannel capabilities, including our mobile application, website experience optimization, fulfillment improvements, and emerging digital commerce capabilities such as artificial intelligence-enabled shopping experiences and social and marketplace commerce integrations. These initiatives are intended to support long-term growth and improve customer experience, and will require ongoing investment.
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We expect that new stores will be a key driver of growth in our net sales and gross margin in the future as we execute our new store opening growth plans. Our growth strategy encompasses both deepening our presence in legacy and existing markets as well as entering new markets, leveraging enhanced brand awareness and operational efficiencies. Our new store model favors off-mall locations within power centers or stand-alone buildings. We utilize comprehensive demographic and trade data to guide our real estate site selection. During the fiscal year 2025, we opened 24 new stores. We plan to open 20 to 25 stores in fiscal year 2026 and we are continuously evaluating available locations that meet our size requirements and market criteria. Our strategic real estate approach, including the 63 stores opened since fiscal year 2021, has positioned us effectively for continued expansion.
Gross Margin. Gross margin is our net sales less cost of goods sold. Cost of goods sold includes the direct cost of merchandise and costs related to procurement, warehousing and distribution. These costs consist primarily of tariffs, payroll and benefits, distribution center occupancy costs, depreciation and freight, and are generally variable in nature relative to our inventory receipts and sales volume.
Our gross margin depends on a number of factors, such as net sales increases or decreases, our promotional activities, product mix including private label brand merchandise sales, and our ability to control cost of goods sold, such as inventory and logistics cost management. Our gross margin is also impacted by variables including tariffs, commodity costs, freight costs, shrinkage (discussed below), inventory processing costs, and e-commerce shipping costs. We track and measure gross margin as a percentage of net sales in order to evaluate our performance against profitability targets.
We refer to loss or theft of inventory as “shrinkage” or “shrink.” A prolonged period of significant increased shrink could have a material negative impact on our gross margin and results of operations.
Selling, General and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses include store and corporate administrative payroll and payroll benefits, store and corporate headquarters occupancy costs, advertising, credit card processing, information technology, pre-opening costs and other store and administrative expenses. These expenses are both variable and fixed in nature. SG&A expenses as a percentage of sales increased from 24.8% in 2024 to 26.3% in 2025. The majority of the increase in SG&A from the prior year was driven by investments in our growth initiatives, including costs related to new stores (such as additional property and facility fees, employee compensation costs and advertising costs). We track and measure operating expenses as a percentage of net sales in order to evaluate our performance against profitability targets. Management of SG&A expenses depends on our ability to balance operating costs, such as store and corporate headcount, information technology infrastructure and marketing and advertising expenses, while efficiently and effectively servicing our customers. Selling, general, and administrative expenses on the Consolidated Statements of Income includes gains of approximately $15.4 million in 2025 and $7.1 million in 2024 related to multiple sale-leaseback transactions which qualified for sale accounting under ASC 606 (see Note 11).
Pre-opening expenses represent non-capital expenditures associated with the opening of new stores and distribution centers prior to sales generation or start of operations, which consist primarily of occupancy costs, marketing, payroll and recruiting costs, and are expensed as incurred. As we execute our new store opening growth plans, we expect our pre-opening expenses to increase and result in a negative impact to SG&A as a percentage of sales. The following table summarizes our pre-opening expense activity for the periods presented:

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Number of new stores opened |  | 24 |  |  | 16 |  |  | 14 |
Pre-opening expenses (in millions) |  | $ | 14.6 |  |  | $ | 13.9 |  |  | $ | 8.3 |

Interest Expense. Interest expense includes regular interest payable related to our Term Loan, Notes and ABL Facility (see Note 4) and the amortization of our deferred loan costs and original issuance discounts associated with the acquisition of the debt.
Income Tax Expense. ASO, Inc. is treated as a U.S. corporation for U.S. federal, state, and local income tax purposes and accordingly, a provision for income taxes has been recorded for the anticipated tax consequences of our reported results of operations for federal, state and local income taxes. Recent fluctuations in income tax expense have been primarily a result of changes in income before income taxes.
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Results of Operations
A discussion regarding Results of Operations and Analysis of Financial Condition for the fiscal year ended February 1, 2025, as compared to the fiscal year ended February 3, 2024, is included in “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” to our Annual Report on Form 10-K for the fiscal year ended February 1, 2025.
2025 (52 weeks) Compared to 2024 (52 weeks)
The following table sets forth amounts and information derived from our Consolidated Statements of Income for the periods indicated as follows (dollar amounts in thousands):

|  |  | Fiscal Year Ended |  | Change
|  |  | January 31, 2026 |  | February 1, 2025 |  | Dollars |  | Percent
| Net sales |  | $ | 6,053,414 |  |  | 100.0 | % |  | $ | 5,933,450 |  |  | 100.0 | % |  | $ | 119,964 |  |  | 2.0 | %
| Cost of goods sold |  | 3,947,801 |  |  | 65.2 | % |  | 3,921,990 |  |  | 66.1 | % |  | 25,811 |  |  | 0.7 | %
| Gross margin |  | 2,105,613 |  |  | 34.8 | % |  | 2,011,460 |  |  | 33.9 | % |  | 94,153 |  |  | 4.7 | %
| Selling, general and administrative expenses |  | 1,593,429 |  |  | 26.3 | % |  | 1,472,821 |  |  | 24.8 | % |  | 120,608 |  |  | 8.2 | %
| Operating income |  | 512,184 |  |  | 8.5 | % |  | 538,639 |  |  | 9.1 | % |  | (26,455) |  |  | (4.9) | %
| Interest expense, net |  | 36,214 |  |  | 0.6 | % |  | 36,873 |  |  | 0.6 | % |  | (659) |  |  | (1.8) | %
| Write-off of deferred loan costs |  | — |  |  | 0.0 | % |  | 449 |  |  | 0.0 | % |  | (449) |  |  | (100.0) | %
| Other income, net |  | 10,087 |  |  | 0.2 | % |  | 36,908 |  |  | 0.6 | % |  | (26,821) |  |  | (72.7) | %
| Income before income taxes |  | 486,057 |  |  | 8.0 | % |  | 538,225 |  |  | 9.1 | % |  | (52,168) |  |  | (9.7) | %
| Income tax expense |  | 109,289 |  |  | 1.8 | % |  | 119,778 |  |  | 2.0 | % |  | (10,489) |  |  | (8.8) | %
| Net income |  | $ | 376,768 |  |  | 6.2 | % |  | $ | 418,447 |  |  | 7.1 | % |  | $ | (41,679) |  |  | (10.0) | %
| * Percentages in table may not sum properly due to rounding.

Net Sales. Net sales increased $120.0 million, or 2.0%, in fiscal year 2025 compared to fiscal year 2024, which was driven by increased sales of 3.6% in the sports and recreation merchandise division, 2.4% in the apparel merchandise division, 1.2% in the footwear merchandise division and 1.2% in the outdoor division.
We opened 24 new stores since the end of the 2024 fiscal year, 5 of which opened throughout the 2025 fourth quarter. During the 2025 fiscal year, these 24 stores generated $142.8 million of net sales, including e-commerce. Since re-launching our new store program in 2022, we have opened 63 new stores, 39 of which have been open for at least twelve months. Over the last twelve months, those 39 stores have averaged approximately $13 million in net sales per store, including e-commerce. We believe that performance of new stores in year one is partially affected by the season in which the new store opens and the brand awareness in the region the new store opens.
Comparable sales decreased 1.5% driven by lower comparable sales across all merchandise divisions, except the sports and recreation merchandise division, as a result of a 4.2% decrease in comparable transactions, partially offset by an increase in average ticket of 2.9%.
E-commerce net sales represented 11.7% of merchandise sales for fiscal year 2025 compared to 10.5% for fiscal year 2024. E-commerce net sales increased 13.6% for fiscal year 2025 compared to fiscal year 2024.
Gross Margin. Gross margin increased $94.2 million, or 4.7%, to $2,105.6 million for fiscal year 2025 from $2,011.5 million for fiscal year 2024. As a percentage of net sales, gross margin increased 90 basis points from 33.9% in 2024 to 34.8% in 2025. The increase of 90 basis points in gross margin was primarily attributable to favorability in merchandise margin due to promotions and managing prices in response to increased tariff costs, while maintaining alignment with our value pricing strategy.
Selling, General and Administrative Expenses. SG&A expenses increased $120.6 million, or 8.2%, to $1,593.4 million in 2025 from $1,472.8 million in 2024, primarily as a result of our increased strategic investments of $109.0 million, including $84.8 million in new stores and $13.1 million in technology.
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Write-off of Deferred Loan Costs. Write-off of deferred loan costs decreased by $0.4 million for fiscal year 2025 when compared with fiscal year 2024, in connection with the amendment in the 2024 first quarter that led to the write-off of deferred loan costs on the ABL Facility.
Interest Expense. Interest expense decreased $0.7 million, or 1.8%, to $36.2 million in 2025 from $36.9 million in 2024, primarily driven by lower interest rates and a lower outstanding balance on our Term Loan.
Other Income, net. Other income, net, decreased $26.8 million in 2025 when compared to 2024, primarily driven by the settlement of a legal matter with a non-trade vendor that resulted in a net gain of approximately $15.0 million in 2024 (see Note 2) as well as lower interest rates in the current year.
Income Tax Expense. Income tax expense decreased $10.5 million to $109.3 million in 2025 as compared to $119.8 million in 2024, resulting primarily from a decrease in pre-tax income. ASO, Inc.'s effective tax rate for 2025 was 22.5% compared to 22.3% in 2024. The increase in effective tax rate was primarily driven by the decrease in pre-tax income in the current year.
Non-GAAP Measures
Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow, as shown below, have been presented in this Annual Report as supplemental measures of financial performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”). We define Adjusted EBITDA as net income (loss) before interest expense, net income tax expense and depreciation, amortization and impairment and other adjustments included in the table below. We define Adjusted EBIT as Adjusted EBITDA less depreciation and amortization. We describe these adjustments reconciling net income (loss) to Adjusted EBITDA and to Adjusted EBIT in the applicable table below. We define Adjusted Net Income as net income (loss), plus other adjustments included in the table below, less the tax effect of these adjustments. We define basic Adjusted Earnings per Share as Adjusted Net Income divided by the basic weighted average common shares outstanding during the period and diluted Adjusted Earnings per Share as Adjusted Net Income divided by the diluted weighted average common shares outstanding during the period. We describe these adjustments by reconciling net income (loss) to Adjusted Net Income and Adjusted Earnings per Share in the applicable table below. We describe Adjusted Free Cash Flow as net cash provided by (used in) operating activities less net cash used in investing activities. We describe this adjustment by reconciling net cash provided by operating activities to Adjusted Free Cash Flow in the applicable table below.
We believe Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Earnings per Share assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Earnings per Share are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management believes Adjusted Free Cash Flow is a useful measure of liquidity and an additional basis for assessing our ability to generate cash. Management uses Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions and to compare our performance against that of other peer companies using similar measures. Management has also historically used Adjusted EBIT as a performance target to establish and award discretionary annual incentive compensation.
Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow are not recognized terms under GAAP and should not be considered as an alternative to net income (loss) as a measure of financial performance or net cash provided by operating activities as a measure of liquidity, or any other performance measures derived in accordance with GAAP. Additionally, these measures are not intended to be a measure of free cash flow available for management’s discretionary use as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Earnings per Share should not be construed to imply th at our future results will be unaffected by unusual or non-recurring items. In evaluating Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow should not be construed to imply that our future results will be unaffected by any such adjustments.
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Our Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow measures have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
•Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Earnings per Share do not reflect costs or cash outlays for capital expenditures or contractual commitments;
•Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Earnings per Share do not reflect changes in, or cash requirements for, our working capital needs;
•Adjusted EBITDA and Adjusted EBIT do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt, and Adjusted Free Cash Flow does not reflect the cash requirements necessary to service principal payments on our debt;
•Adjusted EBITDA and Adjusted EBIT do not reflect period to period changes in taxes, income tax expense or the cash necessary to pay income taxes;
•Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income and Adjusted Earnings per Share do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA and Adjusted Free Cash Flow do not reflect cash requirements for such replacements; and
•other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.
Because of these limitations, Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow should not be considered as measures of discretionary cash available to invest in business growth or to reduce indebtedness. Management compensates for these limitations by primarily relying on our GAAP results in addition to using Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Share and Adjusted Free Cash Flow supplementally.
Adjusted EBITDA and Adjusted EBIT
The following table provides reconciliations of net income to Adjusted EBITDA and to Adjusted EBIT for the periods presented (amounts in thousands):

|  | Fiscal Year Ended
|  |  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Net income (a) |  | $ | 376,768 |  |  | $ | 418,447 |  |  | $ | 519,190 |
Interest expense, net |  | 36,214 |  |  | 36,873 |  |  | 46,051 |
Income tax expense |  | 109,289 |  |  | 119,778 |  |  | 143,966 |
Depreciation and amortization |  | 122,866 |  |  | 118,070 |  |  | 110,936 |
Equity compensation (b) |  | 21,176 |  |  | 26,629 |  |  | 24,377 |
Loss on early retirement of debt |  | — |  |  | — |  |  | 1,525 |
Write-off of deferred loan costs |  | — |  |  | 449 |  |  | — |
Adjusted EBITDA |  | $ | 666,313 |  |  | $ | 720,246 |  |  | $ | 846,045 |
Less: Depreciation and amortization |  | (122,866) |  |  | (118,070) |  |  | (110,936) |
Adjusted EBIT |  | $ | 543,447 |  |  | $ | 602,176 |  |  | $ | 735,109 |
(a) | Net income for the year ended February 1, 2025, includes a $15.0 million gain pertaining to a litigation settlement which occurred in the fourth quarter of 2024. Net income for the year ended February 3, 2024, includes a $15.9 million net gain relative to a credit card litigation settlement which occurred in the fourth quarter of 2023.
(b) | Represents non-cash charges related to equity based compensation, which vary from period to period depending on certain factors such as timing and valuation of awards, achievement of performance targets and equity award forfeitures.

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Adjusted Net Income and Adjusted Earnings per Share
The following table provides a reconciliation of net income to Adjusted Net Income and Adjusted Earnings per Share for the periods presented (amounts in thousands, except per share data):

|  |  | Fiscal Year Ended
|  |  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Net income (a) |  | $ | 376,768 |  |  | $ | 418,447 |  |  | $ | 519,190 |
Equity compensation (b) |  | 21,176 |  |  | 26,629 |  |  | 24,377 |
Loss on early retirement of debt |  | — |  |  | — |  |  | 1,525 |
Write-off of deferred loan costs |  | — |  |  | 449 |  |  | — |
Tax effects of these adjustments (c) |  | (4,761) |  |  | (6,038) |  |  | (5,621) |
Adjusted Net Income |  | $ | 393,183 |  |  | $ | 439,487 |  |  | $ | 539,471 |
Earnings per common share: |  |  |  |  |  |
Basic |  | $ | 5.66 |  |  | $ | 5.87 |  |  | $ | 6.89 |
Diluted |  | $ | 5.54 |  |  | $ | 5.73 |  |  | $ | 6.70 |
Adjusted Earnings per Share: |  |  |  |  |  |
Basic |  | $ | 5.90 |  |  | $ | 6.16 |  |  | $ | 7.16 |
Diluted |  | $ | 5.78 |  |  | $ | 6.02 |  |  | $ | 6.96 |
Weighted average common shares outstanding: |  |  |  |  |  |
Basic |  | 66,612 |  |  | 71,343 |  |  | 75,389 |
Diluted |  | 68,034 |  |  | 73,048 |  |  | 77,469 |
(a) | Net income for the year ended February 1, 2025, includes a $15.0 million gain pertaining to a litigation settlement which occurred in the fourth quarter of 2024. Net income for the year ended February 3, 2024, includes a $15.9 million net gain relative to a credit card litigation settlement which occurred in the fourth quarter of 2023.
(b) | Represents non-cash charges related to equity based compensation, which vary from period to period depending on certain factors such as timing and valuation of awards, achievement of performance targets and equity award forfeitures.
(c) | Represents the tax effect of the total adjustments made to arrive at Adjusted Net Income at our historical tax rate.

Adjusted Free Cash Flow
The following table provides a reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow for the periods presented (amounts in thousands):

|  |  | Fiscal Year Ended
|  |  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Net cash provided by operating activities |  | $ | 434,798 |  |  | $ | 528,082 |  |  | $ | 535,779 |
Net cash used in investing activities |  | (172,037) |  |  | (186,120) |  |  | (206,139) |
Adjusted Free Cash Flow |  | $ | 262,761 |  |  | $ | 341,962 |  |  | $ | 329,640 |

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Liquidity and Capital Resources
Sources and Uses of Liquidity
Our principal liquidity requirements are for working capital, capital expenditures and cash used to pay our debt obligations and related interest expense. We also use cash to pay dividends and to repurchase our common stock. We may fund our liquidity requirements through cash and cash equivalents, cash generated from operating activities, and borrowings under our ABL Facility (as defined below). On January 31, 2026, our cash and cash equivalents totaled $330.3 million. We believe our existing cash and cash equivalents, cash flows from operations, as well as availability under the ABL Facility, will be sufficient to fund our cash requirements for the foreseeable future.
Long-Term Debt
As of January 31, 2026, the Company's long-term debt consists of:
•Notes - 6.00% fixed rate senior secured notes with $400 million in principal outstanding and full principal maturing November 15, 2027;
•Term Loan - 7.72% variable rate term-loan with $85.8 million in principal outstanding maturing November 6, 2027 and requiring quarterly principal payments of $750 thousand through September 30, 2027; and
•ABL Facility - $1.0 billion commitment on a variable rate secured asset-based revolving credit facility with no principal outstanding maturing March 8, 2029.
See Note 4 to the accompanying financial statements for further disclosure regarding our debt agreements. The following table summarizes our current debt obligations by fiscal year (amounts in thousands):

| 2026 | 2027 | 2028 | 2029 | 2030 | Total
Term Loan and related interest (1) | $ | 9,159 |  | $ | 87,725 |  | $ | — |  | $ | — |  | $ | — |  | $ | 96,884 |
Notes and related interest (2) | 24,000 |  | 424,000 |  | — |  | — |  | — |  | 448,000 |
ABL Facility and related interest (3) | 2,500 |  | 2,500 |  | 2,500 |  | 268 |  | — |  | 7,768 |

(1) Interest payments do not include amortization of discount and debt issuance costs and are approximated based on projected interest rates and assume no unscheduled principal payments.
(2) Interest payments do not include amortization of debt issuance costs and assumes Notes are paid in full at maturity date.
(3) Assumes a minimum revolving credit commitment of $1.0 billion and no balances drawn on our ABL Facility.
Liquidity information related to the ABL Facility is as follows for the periods shown (amounts in thousands):

| Fiscal Year Ended
| January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Average funds drawn | $ | — |  |  | $ | 32 |  |  | $ | — |
Number of days with outstanding balance | — |  |  | 3 |  |  | — |
Maximum daily amount outstanding | $ | — |  |  | $ | 3,900 |  |  | $ | — |
Minimum available borrowing capacity | $ | 953,921 |  |  | $ | 955,495 |  |  | $ | 881,445 |

Liquidity information related to the ABL Facility (amounts in thousands) as of:

| January 31, 2026 |  | February 1, 2025
Outstanding borrowings | $ | — |  |  | $ | — |
Outstanding letters of credit | $ | 7,630 |  |  | $ | 9,258 |
Available borrowing capacity | $ | 992,370 |  |  | $ | 955,495 |

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Leases
We predominantly lease store locations, distribution centers, office space and certain equipment under operating leases expiring between fiscal years 2026 and 2045. Operating lease obligations include future minimum lease payments under all of our non-cancelable operating leases at January 31, 2026. In the fiscal year ended January 31, 2026, we opened 24 new locations. The following table summarizes our operating lease obligations by fiscal year:

| 2026 | 2027 | 2028 | 2029 | 2030 | After 2030 | Total
Operating lease payments (1) (2) | $ | 266,461 |  | $ | 265,364 |  | $ | 248,658 |  | $ | 232,185 |  | $ | 213,700 |  | $ | 1,141,396 |  | $ | 2,367,764 |

(1) Minimum lease payments have not been reduced by sublease rentals of $1.4 million due in the future under non-cancelable subleases.
(2) These balances include stores where we have an executed contract but have not taken possession of the location as of January 31, 2026.
Share Repurchases
On December 4, 2024, the Company's Board of Directors approved a new share repurchase program under which the Company is authorized to purchase up to $700 million of its outstanding shares during the three-year period ending December 4, 2027 (the “2024 Share Repurchase Program”), and which replaces the previously approved share repurchase program. Under the 2024 Share Repurchase Program, repurchases can be made using a variety of methods, which may include open market purchases, block trades, accelerated share repurchase programs, privately negotiated transactions and/or Rule 10b5-1 or other non-discretionary trading plans, all in compliance with the rules of the SEC and other applicable legal requirements. The timing, manner, price and amount of any common share repurchases under the 2024 Share Repurchase Program will be determined by the Company in its discretion and will depend on a variety of factors, including legal requirements, price and economic and market conditions. The 2024 Share Repurchase Program does not obligate the Company to acquire any particular number of common shares, and the program may be suspended, extended, modified or discontinued at any time. As of January 31, 2026, the Company had $436.6 million remaining for share repurchases under the 2024 Share Repurchase Program. See Note 2 to the consolidated financial statements.
The following table summarizes our share repurchases for the fiscal year ended January 31, 2026 (dollar amounts in thousands, except per share amounts):

|  | Total Number of Shares Purchased |  | Average Price Paid per Share (1) |  | Total Amount Repurchased (1)
First Quarter (February 2, 2025 to May 3, 2025) |  | 2,080,772 |  |  | $ | 47.59 |  |  | $ | 99,031 |
Second Quarter (May 4, 2025 to August 2, 2025) |  | — |  |  | — |  |  | — |
Third Quarter (August 3, 2025 to November 1, 2025) |  | — |  |  | — |  |  | — |
Fourth Quarter (November 2, 2025 to January 31, 2026) (2) |  | 1,849,900 |  |  | 54.03 |  |  | 99,947 |
Total Share Repurchase Activity |  | 3,930,672 |  |  | $ | 50.62 |  |  | $ | 198,978 |

(1) Excludes the impact of excise taxes.
(2) See Part II, Item 5 - Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities for further detail on the 2025 fourth quarter share repurchases.
Dividends
The following table summarizes our quarterly dividend payments for the fiscal year ended January 31, 2026 (amounts in thousands, except per share amounts):

|  | Dividends Paid per Share |  | Total Dividends Paid |  | Stockholder Date of Record
First Quarter (February 2, 2025 to May 3, 2025) |  | $ | 0.13 |  |  | $ | 8,716 |  |  | March 25, 2025
Second Quarter (May 4, 2025 to August 2, 2025) |  | $ | 0.13 |  |  | 8,649 |  |  | June 19, 2025
Third Quarter (August 3, 2025 to November 1, 2025) |  | $ | 0.13 |  |  | 8,663 |  |  | September 11, 2025
Fourth Quarter (November 2, 2025 to January 31, 2026) |  | $ | 0.13 |  |  | 8,629 |  |  | December 18, 2025
Total Dividends Paid |  |  |  | $ | 34,657 |  |  |

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On March 5, 2026, the Company announced that the Board of Directors declared a quarterly cash dividend with respect to the quarter ended January 31, 2026 of $0.15 per share of common stock, payable on April 10, 2026, to stockholders of record as of the close of business on March 20, 2026.
Capital Expenditures
The following table summarizes our capital expenditures for the periods shown (amounts in thousands):

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
New stores |  | $ | 119,902 |  |  | $ | 107,703 |  |  | $ | 100,419 |
Corporate, e-commerce, and information technology programs |  | 41,291 |  |  | 70,474 |  |  | 81,992 |
Existing stores, distribution centers and other |  | 51,475 |  |  | 21,412 |  |  | 25,359 |
Total capital expenditures |  | $ | 212,668 |  |  | $ | 199,589 |  |  | $ | 207,770 |

We expect capital expenditures for fiscal year 2026 to be between $200 million and $240 million. The following table summarizes our forecasted allocation of capital expenditures for fiscal year 2026:

|  | 2026
New stores |  | 60 | %
Corporate, e-commerce, and information technology programs |  | 20 | %
Existing stores, distribution centers and other |  | 20 | %

We review forecasted capital expenditures throughout the year and will adjust our capital expenditures based on business conditions at that time.
Cash Flows
Our Consolidated Statements of Cash Flows are summarized as follows (in thousands):

| Fiscal Year Ended
| January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Net cash provided by operating activities | $ | 434,798 |  |  | $ | 528,082 |  |  | $ | 535,779 |
Net cash used in investing activities | (172,037) |  |  | (186,120) |  |  | (206,139) |
Net cash used in financing activities | (221,370) |  |  | (400,953) |  |  | (318,865) |
Net increase (decrease) in cash and cash equivalents | $ | 41,391 |  |  | $ | (58,991) |  |  | $ | 10,775 |

Operating Activities. Cash flows from operating activities are seasonal in our business. Typically, cash flows from operations are used to build inventory in advance of peak selling seasons, with the fourth quarter pre-holiday inventory increase being the most significant.
Cash provided by operating activities in 2025 decreased $93.3 million compared to 2024. This decrease is attributable to:
•$41.7 million decrease in net income; and
•$99.9 million net decrease in cash flows provided by operating assets and liabilities; partially offset by
•$48.3 million net increase in non-cash charges, primarily related to increased deferred income taxes as a result of the enactment of the “OBBBA” (see Note 10).
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The decrease in cash flows from operating assets and liabilities was primarily attributable to:
•$118.7 million decrease in cash flows from working capital due to the pull-forward of inventory purchases at pre-tariff rates relative to the prior year period; and
•$20.6 million decrease in cash flows from accounts receivable due to timing of payments received; partially offset by
•$37.0 million increase in cash flows from prepaid expenses and other current assets, largely driven by timing of construction reimbursement payments received.
Investing Activities. Cash used in investing activities decreased $14.1 million in 2025 compared to 2024. The decrease in cash used in investing activities is primarily related to:
•$27.2 million in additional proceeds from sale-leaseback transactions in 2025 compared to 2024 (see Note 11); partially offset by
•$13.1 million increase in capital expenditures related to store properties purchased and subsequently sold as part of sale-leaseback transactions (see Note 11).
Financing Activities. Cash used in financing activities decreased $179.6 million in 2025 compared to 2024. The primary drivers of the decrease were:
•$165.9 million decrease in cash outflows for repurchases of common stock in 2025; and
•$10.5 million in proceeds received as of the end of fiscal year 2025 for the sale of a portion of rights to tariff relief litigation claims.
Future Liquidity
We expect our existing cash balances, internally generated cash flows and available borrowings under our ABL Facility to fulfill anticipated obligations such as capital expenditures, dividends, stock repurchases, working capital needs and scheduled debt maturities for the foreseeable future. As of January 31, 2026, we had $992.4 million of available capacity under our ABL Facility and $330.3 million of cash and cash equivalents. As discussed in Note 12, the Company previously sold a portion of its rights to potential tariff relief litigation claims and does not expect to receive refunds associated with the portion of the rights sold. Accordingly, the Company does not expect potential tariff refunds to represent a significant incremental future source of liquidity.
Critical Accounting Policies and Estimates
This discussion and analysis of financial condition and results of operations is based upon the Company's consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The preparation of these financial statements requires the Company to make estimates, judgments, and assumptions that can have a meaningful effect on the reporting of consolidated financial statements. See Note 2 to the accompanying financial statements for additional information.
Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions. The Company believes the following are its critical accounting estimates:
Merchandise Inventories
Description: Merchandise inventories are stated at the lower of weighted average cost and net realizable value. Merchandise inventories include the direct cost of merchandise (including tariffs), capitalized costs related to procurement, and warehousing and distribution. Merchandise inventories are reflected net of shrinkage, vendor allowances and other valuation reserves.
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Judgments and Uncertainties: We record an inventory reserve for the estimated shrinkage between physical inventories on a location by location basis. We perform a full physical inventory count for each store at least once a year, throughout the year, after which our shrinkage accrual rate to sales for each store is updated based on historical results. For vendor allowances based on contractual provisions, we develop accrual rates for receivables as determined by the agreements, which are typically linked to purchase volumes. Other non-contractual vendor allowances received are applied upon receipt. We regularly review inventories and record a valuation adjustment when necessary such as for inventory that has a carrying value in excess of the net realizable value or for slow moving or obsolete inventory.
Impact of Assumptions: For inventory shrinkage, our reserves may be inaccurate if our historical physical inventory shrinkage rates, used in our assumptions, differ significantly from actual rates due to consistent misses to our accrual. However, due to the frequency with which we perform full physical inventory counts, our assumptions are regularly updated, and we regularly analyze the physical inventory results to our accruals and, where necessary, adjust our store accruals to compensate for consistent patterns identified. We have not had a history of significant differences to our reserves for vendor allowances, and the assumptions generally do not have a significant impact on reserves since they are typically short-term and contractual in nature. We book a reserve for inventory permanently marked down below the inventory’s historical cost. Additionally, for slow moving or obsolete inventory, we book reserves based on historical margins received for marked down inventory with similarly slow historical sell-through rates. A 20% decrease in assumed margins used in these reserves would not have a material impact to our financial statements. We believe our long history of operations has given us sufficient data to enable us to accurately predict these reserves.
Impairment of long-lived assets
Description: We review the carrying value of long-lived assets, including property and equipment at our stores and right-of-use assets, for indicators of impairment regularly and whenever events and circumstances indicate that the carrying value of an asset may not be recoverable.
Judgments and Uncertainties: We test stores operating over a long enough time span, based on our previous store history for similar locations, to allow for meaningful analysis of future operating results. Recoverability of long-lived assets is measured by a comparison of the carrying amount of the assets to the estimated undiscounted future cash flows expected to be generated by the use of the assets, which is generally projected based on historical results. If such assets are considered to be impaired, the impairment loss recognized is the amount by which the carrying amount of the assets exceeds its estimated fair value, which is calculated using discounted expected future cash flows.
Impact of Assumptions: The assumptions used to project store impairment loss is based on projected future store income and considers variables such as historical and current trends, macroeconomic conditions, store location, and local economy and supply chain factors. Additionally, the long-term store income projections also contain a projection of future store specific costs such as store wages and advertising. Actual long-term income results could vary significantly from our projections due to a variety of reasons such as changes in the local retail environment or macroeconomic factors not used in our assumptions. In addition to variables considered in developing projected long-term store income, assumptions are made to develop the assumed discount rate based on company specific factors. There is significant judgment used in determining these assumptions used in the assessment of store impairment and variability in the assumptions could cause us to reach a materially different conclusion on impairment; however, we do not believe the net book value of any individual store assets are material to the Company’s operations. The Company has not recognized any long-lived asset impairment charges during 2025, 2024, or 2023.
Goodwill
Description: Goodwill represents the excess of the purchase price of an acquired business over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is tested for impairment annually or more frequently if events or circumstances indicate that the carrying value of goodwill may not be recoverable. We test for goodwill at the reporting unit level, which is the operating segment level. We operate in one operating segment with one reporting unit.
Judgments and Uncertainties: The annual goodwill impairment test provides for the option of first performing a qualitative assessment to evaluate the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If such a conclusion is reached, we would then be required to perform a quantitative impairment assessment of goodwill. However, if the qualitative assessment leads to a determination that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then no further assessments are required.
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Our quantitative assessment for determining the fair value of our reporting unit includes using an estimated discounted cash flow model (income approach) and market value approach. The output of this assessment is an estimated fair value for our reporting unit that is compared to its carrying value to determine whether an impairment charge is necessary. The income approach uses a discounted cash flow analysis of our projected long-term future company income, and the market value approach is based on earnings multiples for a comparable set of public companies as well as guideline transactions. These approaches use key input assumptions such as our projected future operating results, the discount rate, the weighting for each valuation approach and the comparable set of companies and transactions.
Impact of Assumptions: The assumptions used to project long-term company income consider variables such as historical and current trends, macroeconomic conditions, supply chain factors, projections consistent with the Company’s operating strategy, such as the future development of e-commerce and our assumptions used on future store openings, and other variables expected to impact future sales. Additionally, the long-term company income projections also contain a projection of future company costs such as wages, freight and transportation, and advertising. Actual long-term company income results could vary significantly from our projections due to a variety of reasons such as changes in the retail environment or macroeconomic factors not used in our assumptions. In addition to variables considered in developing projected long-term company income, assumptions are made to develop the discount rate, which is based on an assumed risk-free rate, and an equity risk premium developed from general historical market data and comparable companies. The earnings multiples and control premiums used in the market approach can vary dependent on which companies and guideline transactions are selected in our comparable set. A history of declining trends in our operating results such as comparable sales, gross margin, net income and cash flow from operations could impact these assumptions and serve as indicators of future impairment. There is significant judgment used in determining these assumptions used in the assessment of goodwill impairment and variability in the assumptions could cause us to reach a different conclusion on impairment. In 2025, we performed a qualitative impairment assessment and determined a quantitative assessment was not necessary. The Company has not recorded any impairment charges related to goodwill during 2025, 2024, or 2023.
Intangible Assets
Description: Intangible assets primarily consists of the trade name “Academy Sports + Outdoors” (the “Trade Name”). The Trade Name is expected to generate cash flows indefinitely and, therefore, is accounted for as an indefinite-lived asset not subject to amortization. The Trade Name is tested for impairment annually or whenever events or circumstances indicate that the carrying amount of the Trade Name may not be recoverable.
Judgments and Uncertainties: The annual Trade Name impairment test provides for the option of first performing a qualitative assessment to evaluate the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of an intangible asset is less than its carrying amount. If such a conclusion is reached, we would then be required to perform a quantitative impairment assessment for the Trade Name. However, if the qualitative assessment leads to a determination that it is more likely than not that the fair value of an intangible asset is greater than its carrying amount, then no further assessments are required.
Impairment is calculated as the excess of the Trade Name’s carrying value over its fair value. The fair value of the Trade Name is determined using the relief-from-royalty method, a variation of the income approach. This method assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets. Once a supportable royalty rate is determined, the rate is then applied to the projected long-term sales over the expected remaining life of the intangible assets to estimate the royalty savings. This approach is dependent on a number of factors, including projections of long-term sales, royalty rates, discount rates and other variables.
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Impact of Assumptions: The assumptions used to project long-term company sales consider variables such as historical and current trends, macroeconomic conditions, supply chain factors, projections consistent with the Company’s operating strategy, such as the future development of e-commerce and our assumptions used on future store openings, and other variables expected to impact future sales. Actual long-term income results could vary significantly from our projections due to a variety of reasons such as changes in the retail environment or macroeconomic factors not used in our assumptions. In addition to variables considered in developing projected long-term sales, assumptions are made to develop the royalty rates and discount rates. The royalty rates are based on market data where royalty rates are applicable and the discount rates are based on an assumed risk-free rate, and an equity risk premium based on general historical market data and comparable companies. A history of declining trends in our operating results such as comparable sales, gross margin, net income and cash flow from operations could impact these assumptions and serve as indicators of future impairment. There is significant judgment used in determining these assumptions on intangible asset impairment and variability in the assumptions could cause us to reach a different conclusion on impairment. In 2025, we performed a qualitative impairment assessment and determined a quantitative assessment was not necessary. The Company has not recorded any impairment charges related to intangible assets during fiscal 2025, fiscal 2024, or fiscal 2023.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 2 to the accompanying financial statements.
57

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
Our exposure to changes in interest rates primarily results from our Term Loan and ABL Facility, as these borrowings have variable interest rates. When appropriate, we also enter into fixed interest rate debt, such as the Notes, to limit the floating interest rate exposure on our long-term debt or historically we have used derivative financial instruments to mitigate the risk from such exposure. As of January 31, 2026, we do not have any derivative financial instruments outstanding. The detrimental effect of a hypothetical 100 basis point increase in interest rates on current borrowings under the Term Loan and ABL Facility would increase our interest expense by approximately $0.9 million.
Interim Results and Seasonality
Our business is subject to seasonal fluctuations. A significant portion of our net sales and profits is driven by summer holidays, such as Memorial Day, Father’s Day and Independence Day, during the second quarter. Our net sales and profits are also impacted by the July/August back-to-school selling season during the second and third quarters, the November/December holiday selling season, and in part by the sales of cold weather sporting goods and apparel during the fourth quarter.
Item 8. Financial Statements and Supplementary Data

The financial statements required to be filed hereunder are set forth on pages 64 through 97 of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
58

Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Our management, with the participation of our CEO and our CFO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on such evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this Annual Report, the design and operation of the Company's disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.
Management's Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. The Company's internal control over financial reporting includes:
•maintaining records that in reasonable detail accurately and fairly reflect our transactions;
•providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements;
•providing reasonable assurance that receipts and expenditures of Company assets are made in accordance with management authorization; and
•providing reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Also projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control—Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of the end of the period covered by this Annual Report.
Deloitte & Touche LLP, an independent registered public accounting firm, has issued an attestation report on the Company’s internal control over financial reporting which is set forth herein.
Changes in Internal Control over Financial Reporting
No changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the Company's most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
59

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Academy Sports and Outdoors, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Academy Sports and Outdoors, Inc. and subsidiaries (the “Company”) as of January 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended January 31, 2026, of the Company and our report dated March 17, 2026, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Houston, Texas
March 17, 2026
60

Item 9B. Other Information
Trading Plans
During the quarter ended January 31, 2026, no director or officer (as defined by Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).
61

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information concerning our executive officers is set forth under the heading “Information about our Executive Officers” in Part I of this report. Further information required by this item will be included in our definitive proxy statement for the 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
We have an insider trading policy governing the purchase, sale, and/or other dispositions of our securities by our directors, officers, and employees, or the Company, that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to us. A copy of our insider trading policy is incorporated by reference to Exhibit 19.1 to this Annual Report on Form 10-K.
Item 11. Executive Compensation
The information required by this item will be included in our definitive proxy statement for the 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
62

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table gives information about the Company's common stock that may be issued upon the exercise of options, warrants and rights under all of the Company's equity compensation plans as of January 31, 2026. The table includes the 2011 Unit Incentive Plan, the 2020 Omnibus Incentive Plan and the 2020 Employee Stock Purchase Plan.

Plan Category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted average exercise price of outstanding options, warrants and rights |  | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Service-Based Stock Options | 2,137,821 |  | $ | 28.24 |  |  | (1)
Performance-Based Stock Options | 119,619 |  | 16.57 |  |  | (1)
Service-Based Restricted Stock Units | 866,022 |  | N/A |  | (1)
Performance-Based Restricted Stock Units | 481,810 |  | N/A |  | (1)
2020 Employee Stock Purchase Plan | — |  | N/A |  | (1)
Total | 3,605,272 |  | $ | 27.62 |  | (2)

(1) Of the plans listed above, only the 2020 Omnibus Incentive Plan and the 2020 Employee Stock Purchase Plan allow for future grants of securities. The maximum number of shares that may be granted under the 2020 Omnibus Incentive Plan (inclusive of unissued shares that were carried over from the 2011 Unit Incentive Plan) is approximately 4,563,991. Stock options and restricted stock units are counted on a one-for-one basis. Total shares available for future issuance under the 2020 Omnibus Incentive Plan is 3,532,476. The total shares available for issuance under the 2020 Employee Stock Purchase Plan is 1,342,080.
(2) Weighted average exercise price of outstanding options only.
Additional information required by this item will be included in our definitive proxy statement for the 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item will be included in our definitive proxy statement for the 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services
The information required by this item will be included in our definitive proxy statement for the 2026 Annual Meeting of Stockholders and is incorporated herein by reference.
63

PART IV
Item 15. Exhibits and Financial Statements Schedules

(a) | The following documents are filed as part of this Annual Report on Form 10-K:
| (1) | Financial Statements. The consolidated Financial Statements required to be filed hereunder are listed in the Index to Consolidated Financial Statements on page 65 of this Annual Report on Form 10-K.
| (2) | Financial Statement Schedule. The consolidated financial statements schedule to be filed hereunder is included on page 103 of this Annual Report on Form 10-K. Other schedules have not been included because they are not applicable or because the information is included elsewhere in this report.
| (3) | Exhibits. The Exhibits listed in the Index to Exhibits, which appears on pages 98 to 101 and is incorporated herein by reference, are filed as part of this Annual Report on Form 10-K. Certain Exhibits are incorporated by reference from documents previously filed by the Company with the SEC pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, as amended.

64

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

| Page
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) | 66
Consolidated Balance Sheets as of January 31, 2026 and February 1, 2025 | 68
Consolidated Statements of Income for the fiscal years ended January 31, 2026, February 1, 2025 and February 3, 2024 | 69
Consolidated Statements of Stockholders' Equity for the fiscal years ended January 31, 2026, February 1, 2025 and February 3, 2024 | 70
Consolidated Statements of Cash Flows for the fiscal years ended January 31, 2026, February 1, 2025 and February 3, 2024 | 71
Notes to the Consolidated Financial Statements | 72

65

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Academy Sports and Outdoors, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Academy Sports and Outdoors, Inc. and subsidiaries (the "Company") as of January 31, 2026 and February 1, 2025, the related consolidated statements of income, stockholders' equity, and cash flows, for each of the three years in the period ended January 31, 2026, and the related notes and schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 31, 2026 and February 1, 2025, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2026, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 17, 2026 expressed an unqualified opinion on the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Merchandise Inventories - Refer to Note 2 to the financial statements
Critical Audit Matter Description
As described in Note 2 to the consolidated financial statements, the Company accounts for merchandise inventory at the lower of weighted average cost and net realizable value. Merchandise inventories include the direct cost of merchandise and capitalized costs related to procurement, warehousing and distribution. These costs include tariffs, payroll and benefits, distribution center occupancy costs, depreciation and freight. The total cost of merchandise inventories are recorded as a component of cost of goods sold at the time revenue is recognized.
66

We identified the calculation of the capitalized costs of procurement, warehouse and distribution cost as well as the direct costs of tariffs and freight included in merchandise inventory purchased by the Company as a critical audit matter. The Company calculates capitalized costs for procurement, warehouse and distribution costs based upon an estimate of inventoriable costs based upon the cost required to bring merchandise inventory to its present location and condition. The estimates in calculating the amount of procurement, warehousing and distribution costs to capitalize to inventory lead to the inherent subjectivity in management's judgment in estimating the total inventoriable costs, and high degree of auditor judgment and an increased extent of effort to test the Company's cost capitalization. The Company determines direct costs of tariffs and freight based upon actual amounts incurred. The merchandise inventory computations for tariffs and freight utilize critical inputs dependent on multiple information systems that capture and process high volume transactions. As a result of the number of inputs used to capture the high volume of transactions processed by the Company, auditing inventory requires extensive audit effort including significant involvement of more experienced audit team members.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to management’s judgment included the following, among others:
•We tested internal controls in place over capitalizing inventoriable costs of procurement, warehousing and distribution costs and management's process to evaluate the assumptions used in the process.
•We tested internal controls within the relevant business processes pertaining to tariffs and freight, including those in place to reconcile the various systems utilized to the Company’s general ledger.
•We evaluated the appropriateness and consistency of management’s methodology used in determining inventoriable costs and non-inventoriable costs in line with applicable accounting for inventory guidance and the basis for allocations.
•We selected samples from the capitalized inventoriable cost pools to vouch to source documents for accuracy.
•We evaluated the appropriateness of the amounts capitalized through our substantive analytical procedures by developing our independent expectation of the recorded amounts and comparing that with the actual balance.
•For a sample of inventory purchase transactions, we performed detail testing by agreeing the amounts of tariff and freight costs recognized to source documents and tested the mathematical accuracy of the recorded capitalized amounts.
•We evaluated the appropriateness of the costs capitalized for tariffs and freight through our substantive analytical procedures by developing our independent expectation of the recorded amounts and comparing that with the actual balance.
/s/ Deloitte & Touche LLP
Houston, Texas
March 17, 2026
We have served as the Company's auditor since 1996.
67

ACADEMY SPORTS AND OUTDOORS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except per share data)

| January 31, 2026 |  | February 1, 2025
ASSETS |  |  |
CURRENT ASSETS: |  |  |
Cash and cash equivalents | $ | 330,320 |  |  | $ | 288,929 |
Accounts receivable - less allowance for doubtful accounts of $1,792 and $2,752, respectively | 34,755 |  |  | 16,759 |
Merchandise inventories | 1,503,756 |  |  | 1,308,840 |
Prepaid expenses and other current assets | 82,457 |  |  | 95,621 |
Assets held for sale | 2,957 |  |  | — |
Total current assets | 1,954,245 |  |  | 1,710,149 |
PROPERTY AND EQUIPMENT, NET | 584,103 |  |  | 525,136 |
RIGHT-OF-USE ASSETS | 1,234,246 |  |  | 1,173,075 |
TRADE NAME | 579,766 |  |  | 579,007 |
GOODWILL | 861,920 |  |  | 861,920 |
OTHER NONCURRENT ASSETS | 62,756 |  |  | 51,676 |
Total assets | $ | 5,277,036 |  |  | $ | 4,900,963 |
LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |
CURRENT LIABILITIES: |  |  |
Accounts payable | $ | 637,854 |  |  | $ | 612,424 |
Accrued expenses and other current liabilities | 243,908 |  |  | 230,323 |
Current lease liabilities | 147,491 |  |  | 115,134 |
Current maturities of long-term debt | 3,000 |  |  | 3,000 |
Total current liabilities | 1,032,253 |  |  | 960,881 |
LONG-TERM DEBT, NET | 480,793 |  |  | 482,679 |
LONG-TERM LEASE LIABILITIES | 1,261,167 |  |  | 1,185,741 |
DEFERRED TAX LIABILITIES, NET | 300,654 |  |  | 256,815 |
OTHER LONG-TERM LIABILITIES | 30,792 |  |  | 10,812 |
Total liabilities | 3,105,659 |  |  | 2,896,928 |
COMMITMENTS AND CONTINGENCIES (NOTE 12) |  |  |
STOCKHOLDERS' EQUITY: |  |  |
Preferred stock, $0.01 par value, authorized 50,000,000 shares; none issued and outstanding | — |  |  | — |
Common stock, $0.01 par value, authorized 300,000,000 shares; 64,945,953 and 68,332,961 issued and outstanding as of January 31, 2026 and February 1, 2025, respectively | 649 |  |  | 683 |
Additional paid-in capital | 256,351 |  |  | 247,094 |
Retained earnings | 1,914,377 |  |  | 1,756,258 |
Stockholders' equity | 2,171,377 |  |  | 2,004,035 |
Total liabilities and stockholders' equity | $ | 5,277,036 |  |  | $ | 4,900,963 |

See Notes to Consolidated Financial Statements
68

ACADEMY SPORTS AND OUTDOORS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)

| Fiscal Year Ended
| January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
NET SALES | $ | 6,053,414 |  |  | $ | 5,933,450 |  |  | $ | 6,159,291 |
COST OF GOODS SOLD | 3,947,801 |  |  | 3,921,990 |  |  | 4,049,080 |
GROSS MARGIN | 2,105,613 |  |  | 2,011,460 |  |  | 2,110,211 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 1,593,429 |  |  | 1,472,821 |  |  | 1,432,356 |
OPERATING INCOME | 512,184 |  |  | 538,639 |  |  | 677,855 |
INTEREST EXPENSE, NET | 36,214 |  |  | 36,873 |  |  | 46,051 |
WRITE-OFF OF DEFERRED LOAN COSTS | — |  |  | 449 |  |  | 1,525 |
OTHER INCOME, NET | 10,087 |  |  | 36,908 |  |  | 32,877 |
INCOME BEFORE INCOME TAXES | 486,057 |  |  | 538,225 |  |  | 663,156 |
INCOME TAX EXPENSE | 109,289 |  |  | 119,778 |  |  | 143,966 |
NET INCOME | $ | 376,768 |  |  | $ | 418,447 |  |  | $ | 519,190 |
EARNINGS PER COMMON SHARE: |  |  |  |  |
BASIC | $ | 5.66 |  |  | $ | 5.87 |  |  | $ | 6.89 |
DILUTED | $ | 5.54 |  |  | $ | 5.73 |  |  | $ | 6.70 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |  |  |  |  |
BASIC | 66,612 |  |  | 71,343 |  |  | 75,389 |
DILUTED | 68,034 |  |  | 73,048 |  |  | 77,469 |

See Notes to Consolidated Financial Statements
69

ACADEMY SPORTS AND OUTDOORS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Amounts in thousands)

| Common Stock |  | Additional Paid-In Capital |  | Retained Earnings |  |  |  | Total Stockholders' Equity
| Shares |  | Amount |  | Amount |  | Amount |  |  |  | Amount
Balances as of January 28, 2023 | 76,712 |  |  | $ | 767 |  |  | $ | 216,209 |  |  | $ | 1,411,330 |  |  |  |  | $ | 1,628,306 |
Net income | — |  |  | — |  |  | — |  |  | 519,190 |  |  |  |  | 519,190 |
Equity compensation | — |  |  | — |  |  | 24,377 |  |  | — |  |  |  |  | 24,377 |
Repurchase of common stock for retirement | (3,652) |  |  | (36) |  |  | (12,625) |  |  | (191,493) |  |  |  |  | (204,154) |
Settlement of vested Restricted Stock Units | 227 |  |  | 2 |  |  | (5,538) |  |  | — |  |  |  |  | (5,536) |
Issuance of common stock under employee stock purchase plan | 124 |  |  | 1 |  |  | 5,483 |  |  | — |  |  |  |  | 5,484 |
Stock option exercises | 939 |  |  | 9 |  |  | 14,192 |  |  | — |  |  |  |  | 14,201 |
Cash dividends declared, $0.09 per share | — |  |  | — |  |  | — |  |  | (27,218) |  |  |  |  | (27,218) |
Balances as of February 3, 2024 | 74,350 |  |  | $ | 743 |  |  | $ | 242,098 |  |  | $ | 1,711,809 |  |  |  |  | $ | 1,954,650 |
Net income | — |  |  | — |  |  | — |  |  | 418,447 |  |  |  |  | 418,447 |
Equity compensation | — |  |  | — |  |  | 26,629 |  |  | — |  |  |  |  | 26,629 |
Repurchase of common stock for retirement | (6,544) |  |  | (65) |  |  | (25,738) |  |  | (342,535) |  |  |  |  | (368,338) |
Settlement of vested Restricted Stock Units, net of shares withheld | 210 |  |  | 2 |  |  | (5,397) |  |  | — |  |  |  |  | (5,395) |
Issuance of common stock under employee stock purchase plan | 118 |  |  | 1 |  |  | 5,247 |  |  | — |  |  |  |  | 5,248 |
Stock option exercises, net of shares withheld | 199 |  |  | 2 |  |  | 4,255 |  |  | — |  |  |  |  | 4,257 |
Cash dividends declared, $0.11 per share | — |  |  | — |  |  | — |  |  | (31,463) |  |  |  |  | (31,463) |
Balances as of February 1, 2025 | 68,333 |  |  | $ | 683 |  |  | $ | 247,094 |  |  | $ | 1,756,258 |  |  |  |  | $ | 2,004,035 |
Net income | — |  |  | — |  |  | — |  |  | 376,768 |  |  |  |  | 376,768 |
Equity compensation | — |  |  | — |  |  | 21,176 |  |  | — |  |  |  |  | 21,176 |
Repurchase of common stock for retirement | (3,931) |  |  | (39) |  |  | (16,753) |  |  | (183,992) |  |  |  |  | (200,784) |
Settlement of vested Restricted Stock Units, net of shares withheld | 236 |  |  | 2 |  |  | (4,758) |  |  | — |  |  |  |  | (4,756) |
Issuance of common stock under employee stock purchase plan | 133 |  |  | 1 |  |  | 5,184 |  |  | — |  |  |  |  | 5,185 |
Stock option exercises, net of shares withheld | 175 |  |  | 2 |  |  | 4,408 |  |  | — |  |  |  |  | 4,410 |
Cash dividends declared, $0.13 per share | — |  |  | — |  |  | — |  |  | (34,657) |  |  |  |  | (34,657) |
Balances as of January 31, 2026 | 64,946 |  |  | 649 |  |  | 256,351 |  |  | 1,914,377 |  |  |  |  | 2,171,377 |

See Notes to Consolidated Financial Statements
70

ACADEMY SPORTS AND OUTDOORS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

|  | Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |  |  |  |
Net income |  | $ | 376,768 |  |  | $ | 418,447 |  |  | $ | 519,190 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |
Depreciation and amortization |  | 122,866 |  |  | 118,070 |  |  | 110,936 |
Non-cash lease expense |  | 46,212 |  |  | 30,295 |  |  | 16,723 |
Equity compensation |  | 21,176 |  |  | 26,629 |  |  | 24,377 |
Amortization of deferred loan and other costs |  | 2,590 |  |  | 2,574 |  |  | 2,739 |
Deferred income taxes |  | 43,839 |  |  | 2,020 |  |  | (4,247) |
Non-cash loss on early retirement of debt |  | — |  |  | — |  |  | 1,525 |
Write-off of Deferred Loan Costs |  | — |  |  | 449 |  |  | — |
Gain on disposal of property and equipment |  | (15,417) |  |  | (7,062) |  |  | (388) |
Changes in assets and liabilities: |  |  |  |  |  |
Accounts receivable, net |  | (17,995) |  |  | 2,611 |  |  | (2,868) |
Merchandise inventories |  | (194,916) |  |  | (114,681) |  |  | 89,358 |
Prepaid expenses and other current assets |  | 26,915 |  |  | (10,117) |  |  | (50,225) |
Other noncurrent assets |  | (12,556) |  |  | (12,437) |  |  | (18,761) |
Accounts payable |  | 27,335 |  |  | 65,761 |  |  | (142,346) |
Accrued expenses and other current liabilities |  | 17,128 |  |  | 11,952 |  |  | (26,712) |
Income taxes payable |  | (19,062) |  |  | (5,277) |  |  | 17,640 |
Other long-term liabilities |  | 9,915 |  |  | (1,152) |  |  | (1,162) |
Net cash provided by operating activities |  | 434,798 |  |  | 528,082 |  |  | 535,779 |
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |  |  |  |
Capital expenditures |  | (212,668) |  |  | (199,589) |  |  | (207,770) |
Purchases of intangible assets |  | (759) |  |  | (771) |  |  | (520) |
Proceeds from the sale of property and equipment |  | 41,390 |  |  | 14,240 |  |  | 2,151 |
Net cash used in investing activities |  | (172,037) |  |  | (186,120) |  |  | (206,139) |
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |  |  |  |
Proceeds from Revolving Credit Facilities |  | — |  |  | 3,900 |  |  | — |
Reduction in Revolving Credit Facilities |  | — |  |  | (3,900) |  |  | — |
Repayment of Term Loan |  | (3,000) |  |  | (3,000) |  |  | (103,000) |
Debt issuance fees |  | — |  |  | (5,689) |  |  | — |
Proceeds from exercise of stock options |  | 4,399 |  |  | 4,323 |  |  | 16,636 |
Proceeds from issuance of common stock under employee stock purchase program |  | 5,185 |  |  | 5,248 |  |  | 5,484 |
Taxes paid related to net share settlement of equity awards |  | (4,784) |  |  | (5,460) |  |  | (7,971) |
Repurchase of common stock for retirement |  | (198,978) |  |  | (364,912) |  |  | (202,796) |
Dividends paid |  | (34,657) |  |  | (31,463) |  |  | (27,218) |
Other financing activities |  | 10,465 |  |  | — |  |  | — |
Net cash used in financing activities |  | (221,370) |  |  | (400,953) |  |  | (318,865) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |  | 41,391 |  |  | (58,991) |  |  | 10,775 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |  | 288,929 |  |  | 347,920 |  |  | 337,145 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD |  | $ | 330,320 |  |  | $ | 288,929 |  |  | $ | 347,920 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |  |  |  |  |  |
Cash paid for interest |  | $ | 35,086 |  |  | $ | 34,897 |  |  | $ | 45,446 |
Cash paid for income taxes, net |  | $ | 37,821 |  |  | $ | 88,401 |  |  | $ | 132,126 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: |  |  |  |  |  |
Non-cash capital expenditures |  | $ | 10,368 |  |  | $ | 12,273 |  |  | $ | 6,687 |
Right-of-use assets obtained in exchange for new operating leases |  | $ | 244,100 |  |  | $ | 214,747 |  |  | $ | 134,181 |

See Notes to Consolidated Financial Statements
71

ACADEMY SPORTS AND OUTDOORS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.Nature of Operations
The Company
All references to “we”, “us”, “our” or the “Company” in the financial statements refer to Academy Sports and Outdoors, Inc., a Delaware corporation (“ASO, Inc.”) and the current parent holding company of our operations, and its consolidated subsidiaries. We conduct our operations primarily through our parent holding company's indirect subsidiary, Academy, Ltd., a Texas limited partnership doing business as “Academy Sports + Outdoors”, or Academy, Ltd. All of the Company’s sales and business operations occur at Academy, Ltd., and Academy, Ltd. is also the borrower and/or issuer of the Company’s long-term debt and the lessee of the Company's facilities.
The Company is a leading full-line sporting goods and outdoor recreation retailer in the United States in terms of net sales. As of January 31, 2026, we operated 322 “Academy Sports + Outdoors” retail locations in 21 states and three distribution centers located in Katy, Texas, Twiggs County, Georgia and Cookeville, Tennessee. Our distribution centers receive, store and ship merchandise to our stores and customers. We also sell merchandise to customers across most of the United States via our academy.com website.
Fiscal Year
The Company’s fiscal year represents the 52 or 53 weeks ending on the Saturday closest to January 31 each year. References herein to 2025 relate to the 52-week fiscal year ended January 31, 2026, and references herein to 2024 and 2023 relate to the 52-week fiscal year ended February 1, 2025 and the 53-week fiscal year ended February 3, 2024, respectively.
2.Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
These consolidated financial statements include the accounts of ASO, Inc. and its subsidiaries, New Academy Holding Company, LLC (“NAHC”), Academy Managing Co., LLC, Associated Investors, LLC, Academy, Ltd., the Company's operating company, Academy International Limited, Mason Creek Insurance Co., LLC, and Academy Procurement Co., LLC. NAHC, Academy Managing Co., LLC, and Associated Investors, LLC are intermediate holding companies. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Our management bases its estimates on historical experience and other assumptions it believes to be reasonable under the circumstances. Actual results could differ significantly from those estimates. Our most significant estimates and assumptions that materially affect the financial statements involve difficult, subjective or complex judgments by management, including the valuation of merchandise inventories and performing goodwill, intangible and long-lived asset impairment analyses.
Cash and Cash Equivalents
We consider credit and debit card transactions, which typically settle within three business days, demand deposits with banks, and all other highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents.
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Financial Instruments
Financial instruments are comprised of cash and cash equivalents, accounts receivable, accounts payable, certain accrued liabilities and debt. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short-term nature of those instruments. The fair value of debt is influenced by fluctuations in market conditions for interest rates (see Note 5).
Accounts Receivable
Accounts receivable consists primarily of amounts due from vendors for vendor allowances and other accounts receivable. We provide an allowance for doubtful accounts based on both historical experience and a specific identification basis.
Concentration of Risk
Financial instruments which subject us to potential credit risk consist of cash and cash equivalents. We have established guidelines to limit our exposure to credit risk on cash and cash equivalents by placing investments with high credit quality financial institutions. Deposits with these financial institutions may exceed the amount of insurance provided; however, these deposits typically are redeemable upon demand. We believe that the financial risks associated with these financial instruments are minimal.
We purchase merchandise inventories from approximately 1,500 vendors. For 2025, 2024 and 2023, no vendor represented more than 12% of our total purchases. We typically do not enter into long-term inventory purchase commitments, and we did not have any such commitments as of January 31, 2026 or February 1, 2025.
A significant portion of our inventory purchases are manufactured outside of the United States, primarily in Asia. While we are not dependent on any single manufacturer outside of the United States, we could be adversely affected by political, health (including pandemic), safety, security, economic, tariff, climate, war or other disruptions affecting the business or operations of third-party manufacturers located outside of the United States.
The Company’s geographic concentration in the southern United States subjects us to certain regional risks, such as the state of regional economies, including downturns in the housing market, increased unemployment and gas prices. Other regional risks include legislation, politics, cultural views, severe weather conditions or man-made disasters (such as an oil spill closing large areas of hunting or fishing), fires, heat waves, freezes, hurricanes, tornadoes, large storms and floods and other natural disasters specific to the states in which the Company operates.
Merchandise Inventories, net
Merchandise inventories are stated at the lower of weighted average cost and net realizable value. Merchandise inventories include the direct cost of merchandise and capitalized costs related to procurement, warehousing and distribution and are reflected net of shrinkage, vendor allowances and other valuation reserves. We record an inventory reserve for the estimated shrinkage between physical inventories on a by-location basis. We generally perform a full physical inventory count for each store at least once a year, throughout the year, after which our shrinkage accrual rate for each store is updated based on historical results. For vendor allowances based on contractual provisions, we develop accrual rates as determined by the agreements, which are typically linked to purchase volumes. Other non-contractual vendor allowances received are applied upon receipt. We regularly review inventories and record a valuation adjustment when necessary such as for inventory that has a carrying value in excess of the net realizable value or for slow moving or obsolete inventory.
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Supplier Finance Programs
We have previously entered into a supply chain financing arrangement with a third-party financial institution, whereby certain suppliers have the ability to settle outstanding payment obligations earlier than the due date required by our original supplier terms. Subsequently, we settle invoices with the financial institution within 45 days, which approximates our original supplier terms. The Company does not have an economic interest in suppliers’ voluntary participation, does not provide any guarantees or pledge assets under these arrangements, and our rights and obligations to our suppliers, including amounts due, are not impacted. The following table shows our liability associated with these arrangements, which is presented within Accounts Payable on the Consolidated Balance Sheets, and the related activity for the periods presented (amounts in thousands):

|  | January 31, 2026 |  | February 1, 2025
Invoices outstanding at the beginning of the year |  | $ | 3,751 |  |  | $ | 7,174 |
Invoices added |  | 14,641 |  |  | 29,190 |
Invoices paid |  | (16,164) |  |  | (32,613) |
Invoices outstanding at the end of the year |  | $ | 2,228 |  |  | $ | 3,751 |

Property and Equipment
Property and equipment are recorded at cost less accumulated depreciation. Cost includes interest capitalized on borrowings used to finance the construction of stores and other significant capital projects while under construction. Depreciation is computed using the straight-line method over the asset’s useful life, which is generally determined by asset category as follows:

Leasehold improvements |  | Lesser of asset useful life or lease term
Software and computer equipment |  | 2–5 years
Other equipment |  | 5–10 years
Furniture and fixtures |  | 7–10 years
Buildings |  | 40 years

When assets are retired or sold, the cost and accumulated depreciation are removed from our accounts, and the resulting gain or loss is reflected in the Consolidated Statements of Income. Repair and maintenance costs are charged to expense as incurred and significant improvements that substantially enhance the useful life or enhance the functionality of an asset are capitalized and amortized.
In the normal course of business, we may purchase or acquire land and stores to be sold to and leased from third party landlords. Assets that are not yet sold to and leased from third parties are classified as assets held for sale. As of January 31, 2026, Assets Held for Sale on the Consolidated Balance Sheets were comprised of $3.0 million of land that is expected to be sold within one year.
Capitalized Computer Software Costs
We capitalize certain costs incurred in connection with developing or obtaining computer software for internal use. Capitalized computer software costs are included in Property and Equipment on the Consolidated Balance Sheets. The amounts capitalized were $20.5 million, $29.0 million and $33.3 million in 2025, 2024 and 2023, respectively.
Implementation costs for cloud-based information systems are capitalized in Other Noncurrent Assets. Amortization of cloud-based software implementation costs is recognized in Selling, General and Administrative Expenses and Cost of Goods Sold, which is amortized over the longer of the contract term or expected benefit. The amounts capitalized were $22.5 million, $20.6 million and $23.5 million in 2025, 2024 and 2023, respectively.
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Impairment of Long-Lived Assets
We review the carrying value of long-lived assets, including store assets, for indicators of impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of long-lived assets is measured by a comparison of the carrying amount of the assets to the estimated undiscounted future cash flows expected to be generated by the use of the assets, which is generally projected based on historical results. If such assets are considered to be impaired, the impairment loss recognized is the amount by which the carrying amount of the assets exceeds its estimated fair value, which is calculated using discounted expected future cash flows. As a result of our assessment, we did not record an impairment of long-lived assets in 2025, 2024 and 2023.
Goodwill
Goodwill represents the excess of the purchase price of an acquired business over the amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is tested for impairment annually or more frequently if events or circumstances indicate that the carrying value of goodwill may not be recoverable. We test for goodwill at the reporting unit level, which is the operating segment level. We operate in one operating segment with one reporting unit.
The annual goodwill impairment test provides for the option of first performing a qualitative assessment to evaluate the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If such a conclusion is reached, we would then be required to perform a quantitative impairment assessment of goodwill. However, if the qualitative assessment leads to a determination that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then no further assessments are required.
Our quantitative assessment for determining the fair value of our reporting unit includes using an estimated discounted cash flow model (income approach) and market value approach. The output of this assessment is an estimated fair value for our reporting unit that is compared to its carrying value to determine whether an impairment charge is necessary. The income approach uses a discounted cash flow analysis of our projected long-term future company income. The market valu e approach is based on earnings multiples for a comparable set of public companies as well as guideline transactions.
We did not record an impairment of goodwill for 2025, 2024 or 2023.
Intangible Assets
Intangible assets primarily consists of the trade name “Academy Sports + Outdoors” (the “Trade Name”). The Trade Name is expected to generate cash flows indefinitely and, therefore, is accounted for as an indefinite-lived asset not subject to amortization.
The Trade Name is tested for impairment annually or whenever events or circumstances indicate that the carrying amount of the Trade Name may not be recoverable. The annual Trade Name impairment test provides for the option of first performing a qualitative assessment to evaluate the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of an intangible asset is less than its carrying amount. If such a conclusion is reached, we would then be required to perform a quantitative impairment assessment for the Trade Name. However, if the qualitative assessment leads to a determination that it is more likely than not that the fair value of an intangible asset is greater than its carrying amount, then no further assessments are required.
Impairment is calculated as the excess of the Trade Name’s carrying value over its fair value. The fair value of the Trade Name is determined using the relief-from-royalty method, a variation of the income approach. This method assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets. Once a supportable royalty rate is determined, the rate is then applied to the projected long-term sales over the expected remaining life of the intangible assets to estimate the royalty savings. This approach is dependent on a number of factors, including projections of long-term sales, royalty rates, discount rates and other variables.
We did not record an impairment of intangible assets for 2025, 2024 or 2023.
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Deferred Loan Costs
Costs incurred to issue debt are deferred and recorded in the Consolidated Balance Sheets. Those costs related to the issuance of our term loan and senior notes are recorded in long-term debt, net of current maturities and amortized as a component of interest expense over the terms of the related debt agreement using the effective interest method. The costs related to the issuance of our revolving credit facility is recorded in Other Noncurrent Assets on the Consolidated Balance Sheets and amortized as a component of interest expense over the terms of the related debt agreements using the straight-line method.
Self-Insurance
We maintain deductibles or self-insured retentions for workers' compensation, general liability and employee health benefits. The Company has a wholly owned captive insurance subsidiary (the “Captive”) with the primary purpose to enhance the Company's risk financing strategies by providing the Company the opportunity to negotiate insurance premiums in the non-retail insurance market. The Captive must maintain a sufficient level of liquidity to fund future reserve payments and secure the insurer's obligations for workers compensation, Texas non-subscriber, general liability, directors and officers liability, employment practices liability, and medical stop-loss programs. Additionally, we use the services of an independent actuary to assist in determining losses associated with workers' compensation, general liability and employee health benefits. Liabilities associated with these losses are actuarially derived and estimated in part by considering historical claims experience, industry factors, severity factors, claim development, as well as other actuarial assumptions. If actual trends, including the severity or frequency of claims, medical cost inflation or fluctuations in premiums, differ from our estimates, it could have a material adverse impact on our results of operations. Changes in legal claims, claim development, trends and interpretations, variability in inflation rates, changes in the nature and method of claims settlement, benefit level changes due to changes in applicable laws, insolvency of insurance carriers and changes in discount rates could all adversely affect our ultimate expected losses. We believe the actuarial valuation provides the best estimate of the ultimate expected losses, and we have recorded the present value of the actuarially determined ultimate losses for the insurance related liabilities mentioned above.
Leases
We account for our leases in accordance with Accounting Standards Codification (“ASC”) 842 which requires that lessees recognize assets and liabilities arising from operating leases on the balance sheet and disclose key information about leasing arrangements.
Nearly all of our store locations and all of our corporate office facilities, and warehouse and distribution centers are leased. We may receive reimbursement from a landlord for some or all of the cost of a construction project, which may be structured as a tenant improvement allowance or a construction allowance. Cash received from a landlord for tenant improvement allowances in store lease transactions is a reduction to the Right-of-Use Assets on the Consolidated Balance Sheets, which is amortized ratably over the remaining terms of the corresponding leases. Cash received for construction allowances is a reimbursement of certain spend incurred in the construction of the premises on behalf of the landlord, where the landlord owns the assets. In 2025 and 2024, we entered into multiple sale-leaseback transactions which qualified for sale accounting under ASC 606. Further, per ASC 842, a gain was recognized up to the fair value of the assets (see Note 11).
We account for each lease and non-lease components for our building leases as a single lease component which allows certain costs such as common area maintenance associated with these leases to be included as rent expense. Per ASC 842, costs associated with leases with contract terms of 12 months or less are recognized on a straight-line basis over the lease term with no associated balance sheet lease liability or right-of-use asset.
Net Sales
We sell merchandise under implicit contracts whereby the transaction price is the listed sales price less any discounts or coupons applied. Our typical coupons offer a discount, which is applied immediately at the time of purchase. However, under certain circumstances we may issue a coupon, or similar incentive, which may contain a material future right.
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Revenue from merchandise sales is recognized, net of sales tax, when the Company’s performance obligation to the customer is met, which is when the Company transfers control of the merchandise to the customer. Store merchandise sales are recognized at the point of sale. For e-commerce sales, significant judgment is applied in determining when the transfer of control occurs, which we believe occurs upon customer receipt, and accordingly online merchandise sales are recognized upon delivery of the merchandise to the customer. The Company does not extend a material amount of credit. The sales return allowance, which is our provision for anticipated merchandise returns, is provided through a reduction of sales and cost of goods sold on a gross basis in the period that the related sales are recorded. The sales return allowance and related liability are included in Merchandise Inventories and in Accrued Expenses and Other Current Liabilities, respectively, in our Consolidated Balance Sheets. Merchandise returns are estimated based on historical experience.
Cost of Goods Sold
Cost of goods sold includes the direct cost of merchandise and costs related to procurement, warehousing and distribution. These costs consist primarily of tariffs, payroll and benefits, distribution center occupancy costs, depreciation and freight.
Shipping and Handling Costs
Shipping and handling costs billed to customers are included in net sales. Shipping and handling costs that we incur associated with shipping products to customers are included in Cost of Goods Sold.
Vendor Allowances
Vendor allowances include volume purchase rebates, promotional and advertising allowances, cooperative advertising funds and support for new store openings. These allowances are generally determined for each fiscal year. Allowances related to the purchase of merchandise inventories are recorded as a reduction of cost of goods sold as the related merchandise is sold. Allowances for cooperative advertising and promotion programs and other expenses are recorded in selling, general and administrative expenses as a reduction of the related costs as the related expense is incurred. Any such allowance in excess of actual costs incurred that are included in selling, general and administrative expenses, or that do not require proof of performance, are recorded as a reduction of cost of sales. For volume purchase rebates, we record an estimate of vendor allowances earned based on the latest projected purchase volumes.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include store and corporate administrative payroll and payroll benefits, store and corporate headquarters occupancy costs, depreciation, advertising, credit card processing, information technology, pre-opening costs and other store and administrative expenses.
Selling, general, and administrative expenses on the Consolidated Statements of Income include gains of approximately $15.4 million in 2025 and $7.1 million in 2024 related to multiple sale-leaseback transactions which qualified for sale accounting under ASC 606 (see Note 11).
Advertising Expenses
Advertising costs are expensed as incurred. Advertising expenses, net of specific vendor allowances, were $169.8 million, $155.7 million and $153.7 million in 2025, 2024 and 2023, respectively.
Pre-Opening Expenses
Non-capital expenditures associated with opening new stores and distribution centers prior to sales generation or start of operations, which consist primarily of occupancy costs, marketing, payroll and recruiting costs, are expensed as incurred. The following table summarizes our pre-opening expense activity for the periods presented:

| Fiscal Year Ended
| January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Number of new stores opened | 24 |  |  | 16 |  |  | 14 |
Pre-opening expenses (in millions) | $ | 14.6 |  |  | $ | 13.9 |  |  | $ | 8.3 |

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Equity Compensation
We account for equity compensation in accordance with ASC 718, which requires the measurement and recognition of compensation expense for all equity awards made to employees based on estimated fair values on the grant date. Option equity award fair values are estimated on the date of grant using an option-pricing model and restricted unit fair values are based on the estimated unit price on the date of the grant. For awards with service-based vesting requirements only, the fair value of the award is recognized as expense over the requisite service period, and for awards with performance-based vesting requirements, the fair value of the award ultimately expected to meet the performance target is recognized as expense over the service period. We recognize forfeitures as they occur.
Share Repurchases
On December 4, 2024, the Company's Board of Directors approved a new share repurchase program under which the Company is authorized to purchase up to $700 million of its outstanding shares during the three-year period ending December 4, 2027 (the “2024 Share Repurchase Program”), and which replaces the previously approved share repurchase program. Under the 2024 Share Repurchase Program, repurchases can be made using a variety of methods, which may include open market purchases, block trades, accelerated share repurchase programs, privately negotiated transactions and/or Rule 10b5-1 or other non-discretionary trading plans, all in compliance with the rules of the SEC and other applicable legal requirements. The timing, manner, price and amount of any common share repurchases under the 2024 Share Repurchase Program will be determined by the Company in its discretion and will depend on a variety of factors, including legal requirements, price, economic and market conditions. The 2024 Share Repurchase Program does not obligate the Company to acquire any particular number of common shares, and the program may be suspended, extended, modified or discontinued at any time.
The following table summarizes our share repurchases for the periods presented:

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Shares Repurchased |  | 3,930,672 |  |  | 6,544,337 |  |  | 3,651,231 |
Aggregate amount paid (amounts in millions) (1) |  | $ | 200.8 |  |  | $ | 368.3 |  |  | $ | 204.2 |
(1) Includes excise tax fees of $1.8 million, $3.4 million, and $1.4 million in 2025, 2024 and 2023, respectively.

The Company allocates the excess of the repurchase price over the par value of shares acquired to Retained Earnings and Additional Paid-in Capital. The portion allocated to Additional Paid-in Capital is determined by dividing the number of shares to be retired by the number of shares issued multiplied by the balance of Additional Paid-in Capital as of the retirement date. As of January 31, 2026, we had $436.6 million available for share repurchases pursuant to the 2024 Share Repurchase Program.
Income Taxes
The Company is subject to U.S. federal, state and foreign income taxes. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the temporary differences are expected to be realized or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
We recognize deferred tax assets to the extent we believe these assets are more-likely-than-not to be realized. In making such a determination, we consider all available positive and negative evidence, including recent results of operations, future reversals of existing taxable temporary differences, projected future taxable income and tax planning strategies. A valuation allowance is recorded to reduce the carrying amount of deferred tax assets if it is more-likely-than-not that all or a portion of the asset will not be realized. The Company recognizes tax benefits from uncertain tax positions only if it is more-likely-than-not the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized from such positions are measured based on the largest benefit having a greater than 50% likelihood of being ultimately sustained. Interest and penalties from income tax matters are recognized in Income Tax Expense.
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Reclassifications
Within the merchandise division sales table presented in Note 3, certain products and categories were recategorized in the current fiscal year amongst various categories and divisions, respectively, to better align with our current merchandising strategy and view of the business. As a result, we have reclassified sales between divisions for 2024 and 2023 for comparability purposes. This reclassification is in divisional presentation only and did not impact the overall net sales balances previously disclosed.
Other Income
During the fourth quarter of 2023, the Company settled a legal matter with credit card companies pertaining to the overcharge of credit card interchange fees for prior periods dating back to 2004. In connection with this settlement, we recognized a net gain of approximately $15.9 million in Other Income, Net on the Consolidated Statements of Income.
During the fourth quarter of 2024, the Company settled a legal matter with a non-trade vendor. In connection with this settlement, we recognized a net gain of approximately $15.0 million in Other Income, Net on the Consolidated Statements of Income.
Operating Segment
Given the similar business activities, economic characteristics, products sold, customer base and methods of procurement, as well as the similar marketing and promotional activities of our stores and our academy.com website, we report our financial results as one reportable segment. Substantially all of the Company’s identifiable assets are located in the United States.
Comprehensive Income (Loss)
The Company has no components of other comprehensive income (loss), and therefore, comprehensive income equals net income.
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Recent Accounting Pronouncements
U.S. Income Tax Regulations
On July 4, 2025, an Act to provide for reconciliation pursuant to title II of H. Con. Res. 14, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was enacted into law in the United States. The OBBBA introduces significant changes to U.S. tax law, including full deductibility of qualified capital expenditures, full deductibility of domestic research and development expenditures, changes to the business interest limitation, and modifications to the international tax framework. For the fiscal year ending January 31, 2026, the Company recognized a material decrease to the current tax expense and corresponding increase to deferred tax expense that results in no net impact to the effective tax rate.
Accounting Guidance Adopted
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to enhance the disclosures on reportable segments. Under this pronouncement, all public entities (including those with a single reporting segment) are required to include incremental disclosures related to a public entity’s reportable segments, including disclosure of disaggregated expense information that is regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The new guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and should be adopted retrospectively. The Company adopted ASU 2023-07 retrospectively effective February 1, 2025 (see Note 14). The adoption of this standard did not have a material impact on the Company’s consolidated financial statement disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This pronouncement is intended to enhance the transparency and decision usefulness of income tax disclosures and establishes new income tax disclosure requirements, including requiring disaggregation of a reporting entity’s effective tax rate reconciliation and disaggregation of the income taxes paid based on the applicable tax jurisdiction. The new guidance is effective for fiscal years beginning after December 15, 2024 and should be applied on a prospective basis with the option to apply the standard retrospectively. The Company adopted ASU 2023-09 retrospectively, effective January 31, 2026 (see Note 10). The adoption of this standard did not have a material impact on the Company’s consolidated financial statement disclosures.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarifications for Share-Based Noncash Consideration from a Customer in a Revenue Contract. This pronouncement is intended to refine the scope of derivatives and clarify the scope for share-based noncash consideration from a customer in a revenue contract. The new guidance is effective for fiscal years beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, and should be applied prospectively or on a modified retrospective basis. The Company has elected early adoption of ASU 2025-07 on a modified retrospective basis, effective November 1, 2025. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
Accounting Guidance Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. The Company is evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which requires removal of all references to prescriptive and sequential software development stages. The new guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, and should be applied on a prospective transition approach, a modified transition approach, or a retrospective transition approach. The Company is evaluating the impact of adopting ASU 2025-06 on its consolidated financial statements.
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In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which provides clarification of current interim disclosure requirements. The new guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, and should be applied either prospectively or retrospectively to periods presented. The Company is evaluating the impact of adopting ASU 2025-11 on its condensed consolidated financial statements.
3.Net Sales
The following table sets forth the approximate amount of sales (all of which are based in the U.S.) by merchandise divisions for the periods presented (amounts in thousands):

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Merchandise division sales (1) |  |  |  |  |  |
Outdoors |  | $ | 1,831,038 |  |  | $ | 1,809,653 |  |  | $ | 1,807,664 |
Sports and recreation |  | 1,339,608 |  |  | 1,293,135 |  |  | 1,376,777 |
Apparel |  | 1,645,642 |  |  | 1,606,333 |  |  | 1,705,791 |
Footwear |  | 1,201,545 |  |  | 1,187,606 |  |  | 1,235,644 |
Total merchandise sales (2) |  | 6,017,833 |  |  | 5,896,727 |  |  | 6,125,876 |
Other sales (3) |  | 35,581 |  |  | 36,723 |  |  | 33,415 |
Net sales |  | $ | 6,053,414 |  |  | $ | 5,933,450 |  |  | $ | 6,159,291 |

(1)Certain products and categories were recategorized in the current fiscal year amongst various categories and divisions, respectively, to better align with our current merchandising strategy and view of the business. As a result, we have reclassified sales between divisions for 2024 and 2023 for comparability purposes. This reclassification is in divisional presentation only and did not impact the overall net sales balances previously disclosed.
(2)E-commerce sales represented 11.7%, 10.5% and 10.7% of merchandise sales for 2025, 2024 and 2023, respectively.
(3)Other sales consists primarily of gift card breakage income, credit card bounties and royalties, shipping income, sales return allowance and other items.
We sell gift cards in stores, online and in third-party retail locations. The gift cards we sell have no expiration dates. A liability for gift cards, which is recorded in Accrued Expenses and Other Current Liabilities on our Consolidated Balance Sheets, is established at the time of sale and revenues are recognized as the gift cards are redeemed in stores or on our website. Based on historical gift card redemption patterns, we believe we can reasonably estimate the amount of gift cards that have a remote likelihood of redemption. These identified amounts are recorded as net sales and recognized in proportion to historical redemption trends, which is referred to as “breakage”.
The following is a reconciliation of the gift card liability (amounts in thousands):

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Gift card liability, beginning balance |  | $ | 96,469 |  |  | $ | 94,155 |  |  | $ | 90,650 |
Issued |  | 142,708 |  |  | 133,445 |  |  | 134,741 |
Redeemed |  | (131,599) |  |  | (122,784) |  |  | (124,370) |
Recognized as breakage income |  | (8,020) |  |  | (8,347) |  |  | (6,866) |
Gift card liability, ending balance |  | $ | 99,558 |  |  | $ | 96,469 |  |  | $ | 94,155 |

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4.Long-Term Debt
Our debt consisted of the following (amounts in thousands) as of:

|  | January 31, 2026 |  | February 1, 2025
ABL Facility, due March 2029 |  | $ | — |  |  | $ | — |
Term Loan, due November 2027 |  | 85,750 |  |  | 88,750 |
Notes, due November 2027 |  | 400,000 |  |  | 400,000 |
Total debt |  | 485,750 |  |  | 488,750 |
Less current maturities |  | (3,000) |  |  | (3,000) |
Less unamortized discount on Term Loan |  | (227) |  |  | (361) |
Less deferred loan costs (1) |  | (1,730) |  |  | (2,710) |
Long-term debt, net |  | $ | 480,793 |  |  | $ | 482,679 |

(1) Deferred loan costs are related to the Term Loan and Notes.
As of January 31, 2026 and February 1, 2025, the balance in deferred loan costs related to the ABL Facility (as defined below) was approximately $4.6 million and $6.1 million, respectively, and was included in Other Noncurrent Assets on our Consolidated Balance Sheets. Total amortization of deferred loan costs was $2.5 million, $2.4 million and $2.4 million in 2025, 2024 and 2023, respectively. Total expenses related to accretion of original issuance discount were $0.1 million, $0.2 million and $0.3 million in 2025, 2024 and 2023, respectively. The expenses related to amortization of deferred loan costs and accretion of original issuance discount are included in Interest Expense, Net on the Consolidated Statements of Income.
ABL Facility
We refer to the 2020 ABL Facility and the amendments thereto collectively as the “ABL Facility”.
On November 6, 2020, Academy, Ltd., as borrower, and the Guarantors, as guarantors, amended the previously existing secured asset-based revolving credit facility by entering into an amendment to the First Amended and Restated ABL Credit Agreement, dated as of July 2, 2015, with JPMorgan Chase Bank, N.A. as the administrative agent and collateral agent, letter of credit issuer and swingline lender (the “ABL Agent”) and the several lenders party thereto, which ABL amendment (the “2020 ABL Facility”), among other things, extended the maturity of Academy, Ltd.’s asset-based revolving credit facility thereunder to November 6, 2025. In connection with the 2020 ABL Facility, the Company capitalized related professional fees of $3.1 million as deferred loan costs.
On March 30, 2023, Academy, Ltd., as borrower, and the guarantors, amended the 2020 ABL Facility by entering into an amendment to the First Amended and Restated ABL Credit Agreement, dated as of July 2, 2015, with JP Morgan Chase Bank, N.A. as the ABL Agent and the several lenders party thereto, which ABL amendment updated its benchmark base interest rate from LIBOR to Adjusted Term SOFR.
The ABL Facility is used to provide financing for working capital and other general corporate purposes, as well as to support certain letters of credit requirements, and availability is subject to customary borrowing base and availability provisions. During the normal course of business, we periodically utilize letters of credit primarily in support of insurance contracts and occasionally for the purchase of import goods. As of January 31, 2026, we had outstanding letters of credit of approximately $7.6 million, all of which were issued under the ABL Facility, and we had no borrowings outstanding under the ABL Facility, leaving the available borrowing capacity under the ABL Facility of $992.4 million.
Borrowings under the ABL Facility bear interest, at our election, at either of (1) Adjusted Term SOFR plus a margin of 1.25% to 1.75%, or (2) a base rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) JPMorgan Chase Bank, N.A.'s “prime rate”, or (c) the one-month Adjusted Term SOFR rate plus 1.00%, plus a margin of 0.25% to 0.75%. The ABL Facility also provides a fee applicable to the unused commitments of 0.375%. The terms and conditions of the ABL Facility also require that we prepay outstanding loans under the ABL Facility under certain circumstances. As of January 31, 2026, no future prepayments of outstanding loans have been triggered under the terms and conditions of the ABL Facility.
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On March 8, 2024 Academy, Ltd. (“Academy”), a wholly-owned subsidiary of Academy Sports and Outdoors, Inc., as borrower, New Academy Holding Company, LLC, Associated Investors, L.L.C. and Academy Managing Co., L.L.C., each a direct or indirect, wholly-owned subsidiary of the Company, as guarantors, entered into an amendment (the “ABL Amendment”) to the First Amended and Restated ABL Credit Agreement, dated as of July 2, 2015, with JPMorgan Chase Bank, N.A. as the administrative agent and collateral agent, letter of credit issuer and swingline lender, and the several lenders party thereto, which ABL Amendment, among other things, extended the maturity of Academy’s asset-based revolving credit facility (the “ABL Credit Facility”) to March 8, 2029, unless if (i) more than $100 million of the aggregate principal amount of the 2027 Senior Notes (as defined in the ABL Amendment) or the Term Loans (as defined in the ABL Amendment), or any refinancing thereof, in each case, is outstanding on the date that is 91 days prior to the earliest maturity date of any such indebtedness or (ii) equal to or less than $100 million of the aggregate principal amount of the 2027 Senior Notes or the Term Loans, in either case, is outstanding on the date that is 91 days prior to the earliest maturity date of any such indebtedness and a Reserve (as defined in the ABL Amendment) in the ABL Credit Facility has not been taken for such amount, then the maturity date of the ABL Credit Facility will be the date that is 91 days earlier than the earlier maturity date of the 2027 Senior Notes and the Term Loans. In connection with the ABL Amendment and the reduction of two lenders who dropped out of the ABL Facility, the Company wrote off $0.4 million of deferred loan costs related to the ABL Facility.
Term Loan
We refer to the 2020 Term Loan and then amendments thereto collectively as the “Term Loan”.
On November 6, 2020, Academy, Ltd. entered into a seven-year $400.0 million senior secured term loan (the “2020 Term Loan”) with Credit Suisse AG, Cayman Island Branch (“Credit Suisse”), as the administrative agent and collateral agent and the several other lenders and parties named therein. The 2020 Term Loan bore interest, at Academy, Ltd.’s election, at either (1) LIBOR rate with a floor of 0.75%, plus a margin of 5.00%, or (2) a base rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) Credit Suisse’s “prime rate”, or (c) the one-month LIBOR rate plus 1.00%, plus a margin of 4.00%. In connection with the 2020 Term Loan, the Company capitalized related professional fees of $5.8 million as deferred loan costs.
On May 17, 2023, Academy, Ltd. entered into a Conforming Changes Amendment (the “2023 Amendment”) to the Second Amended and Restated Credit Agreement, dated as of November 6, 2020, among Academy, Ltd., as Borrower, Credit Suisse AG, Cayman Islands Branch, as the administrative agent and collateral agent and the several lenders party thereto and the several other parties named therein, which updated the Term Loan benchmark base interest rate from LIBOR to Adjusted Term SOFR (as defined in the Conforming Changes Amendment to the Second Amended and Restated Credit Agreement). The transition of our Term Loan to Adjusted Term SOFR became effective on August 1, 2023. Borrowings under the Term Loan bear interest, at our election, at either (1) Adjusted Term SOFR with a floor of 0.75% rate plus a margin of 3.75% or (2) a base rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) the U.S. “prime rate” announced by the administrative agent, or (c) the one-month Adjusted Term SOFR with a floor of 0.75% rate, plus a margin of 3.75%. As of January 31, 2026, the weighted average interest rate was 7.72%, with interest payable monthly. Quarterly principal payments of $750.0 thousand are required through September 30, 2027 and borrowings mature on November 6, 2027. The terms and conditions of the Term Loan also require that the outstanding balance under the Term Loan is prepaid under certain circumstances.
On February 1, 2024, the Company utilized cash on hand to voluntarily prepay $100.0 million of outstanding borrowings under the Term Loan. In connection with this principal payment, the Company recognized a non-cash loss on early retirement of debt of $1.5 million in 2023 from the write-off of deferred loan costs related to the original issuance discount associated with the Term Loan.
The Amended Credit Agreement contains customary events of default such as failure to pay principal or interest, breaches of representations and warranties, violations of affirmative or negative covenants, cross-defaults to other material indebtedness, a bankruptcy or similar proceeding, rendering of certain monetary judgments, invalidity of collateral documents and changes of control. As of January 31, 2026, no prepayment was due under the terms and conditions of the Term Loan.
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Notes
On November 6, 2020, Academy, Ltd. issued $400.0 million of 6.00% senior secured notes which are due November 15, 2027 (the “Notes”), pursuant to an indenture, dated as of November 6, 2020 (the “Indenture”), with Academy, Ltd. the Guarantors (as defined below) and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (in such capacity, the “Notes Collateral Agent”). The Notes pay interest semi-annually in arrears in cash on May 15 and November 15 of each year at a rate of 6.00% per year, which commenced on May 15, 2021. In connection with issuance of the Notes, the Company capitalized related professional fees of $5.2 million as deferred loan costs.
The Notes are fully and unconditionally guaranteed on a senior secured basis by each of NAHC, Associated Investors L.L.C. and Academy Managing Co., L.L.C., each a direct or indirect, wholly-owned subsidiary of the Company (collectively, the “Guarantors”), and each of Academy, Ltd.’s future wholly-owned domestic restricted subsidiaries, to the extent such subsidiary guarantees Academy, Ltd.’s senior secured credit facilities or certain capital markets debt.
On or after November 15, 2023, Academy, Ltd. may, at its option and on one or more occasions, redeem all or a part of the Notes at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. At any time prior to November 15, 2023, Academy, Ltd. may, at its option and on one or more occasions, redeem all or part of the Notes at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date, plus a “make-whole” premium as described in the Indenture. In addition, at any time prior to November 15, 2023, Academy, Ltd. may, at its option and on one or more occasions, redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 106% of the aggregate principal amount thereof, with an amount equal to or less than the net cash proceeds from one or more equity offerings to the extent such net cash proceeds are received by or contributed to Academy, Ltd., plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.
Upon the occurrence of certain events constituting a Change of Control (as defined in the Indenture), Academy, Ltd. will be required to make an offer to repurchase all of the Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
The Indenture provides for events of default which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest, breach of other agreements in respect of the Notes, acceleration of certain other indebtedness, failure to pay certain final judgments, failure of certain guarantees to be enforceable, failure to perfect certain collateral securing the Notes and certain events of bankruptcy or insolvency, which events of default, if any occur, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then-outstanding Notes to be due and payable immediately.
Liens and guarantees. The ABL Facility has a first priority lien on all Academy, Ltd.'s cash, accounts receivable, inventory, deposit and securities accounts and proceeds therefrom (the “ABL Collateral”). Additionally, the ABL Facility has a second priority lien on all other collateral of the Term Loan. All obligations under the Term Loan and the guarantees of those obligations are secured by:
•a second-priority security interest in the ABL Collateral;
•a first-priority security interest in, and mortgages on, substantially all present and after acquired tangible and intangible assets of Academy, Ltd and the Guarantors; and
•a first-priority pledge of 100% of the capital stock of Academy, Ltd. and its domestic subsidiaries and 66% of the voting capital stock of each of Academy, Ltd.'s foreign subsidiaries, if any, that are directly owned by Academy, Ltd. or a future U.S. guarantor, if any.
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The Term Loan is guaranteed by the Guarantors on a senior secured basis. All obligations under the Term Loan and the guarantees of those obligations will be secured by:
•a second-priority security interest in the ABL Priority Collateral;
•a first-priority security interest in, and mortgages on, substantially all present and after acquired tangible and intangible assets of Academy and the Guarantors; and
•a first-priority pledge of 100% of the capital stock of Academy and its domestic subsidiaries and 66% of the voting capital stock of each of Academy’s foreign subsidiaries, if any, that are directly owned by Academy or a future U.S. guarantor, if any.
In order to secure the Notes and the guarantees, Academy, Ltd. and the Guarantors entered into certain security documents with the Notes Collateral Agent, including a security agreement and a pledge agreement, each dated as of November 6, 2020. The Notes and the guarantees are secured by:
•a first-priority lien on all of Academy, Ltd.’s and the Guarantors’ personal property that secure the Term Loan on a first-priority basis; and
•a second-priority lien on Academy, Ltd.’s and the Guarantors’ personal property consisting of accounts and all other rights to payment, inventory, tax refunds, cash, deposit accounts, securities and commodities accounts, and documents and supporting obligations, securing the ABL Facility on a first-priority basis and the Term Loan on a second-priority basis (the “ABL Priority Collateral”).
Covenants. The ABL Facility, Term Loan and Notes agreements contain covenants, including, among other things, covenants that may restrict Academy, Ltd.'s ability to incur certain additional indebtedness, create or permit liens on assets, engage in mergers or consolidations, pay dividends, make other restricted payments, make loans or advances, engage in transactions with affiliates or amend material documents. Additionally, at certain times, the ABL Facility is subject to a minimum adjusted fixed charge coverage ratio. These covenants are subject to certain qualifications and limitations. We were in compliance with these covenants as of January 31, 2026.
As of January 31, 2026, scheduled principal payments on our debt are as follows (amounts in thousands):

Fiscal Year |
2026 | $ | 3,000 |
2027 | 482,750 |
2028 | — |
2029 | — |
2030 | — |
Total | $ | 485,750 |

5.Fair Value Measurements
Fair value is defined as an exit price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Authoritative guidance establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of the assets and liabilities.
The fair value measurements are classified as either:
•Level 1 which represents valuations based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
•Level 2 which represents valuations based on quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
•Level 3 which represents valuations based on prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
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In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy in which the fair value measurement is classified in its entirety, is based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. There were no transfers made into or out of the Level 1, 2 or 3 categories during any period presented.
Other Financial Instruments
Periodically we make cash investments in money market funds comprised of U.S. Government treasury bills and securities, which are classified as cash and redeemable on demand. We held investments in money market funds of $277.7 million and $256.9 million as of January 31, 2026 and February 1, 2025, respectively.
The fair value of the Term Loan and Notes is estimated using a discounted cash flow analysis based on quoted market prices for the instrument in an inactive market and is therefore classified as Level 2 within the fair value hierarchy. As of January 31, 2026 and February 1, 2025, the estimated fair value of the Term Loan and Notes was $0.5 billion and $0.5 billion, respectively. As borrowings on the ABL Facility are generally repaid in less than 12 months, we believe that fair value approximates the carrying value.
6.Property and Equipment
Property and equipment consists of the following (amounts in thousands) as of:

| January 31, 2026 |  | February 1, 2025
Leasehold improvements | $ | 777,207 |  |  | $ | 663,869 |
Equipment and software | 782,547 |  |  | 733,939 |
Furniture and fixtures | 473,990 |  |  | 431,577 |
Construction in progress | 29,758 |  |  | 54,236 |
Building and land | 11,964 |  |  | 16,010 |
Total property and equipment | 2,075,466 |  |  | 1,899,631 |
Accumulated depreciation and amortization | (1,491,363) |  |  | (1,374,495) |
Property and equipment, net | $ | 584,103 |  |  | $ | 525,136 |

Depreciation expense was $122.9 million, $118.1 million and $110.9 million in 2025, 2024 and 2023, respectively.
As of January 31, 2026, Assets Held for Sale on the Consolidated Balance Sheets were comprised of $3.0 million of land that is expected to be sold within one year.
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7.Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following (amounts in thousands) as of:

| January 31, 2026 |  | February 1, 2025
Accrued interest | $ | 7,803 |  |  | $ | 7,634 |
Accrued personnel costs | 55,922 |  |  | 46,178 |
Accrued professional fees | 2,783 |  |  | 13,466 |
Accrued sales and use tax | 14,306 |  |  | 4,772 |
Accrued self-insurance | 17,539 |  |  | 15,205 |
Deferred revenue - gift cards and other | 102,200 |  |  | 98,641 |
Income taxes payable | 779 |  |  | 6,090 |
Property taxes | 19,123 |  |  | 16,833 |
Sales return allowance | 4,400 |  |  | 4,400 |
Other | 19,053 |  |  | 17,104 |
Accrued expenses and other current liabilities | $ | 243,908 |  |  | $ | 230,323 |

8.Share-Based Compensation
On September 29, 2020, the ASO, Inc. Board of Directors adopted the 2020 Omnibus Incentive Plan (the “2020 Omnibus Incentive Plan”), which became effective on October 1, 2020. The plan reserved a total of 5,150,000 shares of common stock for issuance. On June 1, 2023, our stockholders approved the First Amendment to the 2020 Omnibus Incentive Plan, which, among other changes, increased the number of shares available for issuance thereunder by 2,600,000 shares. As of January 31, 2026, there were 3,532,476 shares that were authorized and available for grant under the 2020 Omnibus Incentive Plan.
On September 29, 2020, the ASO, Inc. Board of Directors adopted the 2020 Employee Stock Purchase Plan (the “ESPP”), which became effective on October 1, 2020. We have reserved a total of 2,000,000 shares and as of January 31, 2026, there were 1,342,080 shares authorized and available for future issuance under the ESPP.
The following table provides total stock-based compensation recognized in the Consolidated Statements of Income (amounts in thousands):

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 | February 3, 2024 |
Equity compensation expense (1) |  | $ | 21,176 |  |  | $ | 26,629 |  | $ | 24,377 |  |
Total related tax benefit |  | $ | 4,503 |  |  | $ | 5,822 |  | $ | 5,245 |  |

(1) These costs are included within SG&A expenses in the Consolidated Statements of Income.
As of January 31, 2026, unrecognized compensation cost related to non-vested share-based compensation awards of $27.2 million is expected to be recognized over a weighted average life of approximately 2 years. The grant date fair value of Restricted Units and Restricted Stock Units vested was $17.9 million, $13.9 million and $11.7 million for 2025, 2024 and 2023, respectively.
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2011 Unit Incentive Plan
The 2011 Unit Incentive Plan provides for the grant of certain equity incentive awards (each, an “Award”), such as options to purchase ASO, Inc. common stock (each, a “Unit Option”) and restricted units that may settle in ASO, Inc. common stock (each, a “Restricted Unit”) to our directors, executives, and eligible employees of the Company.
Unit Options granted under the 2011 Unit Incentive Plan consist of Unit Options that vest upon the satisfaction of time-based requirements (each, a “Service Unit Option”) and Unit Options that vest upon the satisfaction of both time-based requirements and Company performance-based requirements (each, a “Performance Unit Option”).
Restricted Units granted under the 2011 Unit Incentive Plan consist of Restricted Units that vest upon the satisfaction of time-based requirements (each, a “Service Restricted Unit”) and Restricted Units that vest upon the satisfaction of a liquidity event-based requirement together with a time-based requirement and/or a performance-based requirement (each, a “Liquidity Event Restricted Unit”). In each case, vesting of the Company’s outstanding and unvested Unit Options and Restricted Units is contingent upon the holder’s continued service through the date of each applicable vesting event.
Concurrent with the adoption of the 2020 Omnibus Incentive Plan on October 1, 2020, no further Awards are authorized to be granted under the 2011 Unit Incentive Plan.
2020 Omnibus Incentive Plan
The 2020 Omnibus Incentive Plan provides for the grant of Awards such as options to purchase ASO, Inc. common stock (each, a “Stock Option”) and restricted stock units which may settle in ASO, Inc. common stock (each, a “Restricted Stock Unit”) to our directors, executives, and eligible employees of the Company.
Stock Options granted under the 2020 Omnibus Incentive Plan consist of Stock Options that vest upon the satisfaction of time-based requirements, each, a “Service Stock Option” (Service Unit Options and Service Stock Options together are “Service Options”).
Restricted Stock Units granted under the 2020 Omnibus Incentive Plan consist of Restricted Stock Units that vest upon the satisfaction of time-based requirements (each, a “Service Restricted Stock Unit”) and Restricted Stock Units that vest upon the satisfaction of a time-based requirement and performance-based and/or market-based requirements (each, a “Performance Restricted Stock Unit”). In each case, vesting of the Company’s outstanding and unvested Stock Options and Restricted Stock Units is contingent upon the holder’s continued service through the date of each applicable vesting event.
ESPP
Our ESPP allows eligible employees to contribute up to 15% of their eligible earnings toward the semi-annual purchase of the Company's shares of common stock at a discount of 15% of the closing stock price on the first or last day of the six-month offering period, whichever is lower.
The number of shares reserved for issuance under the ESPP will be increased automatically on the first day of each fiscal year, beginning in fiscal year 2021, by a number equal to the lesser of (1) 1,000,000 shares of common stock, (2) 2.0% of the total number of all classes of the company's common stock outstanding on the last day of the immediately preceding fiscal year, or (3) a lower number of shares determined by the ASO, Inc. Board of Directors.
Service Option Fair Value Assumptions
The fair value for Service Options granted was estimated using a Black-Scholes option-pricing model. The expected lives of the Service Options granted were based on the “SEC simplified” method. Expected price volatility was determined based on our own volatility and the implied volatilities of comparable companies over a historical period that matches the expected life of the Service Options. The risk-free interest rate was based on the expected U.S. Treasury rate over the expected life. In 2023, the dividend yield was based on the most recent annualized quarterly dividend and the valuation date closing stock price. The assumptions used to calculate the fair value of Service Options granted are evaluated and modified, as necessary, to reflect current market conditions and experience.
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The following table presents the assumptions and grant date fair values for Service Options granted in 2023 (the Company did not grant any Service Options in 2024 or 2025):

|  |  |  |  | Fiscal Year Ended
|  |  |  |  | February 3, 2024
Expected life in years |  |  |  |  | 6.0
Expected volatility |  |  |  |  | 46% to 51%
Weighted-average volatility |  |  |  |  | 47.8%
Risk-free interest rate |  |  |  |  | 3.7% to 4.4%
Dividend yield |  |  |  |  | 0.6%
Weighted-average grant date fair value - Service Options |  |  |  |  | $27.60

Option Activity
Option activity is as follows:

Service Options |  |  |  |  |  |  |  |
Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (in years) |  | Aggregate Intrinsic Value (in thousands) |
Outstanding as of January 28, 2023 | 3,570,694 |  |  | $ | 24.27 |  |  | 7.3 |  | $ | 112,050 |  |
Granted | 262,640 |  |  | 58.13 |  |  |  |  |  |
Canceled | (694) |  |  | 13.00 |  |  |  |  |  |
Forfeited | (228,160) |  |  | 39.14 |  |  |  |  |  |
Exercised | (988,682) |  |  | 20.00 |  |  |  |  | $ | 36,277 |  |
Outstanding as of February 3, 2024 | 2,615,798 |  |  | $ | 27.99 |  |  | 6.7 |  | $ | 95,479 |  |
Granted | — |  |  | — |  |  |  |  |  |
Canceled | — |  |  | — |  |  |  |  |  |
Forfeited | (52,211) |  |  | 33.29 |  |  |  |  |  |
Exercised | (201,479) |  |  | 22.27 |  |  |  |  | $ | 7,846 |  |
Outstanding as of February 1, 2025 | 2,362,108 |  |  | $ | 28.36 |  |  | 5.8 |  | $ | 57,965 |  |
Granted | — |  |  | — |  |  |  |  |  |
Canceled | (10,505) |  |  | 53.20 |  |  |  |  |  |
Forfeited | (38,431) |  |  | 41.46 |  |  |  |  |  |
Exercised | (175,351) |  |  | 25.43 |  |  |  |  | $ | 4,143 |  |
Outstanding as of January 31, 2026 (1) | 2,137,821 |  |  | $ | 28.24 |  |  | 4.8 |  | $ | 58,149 |  |
Exercisable as of January 31, 2026 | 2,001,700 |  |  | $ | 26.90 |  |  | 4.7 |  | $ | 56,880 |  |

(1) The Company has elected to recognize forfeitures as they occur. Therefore, the number of awards vested and expected to vest is equal to the awards outstanding.
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Performance Unit Options |  |  |  |  |  |  |
Unit Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (in years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding as of January 28, 2023 | 218,477 |  |  | $ | 16.59 |  |  | 5.5 |  | $ | 8,534 |
Granted | — |  |  | — |  |  |  |  |
Canceled | — |  |  | — |  |  |  |  |
Forfeited | — |  |  | — |  |  |  |  |
Exercised | (95,915) |  |  | 16.63 |  |  |  |  | $ | 3,656 |
Outstanding as of February 3, 2024 | 122,562 |  |  | $ | 16.55 |  |  | 5.0 |  | $ | 5,874 |
Granted | — |  |  | — |  |  |  |  |
Canceled | — |  |  | — |  |  |  |  |
Forfeited | — |  |  | — |  |  |  |  |
Exercised | (2,323) |  |  | 16.70 |  |  |  |  | $ | 104 |
Outstanding as of February 1, 2025 | 120,239 |  |  | $ | 16.55 |  |  | 4.1 |  | $ | 4,300 |
Granted | — |  |  | — |  |  |  |  |
Canceled | — |  |  | — |  |  |  |  |
Forfeited | — |  |  | — |  |  |  |  |
Exercised | (620) |  |  | 13.86 |  |  |  |  | $ | 22 |
Outstanding as of January 31, 2026 (1) | 119,619 |  |  | $ | 16.57 |  |  | 3.1 |  | $ | 4,599 |
Exercisable as of January 31, 2026 | 119,619 |  |  | $ | 16.57 |  |  | 3.1 |  | $ | 4,599 |

(1) The Company has elected to recognize forfeitures as they occur. Therefore, the number of awards vested and expected to vest is equal to the awards outstanding.
The total income tax benefit recognized from the exercise of stock options was $0.5 million, $1.3 million and $3.9 million for the fiscal years ended January 31, 2026, February 1, 2025 and February 3, 2024, respectively.
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Restricted Unit Activity
Restricted Unit activity is as follows:

| Service Restricted Units |  |  |  | Performance Restricted Units
| Units |  | Weighted Average Grant Date Fair Value |  |  |  |  |  | Units |  | Weighted Average Grant Date Fair Value
Non-vested as of January 28, 2023 | 437,108 |  |  | $ | 39.11 |  |  |  |  |  |  | 298,929 |  |  | $ | 32.55 |
Granted | 393,131 |  |  | 60.37 |  |  |  |  |  |  | 250,384 |  |  | 57.91 |
Vested | (173,225) |  |  | 39.48 |  |  |  |  |  |  | (149,190) |  |  | 32.82 |
Forfeited | (92,151) |  |  | 51.32 |  |  |  |  |  |  | (88,301) |  |  | 47.94 |
Non-vested as of February 3, 2024 | 564,863 |  |  | $ | 51.80 |  |  |  |  |  |  | 311,822 |  |  | $ | 48.85 |
Granted | 435,520 |  |  | 62.86 |  |  |  |  |  |  | 129,041 |  |  | 65.48 |
Vested | (246,171) |  |  | 49.79 |  |  |  |  |  |  | (47,180) |  |  | 33.78 |
Forfeited | (77,703) |  |  | 58.73 |  |  |  |  |  |  | (9,521) |  |  | 34.87 |
Non-vested as of February 1, 2025 | 676,509 |  |  | $ | 58.85 |  |  |  |  |  |  | 384,162 |  |  | $ | 56.63 |
Granted | 571,629 |  |  | 49.13 |  |  |  |  |  |  | 165,055 |  |  | 49.98 |
Vested | (300,557) |  |  | 55.87 |  |  |  |  |  |  | (35,695) |  |  | 31.91 |
Forfeited | (81,559) |  |  | 56.13 |  |  |  |  |  |  | (31,712) |  |  | 61.31 |
Non-vested as of January 31, 2026 | 866,022 |  |  | $ | 53.73 |  |  |  |  |  |  | 481,810 |  |  | $ | 55.88 |

Vesting
The Company's outstanding and unvested Service Options typically vest ratably over a three or four-year period, on each anniversary of their grant date.
The Company’s outstanding and unvested Service Restricted Units generally vest ratably over a three or four-year period on each anniversary of their grant date. In more limited grants, Service Restricted Units vest 100% on the first anniversary of the grant date, or, if earlier, the business day immediately preceding the following annual meeting of stockholders.
The Company’s outstanding and unvested Performance Restricted Units typically vest either (i) if granted during 2023, 2024 or 2025, on the third anniversary of the Performance Restricted Unit's performance period if the Company achieves the performance metrics for the performance period, or (ii) if granted prior to 2023, annually each year on the vesting commencement date, so long as the Company achieved (a) the performance metric for the performance period or (b) achieves a stated target share price.
In the event of certain Company change of control transactions, the Company's then-outstanding and unvested Awards will become fully vested and exercisable subject to certain criteria (as defined in the award agreements). For certain Awards granted in 2022 and all Awards granted in 2023, for team members that meet the age and service requirement for retirement eligibility (as defined in the award agreement), such Awards do not require the continued employment of the team member for vesting eligibility. In such cases, expensing of Awards is accelerated through the retirement eligibility date.
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9.Earnings per Common Share
Basic earnings per common share is calculated based on net income divided by the basic weighted average common shares outstanding during the period, and diluted earnings per common share is calculated based on net income divided by the diluted weighted average common shares outstanding. Diluted weighted average common shares outstanding is based on the basic weighted average common shares outstanding plus any potential dilutive effect of stock-based awards outstanding during the period using the treasury stock method, which assumes the potential proceeds received from the dilutive stock options are used to purchase treasury stock. Anti-dilutive stock-based awards do not include awards which have a performance or liquidity event target which has yet to be achieved.
Basic and dilutive weighted average common shares outstanding and basic and diluted earnings per common share are calculated as follows (amounts in thousands except per share amounts):

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Net income |  | $ | 376,768 |  |  | $ | 418,447 |  |  | $ | 519,190 |
Weighted average common shares outstanding - basic |  | 66,612 |  |  | 71,343 |  |  | 75,389 |
Dilutive effect of Service Restricted Units and Service Restricted Stock Units |  | 318 |  |  | 316 |  |  | 327 |
Dilutive effect of Performance Restricted Stock Units |  | 27 |  |  | 85 |  |  | 165 |
Dilutive effect of Service Options |  | 945 |  |  | 1,153 |  |  | 1,439 |
Dilutive effect of Performance Unit Options |  | 79 |  |  | 86 |  |  | 112 |
Dilutive effect of ESPP Shares |  | 53 |  |  | 65 |  |  | 37 |
Weighted average common shares outstanding - diluted |  | 68,034 |  |  | 73,048 |  |  | 77,469 |
Earnings per common share - basic |  | $ | 5.66 |  |  | $ | 5.87 |  |  | $ | 6.89 |
Earnings per common share - diluted |  | $ | 5.54 |  |  | $ | 5.73 |  |  | $ | 6.70 |
Anti-dilutive stock-based awards excluded from diluted calculation |  | 210 |  |  | 126 |  |  | 128 |

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10.Income Taxes
The income tax provision consists of the following (amounts in thousands):

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
| Current expense: |  |  |  |  |
| Federal | $ | 10,680 |  |  | $ | 62,162 |  |  | $ | 125,325 |
| State | 9,369 |  |  | 19,717 |  |  | 22,869 |
| Foreign | 431 |  |  | 64 |  |  | 19 |
| Total current expense (a) | 20,480 |  |  | 81,943 |  |  | 148,213 |
| Deferred expense (benefit): |  |  |  |  |
| Federal | 83,590 |  |  | 36,750 |  |  | (3,395) |
| State | 5,219 |  |  | 1,085 |  |  | (817) |
| Foreign | — |  |  | — |  |  | (35) |
| Total deferred expense (benefit) (a) | 88,809 |  |  | 37,835 |  |  | (4,247) |
| Income tax expense | $ | 109,289 |  |  | $ | 119,778 |  |  | $ | 143,966 |
(a) | The Company purchased $47.7 million of energy credits under the Inflation Reduction Act related to the tax year ending January 31, 2026 for a total purchase price of $44.1 million, resulting in a net tax benefit of $3.6 million during fiscal year 2025. During fiscal year 2024, the Company purchased $38.1 million of energy credits under the Inflation Reduction Act related to tax years ending February 3, 2024 and February 1, 2025 for a total purchase price of $35.8 million, resulting in a net tax benefit of $2.3 million.

Income before income taxes includes the following components (amounts in thousands):

| Fiscal Year Ended
| January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
United States | $ | 483,419 |  |  | $ | 537,444 |  |  | $ | 662,980 |
Non-U.S. | 2,638 |  |  | 781 |  |  | 176 |
Total income before income taxes | $ | 486,057 |  |  | $ | 538,225 |  |  | $ | 663,156 |

A reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate is as follows (dollar amounts in thousands):

| Fiscal Year Ended
| January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
U.S. federal statutory tax rate | $ | 102,072 |  |  | 21.0 | % |  | $ | 113,027 |  |  | 21.0 | % |  | $ | 139,263 |  |  | 21.0 | %
State and local income taxes, net of federal income tax rate (a) | 11,683 |  |  | 2.4 |  |  | 16,936 |  |  | 3.1 |  |  | 17,511 |  |  | 2.5 |
Foreign tax effects |  |  |  |  |  |  |  |  |  |  |
Other | 735 |  |  | 0.1 |  |  | 1,751 |  |  | 0.3 |  |  | (17) |  |  | — |
Effect of cross border tax laws | (4,100) |  |  | (0.8) |  |  | (233) |  |  | — |  |  | — |  |  | — |
Tax credits |  |  |  |  |  |  |  |  |  |  |
Research and development tax credits | (2,025) |  |  | (0.4) |  |  | (3,958) |  |  | (0.7) |  |  | (2,543) |  |  | (0.4) |
Other | (4,764) |  |  | (1.0) |  |  | (3,218) |  |  | (0.6) |  |  | (739) |  |  | (0.1) |
Nontaxable or nondeductible items |  |  |  |  |  |  |  |  |  |  |
Share-based payment awards | 353 |  |  | 0.1 |  |  | (1,946) |  |  | (0.4) |  |  | (7,697) |  |  | (1.1) |
Other | 5,335 |  |  | 1.1 |  |  | (2,581) |  |  | (0.4) |  |  | (1,812) |  |  | (0.2) |
Effective income tax rate | $ | 109,289 |  |  | 22.5 | % |  | $ | 119,778 |  |  | 22.3 | % |  | $ | 143,966 |  |  | 21.7 | %
(a) State taxes in Texas, Louisiana, Georgia, and Tennessee made up the majority (greater than 50 percent) of the tax effect in this category.

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Components of deferred tax assets and liabilities consist of the following (amounts in thousands):

| January 31, 2026 |  | February 1, 2025
Deferred tax assets: |  |  |
Accounts receivable | $ | 417 |  |  | $ | 643 |
Accrued liabilities and reserves | 24,666 |  |  | 19,824 |
Lease liabilities | 327,724 |  |  | — |
Equity compensation | 8,350 |  |  | 9,934 |
Other | 2,146 |  |  | 1,389 |
Total deferred tax assets | 363,303 |  |  | 31,790 |
Deferred tax liabilities: |  |  |
Inventory | (6,068) |  |  | (21,199) |
Prepaid items | (17,318) |  |  | (15,551) |
Property and equipment | (49,865) |  |  | (2,048) |
Right-of-use assets | (287,144) |  |  | — |
Intangible assets | (303,615) |  |  | (249,804) |
Other | 53 |  |  | (3) |
Total deferred tax liabilities | (663,957) |  |  | (288,605) |
Net deferred tax liability | $ | (300,654) |  |  | $ | (256,815) |

Management evaluates the realizability of the deferred tax assets and the need for additional valuation allowances annually. As of January 31, 2026, based on current facts and circumstances, management believes that it is more likely than not that the Company will realize benefit for its gross deferred tax assets.
As of January 31, 2026, we had no unrecognized tax benefits and we do not anticipate that unrecognized tax benefits will significantly increase or decrease over the next twelve months. The Company files a consolidated federal income tax return and files tax returns in various state and local jurisdictions. The statute of limitations is open for federal and state tax audits for the tax fiscal years 2023 through 2025, and 2022 through 2025, respectively.
On July 4, 2025, an Act to provide for reconciliation pursuant to title II of H. Con. Res. 14, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was enacted into law in the United States. The OBBBA introduces significant changes to U.S. tax law, including full deductibility of qualified capital expenditures, full deductibility of domestic research and development expenditures, changes to the business interest limitation, and modifications to the international tax framework. For the fiscal year ending January 31, 2026, the Company recognized a material decrease to the current tax expense and corresponding increase to deferred tax expense that results in no net impact to the effective tax rate.
Cash paid for income taxes, net of refunds, consists of the following (amounts in thousands):

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
| U.S. federal | $ | 21,633 |  |  | $ | 69,000 |  |  | $ | 110,328 |
| U.S. state and local: |  |  |  |  |
| Texas | 3,928 |  |  | 3,775 |  |  | 3,838 |
| Tennessee | 3,143 |  |  | 2,315 |  |  | 2,131 |
| Other | 9,099 |  |  | 13,300 |  |  | 15,820 |
| Total U.S. state and local | $ | 16,170 |  |  | $ | 19,390 |  |  | $ | 21,789 |
| Non-U.S. | 18 |  |  | 11 |  |  | 9 |
| Total cash paid for income taxes (net of refunds) | $ | 37,821 |  |  | $ | 88,401 |  |  | $ | 132,126 |

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11.Leases
With the exception of one retail store which we own, we lease all of our retail stores, distribution centers and corporate offices. Our leases primarily relate to building leases, which generally include options to renew at our sole discretion for five years or more. We regularly extend options for our building leases, which constitutes a lease modification and such events require a re-measurement of the lease liability at current discount rates. The useful life of leasehold improvement assets are limited by the expected lease term. Additionally, we have certain agreements for equipment rentals, which are typically 12 months or less in duration. As of January 31, 2026, all of our leases are classified as operating leases. In addition, in certain situations, we may sublease real estate to third parties. Historically, our sublease portfolio consists mainly of former store locations for which we are still under lease and existing store leases in which we have excess or unused space.
During 2024, we closed on a sale-leaseback agreement involving a store property. During 2025, we closed on sale-leaseback agreements involving four store properties, three of which were previously classified as assets held for sale on the Consolidated Balance Sheet as of the third quarter of 2025. We determined that the transactions met the accounting criteria for sale-leaseback treatment and we recognized net gains of approximately $7.1 million and $15.4 million in SG&A expenses on the Consolidated Statements of Income for 2024 and 2025, respectively.
The components of lease expense and sublease income included in SG&A expenses and Cost of Goods Sold on our Consolidated Statements of Income is as follows (amounts in thousands):

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Operating lease expense |  | $ | 239,853 |  |  | $ | 222,709 |  |  | $ | 214,672 |
Short-term lease expense |  | — |  |  | — |  |  | — |
Variable lease expense |  | 12,555 |  |  | 10,472 |  |  | 10,405 |
Sublease income |  | (557) |  |  | (498) |  |  | (463) |
Net lease expense |  | $ | 251,851 |  |  | $ | 232,683 |  |  | $ | 224,614 |

Information about our operating leases is as follows (dollar amounts in thousands):

|  | Fiscal Year Ended
|  | January 31, 2026 |  | February 1, 2025 |  | February 3, 2024
Right-of-use assets obtained in exchange for new operating lease liabilities |  | $ | 244,100 |  | $ | 214,747 |  | $ | 134,181 |
Cash paid for amounts included in the measurement of operating lease liabilities |  | $ | 244,974 |  | $ | 224,942 |  | $ | 213,860 |
|  |  |  | January 31, 2026 |  | February 1, 2025
Weighted-average remaining lease term in years |  |  |  | 9.8 |  | 9.6
Weighted-average incremental borrowing rate |  |  |  | 8.3 | % |  | 8.6 | %

As most of our leases do not provide an implicit rate of interest, we use our incremental borrowing rate, which is based on the market lending rates for companies with comparable credit ratings, to determine the present value of lease payments on lease commencement or remeasurement.
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The remaining maturities of lease liabilities by fiscal year as of January 31, 2026 are as follows (amounts in thousands):

2026 |  | $ | 255,492 |
2027 |  | 246,058 |
2028 |  | 228,670 |
2029 |  | 211,970 |
2030 |  | 193,471 |
After 2030 |  | 914,873 |
Total lease payments (1) |  | 2,050,534 |
Less: Interest |  | (641,876) |
Present value of lease liabilities |  | $ | 1,408,658 |

(1) Minimum lease payments have not been reduced by sublease rentals of $1.4 million due in the future under non-cancelable subleases. The Company has entered into operating leases related to future store locations for which we have not yet taken possession of the location. As of January 31, 2026, the future minimum lease payments on these leases approximated $317.0 million.
12.Commitments and Contingencies
Technology Related Commitments and Other
As of January 31, 2026, we have obligations under technology-related, construction and other contractual commitments in the amount of $183.3 million. Of such commitments, approximately $72.5 million is payable in the next 12 months.
Other Contingencies
During 2025, the Company entered into an agreement to sell a portion of the rights to potential tariff relief litigation claims, which was determined to be accounted for under ASC 470. As of January 31, 2026, the $10.5 million proceeds from the sale are recorded within Other Long-term Liabilities on the Consolidated Balance Sheets and are presented as Other Financing Activities on the Consolidated Statements of Cash Flows. Subsequent to January 31, 2026, the Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act. The ultimate availability, timing, and amount of any potential refunds of such tariffs, or releasing the $10.5 million of proceeds mentioned above from the Consolidated Balance Sheet, remain highly uncertain and are subject to further legal, regulatory, and administrative developments. To the extent any tariff refunds are ultimately realized, the Company does not expect to receive refunds associated with the portion of rights sold.
Financial Guarantees
During the normal course of business, we enter into contracts that contain a variety of representations and warranties and provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against us that have not yet occurred. However, based on experience, we believe the risk of loss to be remote.
Legal Proceedings
We are a defendant or co-defendant in lawsuits, claims and demands brought by various parties relating to matters normally incident to our business. No individual case, or group of cases against us, presenting substantially similar issues of law or fact, is expected to have a material effect on the manner in which we conduct our business or on our consolidated results of operations, financial position or liquidity. The majority of these cases are alleging negligence, and product, premises, employment and/or commercial liability. Reserves have been established that we believe to be adequate based on our current evaluations and experience in these types of claim situations; however, the ultimate outcome of these cases cannot be determined at this time. We believe, taking into consideration our indemnities, defenses, insurance and reserves, the ultimate resolution of these matters will not have a material impact on our financial position, results of operations or cash flows. In addition, government agencies and self-regulatory organizations have the ability to conduct periodic examinations of and administrative proceedings regarding our business.
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13.Employee Benefit Plans
401(k) Plan
We sponsor a safe harbor defined contribution 401(k) profit sharing plan (the “401(k) Plan”) for our eligible employees. The 401(k) Plan includes an eligible employee compensation deferral feature and Company matching contributions. Eligible employees are permitted to contribute up to 75% of their eligible compensation on a pretax basis to the 401(k) Plan, subject to Internal Revenue Service limitations. We match 100% of the money contributed by eligible plan participants to the 401(k) Plan each pay period, on a dollar-for-dollar basis, up to 6% of a plan participant’s eligible compensation during such pay period. The 401(k) Plan may be amended or terminated at our discretion. Employer contributions related to the 401(k) Plan totaled $16.9 million, $15.7 million and $15.5 million in 2025, 2024 and 2023, respectively.
14.Segment Information
The Company’s retail operations represent one operating segment and one reportable segment, which derives revenues from customers by selling full-line sporting goods and outdoor recreational products. The Company’s retail stores and online selling channels sell similar products and services, use similar selling processes, and sell to similar classes of customers. See Note 1 to the consolidated financial statements for information related to the products and services offered as well as business operations. The accounting policies of the Company's single reportable segment are the same as those described in the summary of significant accounting policies in Note 2 to the consolidated financial statements. All intercompany transactions within the single reportable segment are eliminated upon consolidation.
The Company’s chief operating decision maker (the “CODM”) is the Chief Executive Officer. The CODM allocates resources and assesses performance at a Company level using consolidated net income, which is a GAAP measure, as reported on the Consolidated Statements of Income. The CODM evaluates the Company's assets as reported on the Company's Consolidated Balance Sheets. The CODM evaluates significant segment expenses and makes decisions about the retail business based on the cost of goods we sell and the selling, general, and administrative expenses needed to sell those goods as reported on the Consolidated Statements of Income. See the Company's consolidated financial statements included in Part IV Item 15 for more information.
15.Subsequent Events
Our management evaluated events or transactions that occurred after January 31, 2026 through March 17, 2026, the issuance date of the consolidated financial statements, and identified the following matter to report:
On March 5, 2026, the Company's Board of Directors declared a quarterly cash dividend in the amount of $0.15 per share on the Company's common stock, payable on April 10, 2026 to stockholders of record as of the close of business on March 20, 2026.
Subsequent to January 31, 2026, the U.S. Supreme Court issued a decision related to certain tariffs that were previously subject to legal challenge. See Note 12 for further discussion.
Item 16. Form 10–K Summary
None.
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Index to Exhibits

Exhibit Number |  | Description of Exhibit
3.1 |  | Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on June 5, 2025).
3.2 |  | Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on March 7, 2025).
4.1 |  | Indenture, dated as of November 6, 2020, by and among Academy, Ltd., as issuer, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee and notes collateral agent (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on November 6, 2020).
4.2* |  | Description of Securities Registered Under Section 12 of the Exchange Act.
10.1 |  | Second Amended and Restated Credit Agreement, dated as of November 6, 2020, among Academy, Ltd., as Borrower, New Academy Holding Company, LLC, as Holdings, Associated Investors L.L.C. and Academy Managing Co., L.L.C., as Texas Intermediate Holdcos, the several lenders from time to time party thereto, Credit Suisse AG, Cayman Islands Branch, as the administrative agent and collateral agent and the several other parties named therein (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on November 6, 2020).
10.2 |  | Amendment No. 4, dated May 25, 2021, to the Second Amended and Restated Credit Agreement among Academy, Ltd., as Borrower, Credit Suisse AG, Cayman Islands Branch, as the administrative agent and collateral agent, the several lenders party thereto and the several other parties named therein (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 25, 2021).
10.3 |  | Conforming Changes Amendment to the Credit Agreement, dated May 17, 2023, which amends that certain Second Amended and Restated Credit Agreement, dated November 6, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), by and among Academy, Ltd., as Borrower, New Academy Holding Company, LLC, as Holdings, Associated Investors, L.L.C. and Academy Managing Co., L.L.C., as Texas Intermediate Holdcos, the lending institutions from time to time party thereto and Credit Suisse AG, Cayman Island Branch, as the Administrative Agent and the Collateral Agent and the several other parties named therein (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on August 31, 2023).
10.4 |  | Amended and Restated Term Loan Security Agreement, dated as of July 2, 2015, among Academy, Ltd., as Borrower, each of the subsidiaries listed on the signature pages thereto, and Morgan Stanley Senior Funding, Inc., as collateral agent for the benefit of the secured parties (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.5 |  | Amended and Restated Term Loan Pledge Agreement, dated as of July 2, 2015, among New Academy Holding Company, LLC, as Holdings, Associated Investors L.L.C. and Academy Managing Co., L.L.C, as Texas Intermediate Holdcos, Academy, Ltd., as Borrower, each of the subsidiaries listed on the signature pages thereto and Morgan Stanley Senior Funding, Inc., as collateral agent for the benefit of the secured parties (incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.6 |  | ABL Intercreditor Agreement, dated July 2, 2015, among JPMorgan Chase Bank, N.A., as agent for the ABL Secured Parties referred to therein, Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent for the Term Loan Secured Parties referred to therein, New Academy Holding Company, LLC, as Holdings, Associated Investors L.L.C. and Academy Managing Co., L.L.C, as Texas Intermediate Holdcos, Academy, Ltd., as Borrower, and each of the subsidiaries of the Borrower listed on the signature pages thereto (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.7 |  | Joinder to ABL Intercreditor Agreement, dated November 6, 2020, among JPMorgan Chase Bank, N.A., as agent for the ABL Secured Parties referred to therein, Credit Suisse AG, Cayman Islands Branch, as agent for the Term Loan Secured Parties referred to therein, and The Bank of New York Mellon Trust Company, N.A., as collateral agent for the Additional Debt Secured Parties referred to therein (incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1 filed on January 25, 2021).
10.8 |  | Joinder to ABL Intercreditor Agreement, dated November 6, 2020, among JPMorgan Chase Bank, N.A., as agent for the ABL Secured Parties referred to therein, and Credit Suisse AG, Cayman Islands Branch, as agent for the Term Loan Secured Parties referred to therein (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1 filed on January 25, 2021).

98

Exhibit Number |  | Description of Exhibit
10.9 |  | First Lien Intercreditor Agreement, dated November 6, 2020, among Credit Suisse AG, Cayman Islands Branch, as First Lien Collateral Agent and Authorized Representative for the Credit Agreement Secured Parties referred to therein, The Bank of New York Mellon Trust (incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1 filed on January 25, 2021).
10.10 |  | Amended and Restated ABL Security Agreement, dated as of July 2, 2015, among Academy, Ltd., as Borrower, each of the subsidiaries listed on the signature pages thereto, and JPMorgan Chase Bank, N.A., as collateral agent for the benefit of the secured parties (incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.11 |  | Amended and Restated ABL Pledge Agreement, dated July 2, 2015, among New Academy Holding Company, LLC, as Holdings, Associated Investors L.L.C. and Academy Managing Co., L.L.C, as Texas Intermediate Holdcos, Academy, Ltd., as Borrower, each of the subsidiaries listed on the signature pages thereto and JPMorgan Chase Bank, N.A., as collateral agent for the benefit of the secured parties (incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.12 |  | First Amended and Restated ABL Credit Agreement, dated July 2, 2015, among Academy, Ltd., as Borrower, New Academy Holding Company, LLC, as Holdings, Associated Investors L.L.C. and Academy Managing Co., L.L.C, as Texas Intermediate Holdcos, the lending institutions from time to time party thereto and JPMorgan Chase Bank, N.A., as the Administrative Agent, the Collateral Agent, the Letter of Credit Issuer and the Swingline Lender (incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.13 |  | Amendment No. 1 to First Amended and Restated ABL Credit Agreement, dated as of May 22, 2018, among Academy, Ltd., as Borrower, New Academy Holding Company, LLC, as Holdings, Associated Investors L.L.C. and Academy Managing Co., L.L.C, as Texas Intermediate Holdcos, each of the Guarantors party thereto, each of the lenders party thereto and JPMorgan Chase Bank, N.A., as the Administrative Agent, the Collateral Agent, the Letter of Credit Issuer and the Swingline Lender (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.14 |  | Amendment No. 2 to First Amended and Restated ABL Credit Agreement, dated as of November 6, 2020, among Academy, Ltd., as Borrower, New Academy Holding Company, LLC, as Holdings, Associated Investors, L.L.C. and Academy Managing Co., L.L.C., as Texas Intermediate Holdcos, the several lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as the letter of credit issuer, administrative agent and collateral agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on November 6, 2020).
10.15 |  | Amendment No. 3, dated March 30, 2023, to First Amended and Restated ABL Credit Agreement, among Academy, Ltd., as Borrower, New Academy Holding Company, LLC, as Holdings, Associated Investors, L.L.C. and Academy Managing Co., L.L.C., as Texas Intermediate Holdcos, the lending institutions from time to time party thereto and JPMorgan Chase Bank, N.A., as the Administrative Agent, the Collateral Agent, the Letter of Credit Issuer and the Swingline Lender (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on June 6, 2023)
10.16 |  | Amendment No. 4, dated March 8, 2024, to the First Amended and Restated ABL Credit agreement, dated as of July 2, 2015, among Academy, Ltd., as borrower, New Academy Holding Company, LLC, Associated Investors, L.L.C., and Academy Managing Co., L.L.C., as guarantors, the several lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as the letter of credit issuer, swingline lender, administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed on March 8, 2024).
10.17 |  | Notes Security Agreement, dated as of November 6, 2020, among Academy, Ltd., as Issuer, each of the guarantors listed on the signature pages thereto, and The Bank of New York Mellon Trust Company, N.A., as collateral agent for the benefit of the Secured Parties referred to therein (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1 filed on January 25, 2021).
10.18 |  | Notes Pledge Agreement, dated as of November 6, 2020, among Academy, Ltd., as Issuer, each of the guarantors listed on the signature pages thereto, and The Bank of New York Mellon Trust Company, N.A., as collateral agent for the benefit of the Secured Parties referred to therein (incorporated by reference to Exhibit 10.14 to the Registrant’s Registration Statement on Form S-1 filed on January 25, 2021).
10.19† |  | Form of Non-Employee Director Time-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on September 7, 2022).
10.20† |  | Form of 2025 Executive Performance-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on June 10, 2025).

99

Exhibit Number |  | Description of Exhibit
10.2 1† |  | Form of 2025 Executive Time-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on June 10, 2025).
10.2 2† |  | Form of 2025 Executive Time-Based Option Agreement (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed on June 10, 2025).
10.2 3† |  | Form of 2022 CEO Time-Based Option Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on June 7, 2022).
10.2 4† |  | Form of Q2 2023 Executive Time-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed on August 31, 2023).
10.2 5† |  | Form of Q2 2023 Executive Time-Based Option Agreement (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed on August 31, 2023).
10.2 6† |  | Form of 2023 Executive Time-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q filed on June 6, 2023).
10.27† |  | Form of 2023 Executive Time-Based Option Agreement (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed on June 6, 2023).
10.28† |  | Form of 2022 Executive Time-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q filed on June 7, 2022).
10.29† |  | Form of 2022 Executive Time-Based Option Agreement (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q filed on June 7, 2022).
10.3 0† |  | 2020 Omnibus Incentive Plan, as amended by the First Amendment (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 1, 2023).
10.3 1† |  | Form of Time-Based Option Agreement under 2020 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.10 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.32† |  | 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.33† |  | Form of 2020 CEO Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.14 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.34† |  | Form of 2020 Executive Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.15 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.35† |  | Form of 2019 CEO Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.16 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.36† |  | Form of 2019 Executive Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.17 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.37† |  | Form of 2018 CEO Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.18 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.3 8† |  | Form of 2018 Non Executive Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K filed on April 7, 2021).
10.39† |  | Form of 2016 Executive Option Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.21 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.4 0† |  | Form of Independent Non-Employee Director Restricted Unit Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.27 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.4 1† |  | Form of 2018 Executive Restricted Unit Agreement under 2011 Unit Incentive Plan (incorporated by reference to Exhibit 10.28 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.4 2† |  | Steven (Steve) P. Lawrence Amended and Restated Employment Agreement, dated April 26, 2023 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 27, 2023).

100

Exhibit Number |  | Description of Exhibit
10.4 3† |  | Samuel (Sam) J. Johnson Amended and Restated Employment Agreement, dated October 23, 2023 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 23, 2023).
10.4 4† |  | Earl Carlton (Carl) Ford, IV Employment Agreement, dated July 6, 2023 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 11, 2023).
10.4 5† |  | 2020 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.34 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.4 6† |  | Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.37 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed on September 23, 2020).
10.4 7† |  | Non-Employee Director Compensation Policy, effective June 5, 2025 (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q filed on September 2, 2025).
10.48† |  | Matt McCabe Amended and Restated Employment Agreement, dated June 25, 2023 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on June 11, 2024).
19.1 |  | Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the Registrant’s Annual Report on Form 10-K filed on March 20, 2025).
21.1* |  | Subsidiaries of the Registrant.
23.1* |  | Consent of Deloitte & Touche LLP (with respect to the financial statements of Academy Sports and Outdoors, Inc.).
31.1* |  | Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* |  | Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1** |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2** |  | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97.1†* |  | Policy Relating to Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97.1 to the Registrant's Annual Report on Form 10-K filed on March 21, 2024).
101.INS |  | XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document
101.CAL |  | Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF |  | Inline XBRL Taxonomy Definition Linkbase Document
101.LAB |  | Inline XBRL Taxonomy Label Linkbase Document
101.PRE |  | Inline XBRL Taxonomy Presentation Linkbase Document
104 |  | The cover page for the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026 has been formatted in Inline XBRL.
* |  | Filed herewith
** |  | This certification accompanies each report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
† |  | Management contract or compensatory plan or arrangement

The agreements and other documents filed as exhibits to this Annual Report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
101

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report on Form 10-K to be signed on March 17, 2026 on its behalf by the undersigned, thereto duly authorized.

ACADEMY SPORTS AND OUTDOORS, INC.

By: | /s/ | EARL CARLTON FORD, IV
| Earl Carlton Ford, IV
| Executive Vice President and Chief Financial Officer
| (principal financial officer and principal accounting officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature |  | Title |  | Date
/s/ | STEVEN LAWRENCE |  | Chief Executive Officer and Director |  | March 17, 2026
| Steven Lawrence |  | (principal executive officer) |  |
/s/ | EARL CARLTON FORD, IV |  | Executive Vice President and Chief Financial Officer |  | March 17, 2026
| Earl Carlton Ford, IV |  | (principal financial officer and principal accounting officer) |  |
/s/ | KEN C. HICKS |  | Chairman of the Board |  | March 17, 2026
| Ken C. Hicks |  |  |  |
/s/ | WENDY A. BECK |  | Director |  | March 17, 2026
| Wendy A. Beck |  |  |  |
/s/ | MICHAEL P. DASTUGUE |  | Director |  | March 17, 2026
| Michael P. Dastugue |  |  |  |
/s/ | SHANNON HENNESSY |  | Director |  | March 17, 2026
| Shannon Hennessy |  |  |  |
/s/ | CLAY M. JOHNSON |  | Director |  | March 17, 2026
| Clay M. Johnson |  |  |  |
/s/ | BRIAN T. MARLEY |  | Director |  | March 17, 2026
| Brian T. Marley |  |  |  |
/s/ | TOM M. NEALON |  | Director |  | March 17, 2026
| Tom M. Nealon |  |  |  |
/s/ | THERESA E. PALERMO |  | Director |  | March 17, 2026
| Theresa E. Palermo |  |  |  |
/s/ | MONIQUE PICOU |  | Director |  | March 17, 2026
| Monique Picou |  |  |  |
/s/ | BERYL B. RAFF |  | Director |  | March 17, 2026
| Beryl B. Raff |  |  |  |
/s/ | JEFF C. TWEEDY |  | Director |  | March 17, 2026
| Jeff C. Tweedy |  |  |  |

102

ACADEMY SPORTS AND OUTDOORS, INC.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)

|  | Balance at beginning of period |  | Charged to costs and expenses |  | Deductions |  | Balance at end of period
January 31, 2026: |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 2,752 |  |  | 1,069 |  |  | (2,029) |  | (1) | $ | 1,792 |
Sales return allowance |  | 4,400 |  |  | 4,300 |  | (2) | (4,300) |  | (2) | 4,400 |
Inventory shrink adjustments |  | 18,937 |  |  | 89,360 |  |  | (100,576) |  | (3) | 7,721 |
Self-insurance reserves |  | 25,232 |  |  | 91,124 |  |  | (87,131) |  | (4) | 29,225 |
February 1, 2025: |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 2,217 |  |  | $ | 1,936 |  |  | $ | (1,401) |  | (1) | $ | 2,752 |
Sales return allowance |  | 6,400 |  |  | 10,500 |  | (2) | (12,500) |  | (2) | 4,400 |
Inventory shrink adjustments |  | 11,822 |  |  | 82,233 |  |  | (75,118) |  | (3) | 18,937 |
Self-insurance reserves |  | 25,010 |  |  | 74,941 |  |  | (74,719) |  | (4) | 25,232 |
February 3, 2024: |  |  |  |  |  |  |  |
Allowance for doubtful accounts |  | $ | 2,004 |  |  | 1,107 |  |  | (894) |  | (1) | $ | 2,217 |
Sales return allowance |  | 6,100 |  |  | 11,200 |  | (2) | (10,900) |  | (2) | 6,400 |
Inventory shrink adjustments |  | 4,960 |  |  | 99,444 |  |  | (92,582) |  | (3) | 11,822 |
Self-insurance reserves |  | 30,170 |  |  | 70,509 |  |  | (75,669) |  | (4) | 25,010 |

(1) Represents write-offs to the reserve.
(2) Represents the monthly increase (decrease) in the required reserve based on the Company's evaluation of anticipated merchandise returns.
(3) Represents the actual inventory shrinkage experienced at stores.
(4) Represents claim payments for self-insured claims.
103