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Item 1. Business

2024-03-21 compared with 2023-03-16 · 77 added, 105 removed, 225 unchanged (45% of the section changed)

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 28, 2023.

This discussion contains forward-looking statements that involve risks and uncertainties.

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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.

Academy Sports + Outdoors is a leading full-line sporting goods and outdoor recreation retailers in the United States.

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 282 stores across 18 contiguous states.

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• Core customers comprising active families that we support with one-stop shop convenience.

• Significant whitespace opportunity for new stores for both in-fill and adjacent geographies and new markets.

• 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.

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In 2023, we purchased merchandise from approximately 1,400 vendors.

For 2022, 2021 and 2020 no vendor represented more than 11%, 11%, and 12% of our total purchases, respectively.

We have preferred access to hundreds of well-recognized national brands, such as Nike, Under Armour, adidas, Winchester, Brooks, Crocs, Wilson, Spaulding, Yeti, the North Face, and Columbia Sportswear, which are critical to our market penetration.

For 2023, 2022 and 2021 no vendor represented more than 11% of our total purchases.

We have preferred access to hundreds of well-recognized national brands, such as Nike, Under Armour, adidas, Winchester, Columbia Sportswear, Brooks, Skechers, Yeti 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, and we play a critical role in delivering customer volume for these brands.

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As such, we receive favorable product allocations from leading suppliers.

Our private label brand portfolio consists of 20 brands, including Academy Sports + Outdoors, Magellan Outdoors, BCG, O'rageous, Game Winner, Outdoor Gourmet and Freely.

Our private label brand portfolio consists of 19 brands, including Academy Sports + Outdoors, Magellan Outdoors, BCG, O'rageous, Game Winner, Outdoor Gourmet, Freely 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.

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Approximately 55% of our customers purchased a private label brand from us in 2023.

As of January 28, 2023, we generally organized our merchandise in four divisions made up of sixteen categories as follows:

As of February 3, 2024, 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, sunglasses, backpacks and sports bags

Outdoors Camping Coolers and drinkware, camping accessories and camping equipment

Fishing Marine equipment and fishing rods, reels, baits and equipment

Hunting Firearms, ammunition, archery and archery equipment, camouflage apparel, waders, shooting accessories, optics, airguns and hunting 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, and volleyball

Team sports Team and specialty sports equipment, including baseball, football, basketball, soccer, golf, racket sports, and volleyball, and backpacks and sports bags

Recreation Patio furniture, outdoor cooking, wheeled goods (bicycles, skateboards and other ride-on toys), trampolines, play sets, watersports and pet equipment

Front end Electronics, watches, and front-end (consumables, batteries, etc.)

Front end Electronics, watches, sunglasses and front-end (consumables, batteries, etc.)

Apparel Outdoor and seasonal apparel Outdoor apparel, seasonal apparel, denim, work apparel, graphic t-shirts and accessories

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Work footwear Work and western boots, shoes and hunting footwear

Youth footwear Boys and girls athletic footwear

Youth footwear Boys and girls footwear

Athletic footwear Running shoes, athletic lifestyle and training shoes

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Fiscal Year Ended

January 28, 2023 January 29, 2022 January 30, 2021

February 3, 2024 January 28, 2023 January 29, 2022

Merchandise sales (1)

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Net sales $ 6,159,291 $ 6,395,073 $ 6,773,128

(1) Certain products and categories were re-categorized among various categories and divisions, respectively, during 2023 as compared to prior years in order to better align with our current merchandising strategy and view of the business.

As a result, we have reclassified sales between divisions for 2022 and 2021 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 consist of 10.7%, 10.7% and 9.3% of merchandise sales for 2023, 2022 and 2021, respectively.

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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, with no store tethered to crowded mall spaces.

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.

Other than stores that we may temporarily own, and for which we are in the process of executing sale-leaseback transactions, we do not own our retail locations.

Of the 282 stores operated as of February 3, 2024, 281 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 passed their passion for us on to the next generation, enabling us to benefit from strong customer loyalty and shopping frequency.

As of January 28, 2023, the number of stores that we operated, exclusively in the U.S., by state was as follows:

As of February 3, 2024, the number of stores that we operated, exclusively in the U.S., by state was as follows:

State Number of Stores

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West Virginia 1

We have a strong and growing presence in some of the fastest-growing MSAs in the United States, including Austin, Atlanta and Raleigh, which we believe presents significant growth opportunities in both our core markets and outside our footprint.

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 with stores in in-fill markets, where we already have an established presence, and in adjacent markets, markets nearby to current locations which are not fully represented.

We expect to open 13 to 15 stores in fiscal 2023.

Our marketing strategy is designed to reinforce our fun brand, broad selection of merchandise, and our value offering.

We regularly analyze consumer trends on media consumption and rely on various media channels to communicate with our customers.

We are continually expanding our targeting and personalization capabilities to deliver the right products and messages at the right time and in the media channel they prefer.

Our media mix is a blend of digital and traditional, including paid search, email, affiliate, and social media along with linear and streaming broadcast and radio, print, outdoor and direct mail.

Our advertising features a broad assortment of products and messaging tailored to the current selling season.

We utilize certain customer data obtained from our customer relationship management, or CRM, platform, which enable us to create effective customer-targeting strategies.

Our current CRM programs focus on welcoming our first-time customers, recognizing our top spenders, reactivating our lapsed customers and cross-selling our category customers.

We also utilize customer demographic data that we capture to better localize our marketing, to know when our customers buy from us and what items they purchase.

With over 45 million customers in our database, there is ample opportunity to increase our communication directly with our customers via one-on-one marketing.

In addition to our CRM tools, our Academy Credit Card program also provides data to track our customers’ purchases across all channels, giving us the ability to better serve and target those loyal customers.

We often create events at our stores to drive customer traffic.

These events range from small, private local league shopping nights to large grand opening celebrations to commemorate new store openings that offer various indoor and outdoor activities, athlete and celebrity appearances, fun activities to test our products and meet our suppliers along with food and games.

We also leverage sports championship moments when professional or collegiate sports teams in our markets win league titles.

At these events we extend our store hours and offer official commemorative merchandise and may also host autograph signings and/or meet-and-greet events with players or coaches from the championship team.

We are committed to making a positive impact on the communities we serve and partner with over 700 organizations, including youth sports leagues that reach more than 500,000 participants.

We also partner with school districts, Historically Black Colleges and Universities (HBCUs), local parks, hunting and fishing organizations, military bases and local first responders.

We believe there is significant near-term opportunity for expansion in both new and existing markets.

Our marketing approach is anchored in helping active minded 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 the broad selection of fun categories, top national and private brands at a compelling value within our sporting goods assortment.

We analyze first party data from across our customer data platform and data science environments, customer insights studies and retail industry market share data sources to develop annual and seasonal go to market strategies that lead to creation of engaging content and customer experiences that are communicated across a diverse range of owned and paid media channels.

Additionally, we utilize the 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 designed, influencer and customer created content.

These campaigns are executed across a blend of digital and traditional, 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.

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.

The Academy Credit Card program 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 750 organizations, including youth sports leagues that reach approximately 400,000 participants.

We also partner with school districts, Historically Black Colleges and Universities (HBCUs), collegiate and professional sports properties, local parks, hunting and fishing organizations, military bases and local first responders.

Distribution Centers

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These distribution centers are strategically located throughout our footprint to efficiently serve our retail locations and have the capacity to service up to approximately 120 stores per distribution center.

Information Technology

Our information technology 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, financial reporting and accounting functions.

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 the foundation of our merchandising and marketing functions;

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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.

Our net sales and profits are also impacted by the August/September back-to-school selling season during the third quarter and November/December holiday selling season, and in part by the sales of cold weather sporting goods and apparel during the fourth quarter.

Our Team Members

Our mission is to provide “Fun for All” and a critical component to our success is our people.

As of January 28, 2023, we employed approximately 22,000 team members in the U.S.

and ten team members in Hong Kong.

As of February 3, 2024, we employed approximately 22,000 team members in the U.S.

and eleven team members in Hong Kong.

Of those team members, approximately 50% were full-time and 50% were part-time.

Our employment levels fluctuate over the course of the year mainly due to the seasonality of our business.

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.

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and a company holiday party and other team member appreciation events.

In 2022, the Company increased the annual merit and adjustment pool over prior years to recognize and reward our team member’s efforts and support in a unique and challenging year.

Workplace, Health and Safety.

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Information about our Executive Officers

Below is a list of our executive officers, their respective ages as of January 28, 2023 and a brief account of the business experience of each of them.

Below is a list of our executive officers, their respective ages as of March 21, 2024 and a brief account of the business experience of each of them.

Name Age Position

Hicks 70 Chairman, President and Chief Executive Officer

Mullican 47 Executive Vice President and Chief Financial Officer

Lawrence 55 Executive Vice President and Chief Merchandising Officer

Johnson 56 Executive Vice President, Retail Operations

Sherry Harriman 53 Senior Vice President, Logistics and Supply Chain

Jamey Traywick Rutherford 49 Senior Vice President, Omnichannel

Manish Maini 49 Senior Vice President, Chief Information Officer

Ennis 53 Senior Vice President, Chief Human Resources Officer

Casares 47 Senior Vice President, General Counsel and Secretary

Hicks has served as the Chairman and our President and Chief Executive Officer since May 2018.

Hicks has served as a member of the board of managers of New Academy Holding Company, LLC (our predecessor company) since May 2017 and as a member of the board of directors of Academy Sports and Outdoors, Inc.

since June 2020.

Hicks served on the compensation committee of the board of managers of New Academy Holding Company, LLC from May 2017 to May 2018.

Hicks 71 Executive Chairman

Steven (Steve) P.

Lawrence 56 Chief Executive Officer

Samuel (Sam) J.

Johnson 57 President

Earl Carlton (Carl) Ford IV 46 Executive Vice President and Chief Financial Officer

Matthew (Matt) M.

McCabe 53 Executive Vice President and Chief Merchandising Officer

Hicks has served as the Executive Chairman of the Board of Directors since June 1, 2023.

Hicks served as Chairman of the Board and Chief Executive Officer from May 2018 to June 2023.

Hicks has served as a member of the Board of Directors since June 2020 and served as a member of the Board of Managers of New Academy Holding Company, LLC from May 2017 to June 2020.

Hicks previously served as President and Chief Executive Officer at Foot Locker, Inc.

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Penney Company, Inc., Payless ShoeSource, Home Shopping Network, May Department Stores Company, and McKinsey & Company.

Hicks has served on the board of directors of Avery Dennison Corporation since July 2007 and served on the board of directors of Whole Foods Market, Inc.

Hicks has served on the board of directors of Avery Dennison Corporation since July 2007, and as Chairman of the board of directors of Guitar Center Holdings, Inc.

since October 2023.

Previously, Mr.

Hicks served on the board of directors and the Compensation Committee of Whole Foods Market, Inc.

from May 2017 to August 2017.

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He also earned a Masters of Business Administration with highest distinction from Harvard Business School.

Mullican has served as our Executive Vice President and Chief Financial Officer since January 2018.

He previously served as our Executive Vice President and General Counsel from February 2017 to January 2018.

Prior to joining Academy Sports + Outdoors, Mr.

Mullican served as the Managing Director of Aureus Health Services, a specialty pharmacy owned by Meijer, Inc.

Before being named Managing Director at Aureus, Mr.

Mullican held several leadership roles at Meijer, including Vice President of Business Development, and Vice President and Assistant General Counsel.

Additionally, Mr.

Mullican served as Divisional Counsel and Assistant Secretary at Family Dollar Stores, Inc., and Associate General Counsel and Assistant Secretary at Horizon Lines, Inc.

Mullican holds a Bachelor of Arts in Communication from North Carolina State University and a Juris Doctor degree from the University of Chicago Law School.

Steven (Steve) P.

Lawrence has served as our Executive Vice President and Chief Merchandising Officer since joining the Academy Sports + Outdoors team in February 2019.

Prior to joining Academy Sports + Outdoors, Mr.

Lawrence was President and Chief Executive Officer at francesca’s.

Lawrence has served as Chief Executive Officer and a member of the Board of Directors since June 2023.

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.

Lawrence also spent nearly 12 years working in various merchandising leadership roles at J.C.

Penney after 10 years at Foley’s.

Lawrence also served on the board of directors of francesca’s from October 2016 to January 2019.

Penney after 10 years at Foley’s/May Co.

Lawrence obtained his Bachelor of Business Administration in Finance from the University of Notre Dame.

Samuel (Sam) J.

Johnson has served as our Executive Vice President, Retail Operations since joining the Academy Sports + Outdoors team in April 2017.

Prior to joining Academy Sports + Outdoors, Mr.

Johnson has served as President since October 2023.

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.

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Prior to hhgregg, Inc., he spent more than 20 years in various leadership roles with Sears Holdings Corporation, including Vice President of Small Stores.

Harriman has served as our Senior Vice President, Logistics and Supply Chain since joining the Academy Sports + Outdoors team in August 2018.

Prior to joining Academy Sports + Outdoors, Mrs.

Harriman spent 29 years at Walmart, Inc., where she served in various logistics and operations roles until she was promoted to Regional Vice President – Logistics in 2007.

In 2010, she was promoted to Divisional Vice President – Supply Chain for Florida and Puerto Rico, where her team delivered innovative Supply Chain solutions that supported omnichannel strategies and disaster relief initiatives.

Harriman holds a Bachelor of Business Administration from the University of Wisconsin-Eau Claire and a Master of Business Administration from John Brown University.

Jamey Traywick Rutherford has served as our Senior Vice President, Omnichannel since joining the Academy Sports + Outdoors team in May 2018.

Prior to joining Academy Sports + Outdoors, Ms.

Traywick Rutherford spent over 17 years at AutoZone where she served in various e-commerce roles until she was promoted to Vice President, e-commerce in 2010.

She transitioned to Vice President, Merchandising in 2017.

She holds a Bachelor of Science in Environmental Science from the University of Denver, and a Master of Science in e-commerce from the University of Memphis.

Manish Maini has served as our Senior Vice President, Chief Information Officer since joining the Academy Sports + Outdoors team in June 2017.

Prior to joining Academy Sports + Outdoors, he served as the Chief Information Officer and Senior Vice President at The Children’s Place U.S.

where he led a 120-member team, and was responsible for the development and implementation of the company-wide IT strategy.

Maini also spent nine years at Ann, Inc., formerly Ann Taylor Stores Inc., where he served in various IT leadership roles, including Vice President of Enterprise Systems.

Maini holds a Bachelor of Engineering, Electronics and Communication from STJ Institute of Technology in Karnatak, India.

William (Bill) S.

Ennis has served as our Senior Vice President, Chief Human Resources Officer since March 2016.

Ennis joined the Academy Sports + Outdoors team as Vice President of Human Resources in April 2008 and served in that role until October 2010 when he was appointed as Senior Vice President, Human Resources.

Prior to joining Academy Sports + Outdoors, Mr.

Ennis spent over 19 years with Stage Stores, May Department Stores and Federated Department Stores in multiple capacities including human resources, stores, buying group, store operations and finance areas.

He currently sits on advisory boards for the Texas A&M Center for Retailing Studies and Texas Retailers Education Foundation, and he is also the governing body chair for the Houston HR Leadership Summit.

Ennis graduated with a Bachelor of Arts in Economics from the University of Texas.

Casares has served as our Senior Vice President, General Counsel and Secretary since March 2018.

He joined the company in July 2013 as Senior Director, Associate General Counsel and served as Vice President, Associate General Counsel and Assistant Secretary from March 2016 to March 2018.

Prior to joining Academy Sports + Outdoors, Mr.

Casares served as an Associate Attorney at the global law firm, Vinson & Elkins LLP, from 2008 to 2013, where he advised major and middle-market companies with mergers and acquisitions, private equity, corporate governance and capital markets.

He also served in a similar capacity as an Associate Attorney at the global law firm, Latham & Watkins LLP, from 2006 to 2008.

Additionally, Mr.

Casares has a background in finance and consulting after serving as an Associate at Growth Capital Partners.

L.P., a Strategy Consultant at KPMG Consulting, Inc., and an Analyst at Merrill Lynch & Co.

Casares holds a Bachelor of Business Administration in Finance from the University of Notre Dame and a Juris Doctor degree from Stanford Law School.

Earl Carlton (Carl) Ford IV has served as Executive Vice President and Chief Financial Officer since July 2023.

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.

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.

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.

McCabe holds a Bachelor of Science from Miami University.

Intellectual Property

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business