ASO 10-K & 10-Q changes, risk factors and insider trading

•changes to raw materialgasoline and commodityfuel prices; and

A significant portion of the merchandise that we sell is manufactured in foreign countries, including China,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 importtariffs 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 Governmentgovernment 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 conditioncondition, 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 were to cause a disruption of trade from the countries in which our suppliers are located, our inventory levels may be reduced or the costs of our merchandise may increase.purchase.

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, duringwe thehave COVID-19experienced, pandemicand may continue to experience, disruptions resulting from public health events, significant changes in China,trade wepolicy, experiencedlabor ashortages, temporarygeopolitical closuretensions, and constraints within global transportation and logistics networks, any of thirdwhich partymay manufacturer facilities, interruptionsresult in laborincreased andcosts, product supply, and restrictions on the exportdelays, or shipmentreduced availability of our products, which resulted in disruptions in our supply chain in China. Also, for example on February 10, 2025 the Trump Administration has imposed 25% duties on all imports of steel, aluminum, and their derivative products, effective March 12, 2025.merchandise. The imposition of trade tariffs, sanctions 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.

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, preventdefend 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 futurefuture, further experience,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.

Updating our existing information systems subjects us to numerous additional risks, including:

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. IfRapid we are not successfulchanges in managingtrade ourpolicy, tariffs, or sourcing strategies may also contribute to inventory balances,forecasting ourchallenges, resultsincluding the timing and quantity of operationsinventory maypurchases, bewhich negativelycould affected.increase the risk of excess inventory, supply shortages, or mismatches between product availability and consumer demand.

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,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 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.

Our customers are increasingly using computers, tablets, mobile phones and other devices to shop in our stores and on-lineonline 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:

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 relatedother laws and related regulations have been enacted and additional lawslaws, regulations, and regulationsstandards are under consideration by various state and federal legislatureslegislatures, regulatory authorities, and regulatorystandards authorities.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.

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, marketingmarketing, technological, and other resources than us. We compete directly or indirectly with the following categories of companies:

•catalogue and internet retailers;

•suppliers that sell directly to customers.customers; and

Pressure from our competitors could require us to reduce our prices or increase our spending for advertisingadvertising, promotion, and promotion.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. Increased competition in markets in which we have stores or theThe adoption by competitors of innovative store formats, aggressive pricing, promotion or delivery strategies and alternative retail sale methods,models, such as themobile-first Internet,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. Additionally, theThe ability of consumers to compare prices on a real-time basis through the use of smartphonessmartphones, apps, and digital technology puts additional pressure on us to maintain competitive pricesprices, vis-à-visinventory our competitors. We may require significant capital in the future to sustain or grow our business, including our storeavailability, and e-commercefulfillment activities, due to increased competition, and 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.capabilities.

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,operations. and weWe may also need to expand our distribution infrastructure, including the addition of new distribution centers.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.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.

We typically lease our stores under operating leases with initial terms of approximately 15 to 20 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 ininto 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. In 2020 and 2021, in response to the then-current retail environment, we temporarily stopped new store openings, before resuming in 2022 and continuing through the date of this Annual Report. 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.

Recent or potentialPotential 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.

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 the civil unrest in the United States, such as that which occurred in late May 2020 in response to reported incidents of police violence.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.

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 inimpacting the Gulf Coast region of Mexico,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.

The cost of our merchandise ishas affected,increased inand part,may bycontinue theto priceincrease ofdue to, among other factors, higher raw materials.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.

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, 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.

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 2024,2025, purchases from our largest vendor represented approximately 11%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. If there is a disruption in supply from a principal supplier (which can occur for various reasons in or out ofIn the controlpast offew these suppliers, including as a result of public health emergencies, and measures taken by the Chinese government or other governments in response to such events),years, we mayhave 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. For example, during fiscal 2021, we beganbegun 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. Over the past year, we have seen improvement to these constraints, resulting in decreased freight 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.

We are a federally licensed firearms dealer and we sell firearms, ammunition, and related accessories.accessories, including suppressors. Firearms represented approximately 6% of our net sales in 2024.2025. 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 new policy toemphasizing underscore “zero tolerance” for willful violations of the law by federally licensed firearms dealers; in 2025 that putpolicy publicwas safetyrepealed. atFederal, risk.state, Inand 2024,local ATFagencies (acontinue lawto enforcementregulate agencyand inenforce thecompliance DOJ)requirements revokedapplicable 147 federalto firearms licenses and 157 in 2023, compared to 88 licenses revoked in 2022 and five in the last six months of 2021.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, the UKBA,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, the UKBAFCPA or other U.S. and foreign laws and regulations applicable to us.

We are, and may in the future, be subject to claims, demands and lawsuits, and our insurance or indemnities may not be sufficient to cover damages related to those claims and lawsuits.

•the procurement, transportation, storage, distribution and sale of firearmsfirearms, ammunition, and ammunition,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);

•the operations of a third-party owned fleet of trucks for distribution purposes, including transportation of hazardous materials by such fleet;

We sell firearms, ammunition, and related accessories.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.

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, FreelyFreely, R.O.W., Redfield and R.O.W.,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.

As of FebruaryJanuary 1,31, 2025,2026, we had approximately $88.8$85.8 million outstanding under the Term Loan and $400.0 million outstanding under the Notes, all of which is secured. As of FebruaryJanuary 1,31, 2025,2026, 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 $955.5$992.4 million (which is subject to customary borrowing conditions, including a borrowing base), and outstanding letters of credit of $9.3$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 FebruaryJanuary 1,31, 2025,2026, 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.

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 FebruaryJanuary 1,31, 2025,2026, we had no borrowings outstanding under the ABL Facility, and an available borrowing capacity under the ABL Facility of approximately $955.5$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.

Certain provisions of our amended and 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.

•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 three-yearterms termsuntil the 2028 Annual Meeting at which time our Board of Directors will be elected annually;

•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; anddirectors.

Our amended and 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 amended and 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 amended and 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 amended and 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 amended and 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 amended 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.

The following discussion and analysis of our financial condition and results of operations for the year ended FebruaryJanuary 1,31, 20252026 (“20242025”) and the year ended February 3,1, 20242025 (“20232024”) should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report for the fiscal year ended FebruaryJanuary 1,31, 20252026 (this “Annual Report”). Year-to-year comparisons between 20232024 and 20222023 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 3,1, 2024.2025.

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,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.

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, apparel, sports & recreationrecreation, apparel, and footwear (representing 30%,31%, 27%,22%, 23%27% and 20% of our 20242025 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/September back-to-school selling season during the second and third quarter,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 FebruaryJanuary 1,31, 2025,2026, we operated 298322 stores that range in size from approximately 40,000 to 130,000 gross square feet, with an average size of approximately 70,000 gross square feet, throughout 1921 contiguous states located primarily in the southern United States. Our stores are supported by approximately 22,00023,000 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,capabilities such as our mobile app, optimizing the website experience and upgrading our fulfillment capabilities.

How We Assess the Performance of Our Business and Recent Trends

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-uppick 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,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.

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 marketchanges in product mix and salespricing, promotions.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 have deployeddeploy several new tools over recent years to improve inventory handling and vendor management, including third-party programs to analyze our inventory stock andstock, execute a disciplined markdown strategy and improve our inventory management throughout the year at every location. This implementation, along with other factors, has allowed us to improve our inventory management in stores over the past few years. We have coupled these tools with the data we have been able to collect from our AcademymyAcademy Credit CardRewards 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 brand productsbrands 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.margin rate.

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 2024,2025, we opened 1624 new stores. We plan to open 20 to 25 stores in fiscal year 20252026 and we are continuously evaluating available locations that meet our size requirements and market criteria. Our strategic real estate approach, including the 3963 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. Our costCost of goods sold includes the direct cost of merchandise and costs related to procurement, warehousing and distribution,distribution. whichThese costs consist primarily of tariffs, payroll and benefits, distribution center occupancy costscosts, depreciation and freightfreight, 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 duties, 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.

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 23.3% in 2023 to 24.8% in 2024.2024 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 a control of 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).

Interest Expense. Interest expense includes regular interest payable related to our Term Loan, Notes and ABL Facility (see Note 4 to the accompanying financial statements) and the amortization of our deferred loan costs and original issuance discounts associated with the acquisition of the debt. In 2022 and 2023, we utilized cash on hand to voluntarily prepay $100 million of outstanding borrowings on our Term Loan. However, this prepayment in principal on our Term Loan was largely offset by increases made by the Federal Reserve to the federal funds benchmark rate during 2022 and 2023, resulting in a decrease in interest expense in 2024 compared to 2023.

A discussion regarding Results of Operations and Analysis of Financial Condition for the fiscal year ended February 3,1, 2024,2025, as compared to the fiscal year ended JanuaryFebruary 28,3, 2023,2024, 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 3,1, 2024.2025.

NetWe Sales.opened Net24 salesnew decreasedstores $225.8since million,the orend 3.7%,of inthe 2024 fiscal yearyear, 20245 (aof 52which weekopened year)throughout overthe 2025 fourth quarter. During the 2025 fiscal yearyear, 2023these (a24 53stores weekgenerated year). This is primarily a result of decreased comparable sales, which was partially offset by $88.5$142.8 million of net sales, including e-commerce, generated by 16 new stores opened since the end of the 2023 fiscal year.e-commerce. Since re-launching our new store program in 2022, we have opened 3963 new stores, 2339 of which have been open for at least twelve months. Over the last twelve months, those 2339 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.

E-commerce net sales represented 10.5%11.7% of merchandise sales for 2024fiscal year 2025 compared to 10.7%10.5% for 2023.fiscal year 2024. E-commerce net sales increased 13.6% for fiscal year 2025 compared to fiscal year 2024.

Gross Margin. Gross margin decreasedincreased $98.8$94.2 million, or 4.7%.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 decreasedincreased 4090 basis points from 34.3% in 2023 to 33.9% in 2024.2024 to 34.8% in 2025. The decreaseincrease of 4090 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.

•10 basis points of unfavorability in merchandise margin as a result of a higher sales mix of hard goods Selling, General and Administrative Expenses. SG&A expenses increased $40.5$120.6 million, or 2.8%,8.2%, to $1,593.4 million in 2025 from $1,472.8 million in 2024 from $1,432.4 million in 2023,2024, primarily as a result of our increased strategic investments of $66.4$109.0 million, including $84.8 million in new stores and technology$13.1 and deleverage from decreased sales. This was partially offset by an additional week of SG&A expensemillion in the prior year of approximately $17.1 million as fiscal year 2023 was a 53-week year.technology.

Write offWrite-off of Deferred Loan Costs. Write offWrite-off of Deferreddeferred Loanloan Costscosts increaseddecreased by $0.4 million for thefiscal year-to-dateyear 20242025 when compared with thefiscal year-to-dateyear 2023,2024, in connection with the amendment in the 2024 first quarter that led to the write offwrite-off of deferred loan costs on the ABL Facility.

Interest Expense. Interest expense decreased $9.2$0.7 million, or 19.9%,1.8%, to $36.2 million in 2025 from $36.9 million in 2024 from $46.1 million in 2023 resulting2024, primarily fromdriven by lower interest rates and a lower outstanding balance on our long-term debt, driven by a voluntary prepayment of $100.0 million under the Term Loan made on February 1, 2024.Loan.

Other (Income),Income, net. Other (Income),income, net, increaseddecreased $4.0$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 when(see comparedNote to2) 2023,as primarilywell drivenas bylower increasedinterest money market investmentsrates in the current year.

Income Tax Expense. Income tax expense decreased $24.2$10.5 million to $109.3 million in 2025 as compared to $119.8 million in 2024 as compared to $144.0 million in 2023,2024, resulting primarily from a decrease in pre-tax income. ASO, Inc.'s effective tax rate for 20242025 was 22.3%22.5% compared to 21.7%22.3% in 2023.2024. The increase in effective tax rate was largelyprimarily driven by the decrease in pre-tax income in the current year, as well as decreased permanent adjustments related to stock compensation awards during 2024.year.

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,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.

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 use cash 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 FebruaryJanuary 1,31, 2025,2026, our cash and cash equivalents totaled $288.9$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.

As of FebruaryJanuary 1,31, 2025,2026, the Company's long-term debt consists of:

We predominantly lease store locations, distribution centers, office space and certain equipment under operating leases expiring between fiscal years 20242026 and 2044.2045. Operating lease obligations include future minimum lease payments under all of our non-cancelable operating leases at FebruaryJanuary 1,31, 2025.2026. In the fiscal year ended FebruaryJanuary 1,31, 2025,2026, we opened 1624 new locations. The following table summarizes our operating lease obligations by fiscal year:

(2) These balances include stores where we have an executed contract but have not taken possession of the location as of FebruaryJanuary 1,31, 2025.2026.

On December 4, 2024, the Company's Board of Directors authorizedapproved 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 2023previously Shareapproved Repurchaseshare Program.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 FebruaryJanuary 1,31, 20252026 (dollar amounts in thousands, except per share amounts):

The following table summarizes our quarterly dividend payments for the fiscal year ended FebruaryJanuary 1,31, 20252026 (amounts in thousands, except per share amounts):

On March 6,5, 2025,2026, the Company announced that the Board of Directors declared a quarterly cash dividend with respect to the quarter ended FebruaryJanuary 1,31, 20252026 of $0.13$0.15 per share of common stock, payable on April 17,10, 2025,2026, to stockholders of record as of the close of business on March 25,20, 2025.2026.

•$100.7$41.7 million decrease in net income; partially offset byand

•$71.7$99.9 million net increasedecrease in cash flows provided by operating assets and liabilities.liabilities; partially offset by

Any forward-looking statement made by us in this Quarterly Report speaks only as of the date of this Quarterly Report and areis expressly qualified in theirits entirety by the cautionary statements included in this Quarterly 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.

•risks associated with our reliance on internationally manufactured merchandise which exposes us to various international risks, including additional tariffs or changes to existing tariffs;

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited financial statements and related notes included elsewhere in this Quarterly Report for the thirteen and twenty-six weeks ended MayAugust 2,1, 2026 and our audited financial statements for the fiscal year ended January 31, 2026 and the section entitled “Management's Discussion and Analysis of Financial Condition and Results of Operations” included in the Annual Report.

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 the “current quarter,” “2026 firstsecond quarter,” or similar reference refers to the thirteen week period ended MayAugust 2,1, 2026, and any reference to the “prior year quarter,” “2025 firstsecond quarter” or similar reference refers to the thirteen week period ended MayAugust 3,2, 2025. Unless otherwise specified, all comparisons regarding the current period of 2026 are made to the corresponding period of 2025.

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 outdoor, apparel, sports and recreation, apparel, and footwear (representing 30%,29%, 25%,28%, 24%, and 21%19% of our 2026 firstsecond quarter 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.

As of MayAugust 2,1, 2026, we operated 324327 stores that range in size from approximately 40,000 to 130,000 gross square feet, with an average size of approximately 70,000 gross square feet, throughout 21 contiguous states located primarily in the southern United States. Our stores are supported by approximately 22,000 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.

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, inventoryappropriate purchasesourcing quantities and timing,diversification, strategic pricing and promotional adjustments to maintain value for our customers, diversifyingand sourcingother operational decisions to shiftmanage countrythe impact of origin,tariffs andon vendorour negotiations.business.

Comparable Sales. Comparable sales include stores open after thirteen full fiscal months as well asmonths, all e-commerce sales.sales, and credit card revenue. 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 Quarterly Report regarding our comparable sales may not be comparable to similar data made available by other retailers. Stores which have been closed for an extended period of time are removed from the calculation. E-commerce sales include omni-channelomnichannel sales fulfilled by our stores. For example, all buy-online-pickup-in-storebuy-online-pick up-in-store (“BOPIS”) transactions are allocated to e-commerce sales for the purpose of comparable sales, despite the fact that our customers pick-uppick up these purchases from a specific store.

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 the 2026 firstyear-to-date second quarter, 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.

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 2026 firstsecond quarter, we opened twothree new stores. Our strategic real estate approach, including the 6568 stores opened since fiscal year 2021, has positioned us effectively for continued expansion.

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 decreased from 28.8%26.9% in the 2025 firstyear-to-date second quarter to 28.1%26.7% in the 2026 firstyear-to-date second quarter. This decrease was a result of increased sales and ongoing expense discipline across the organization in addition to lapping the Jordan Brand launch in the 2025 first quarter.organization. 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.

Interest Expense. Interest expense includes regular interest payable related to our TermNotes, Loan,ABL NotesFacility, and ABLTerm FacilityLoan (see Note 4 to the accompanying financial statements) and the amortization of our deferred loan costs and original issuance discounts associated with the acquisition of the debt. During the second quarter of 2026, Academy, Ltd. issued $500 million aggregate principal amount of its 5.875% Senior Secured Notes due 2031 (the “Notes”). We used the proceeds from the Notes to redeem the 2020 Notes and voluntarily prepay the Term Loan in full (see Note 4). This pay down resulted in decreased interest expense in year-to-date 2026 as compared to the prior year period, and we anticipate it will result in decreased interest expense compared to 2025 throughout the remainder of 2026.

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 as a result of the purchase of transferable tax credits, the effect of cross-border tax laws, and changes in income before income taxes and the effect of cross border tax laws.taxes.

Thirteen Weeks Ended MayAugust 2,1, 2026 Compared to Thirteen Weeks Ended MayAugust 3,2, 2025

Net Sales. Net sales increased $90.6$47.4 million, or 6.7%,3.0%, in the 2026 firstsecond quarter compared to the prior year firstsecond quarter, which was driven by increased sales of 11.7% in the outdoor merchandise division, 6.2%6.3% in the sports and recreation merchandise division and 4.4% in the outdoor merchandise division, 4.7%partially offset by decreased sales of 1.0% in the footwear merchandise division while the apparel merchandise division andremained 2.8%relatively in the footwear merchandise division.constant.

We opened 21 new stores since the end of the 2025 firstsecond quarter, twothree of which opened during the 2026 firstsecond quarter. During the 2026 firstsecond quarter, these 21 stores generated $54.5$61.5 million of net sales, including e-commerce. Since re-launching our new store program in 2022, we have opened 6568 new stores, 4447 of which have been open for at least twelve months. Over the last twelve months, those 4447 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 increaseddecreased 2.9%0.4% driven by lower comparable sales in the footwear and apparel merchandise divisions, partially offset by higher comparable sales acrossin allthe sports and recreation and outdoor merchandise divisions, except the footwear merchandise division which remained relatively constant.divisions. The increasedecrease in comparable sales was a result of a 4.5%5.3% decrease in comparable transactions, partially offset by an increase in average ticket, partially offset by a decrease in comparable transactionsticket of 1.5%.4.9%.

E-commerce net sales represented 11.0%12.1% of merchandise sales for the 2026 firstsecond quarter compared to 10.0%10.9% for the prior year firstsecond quarter. E-commerce net sales increased 17.4%14.1% in the 2026 firstsecond quarter over the prior year firstsecond quarter.

Gross Margin. Gross margin increased $20.5$89.2 million, or 4.5%,15.5%, to $479.3$665.9 million in the 2026 firstsecond quarter from $458.9$576.7 million in the 2025 firstsecond quarter. As a percentage of net sales, gross margin decreasedincreased 80440 basis points from 34.0%36.0% in the 2025 firstsecond quarter to 33.2%40.4% in the 2026 firstsecond quarter. The decreaseincrease of 80440 basis points in gross margin was primarily attributable to 110510 basis points of unfavorabilityfavorability asfrom athe resultone-time benefit of tariffs,IEEPA partiallytariff offsetrefunds byand 20 basis points of favorability related to shrinkshrink, andpartially 10offset by 90 basis points of favorabilityunfavorability relatedin tomerchandise freightmargin, andinclusive e-commerceof shipping.70 basis points of reinvestment of tariff refunds into strategic pricing.

Selling, General and Administrative Expenses. SG&A expenses increased $15.1$15.2 million, or 3.9%,3.8%, to $404.7$419.5 million in the 2026 firstsecond quarter as compared to $389.6$404.4 million in the 2025 firstsecond quarter, primarily as a result of our increased strategic investments of $19.0$19.1 millionmillion, inincluding the addition of 21 new stores andsince technology,the end of the 2025 second quarter, partially offset by $7.5$3.9 million due to lapping the Jordan Brand launchimprovement in thebase 2025 first quarter.costs.

OtherInterest Income,Expense. net.Interest Otherexpense income,decreased net,$1.0 increasedmillion, $0.4or million10.8%, in the 2026 firstsecond quarter when compared with the 2025 firstsecond quarter, primarily drivendue byto higherlower moneyinterest marketrates investmentsand debt refinancing activities in the 2026 firstsecond quarter whenwhich comparedresulted within thelower 2025interest firstrates quarter.on our long-term debt (see Note 4).

Income Tax Expense. Income tax expense decreasedincreased $0.8$1.1 million to $16.2$40.5 million for the 2026 firstsecond quarter as compared to $16.9$39.4 million in the 2025 firstsecond quarter, resulting primarily from fluctuationsan increase in share-basedpre-tax compensation deductions.income. ASO, Inc.’s effective tax rate was 23.5%22.7% in the firstsecond quarter of 2026 compared to 26.9%23.9% in the firstsecond quarter of 2025. The decrease in the effective tax rate compared to the prior year quarter is primarily due to fluctuationsthe inpurchase share-basedof compensationtransferable deductions.tax credits and the effect of cross-border tax laws.

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 common stock. We fund these liquidity requirements through cash and cash equivalents, cash generated from operating activities, issuances of debt (such as the Notes) and borrowings under our ABL Facility. On MayAugust 2,1, 2026, our cash and cash equivalents totaled $337.8$298.2 million. We believe our cash and cash equivalents, as well as our availability under the ABL Facility, will be sufficient to fund our cash requirements for the next 12 months and the longer term foreseeable future.

As of MayAugust 2,1, 2026, the Company’s long-term debt and interest rates consist of:

•Notes - 6.00%5.875% fixed rate senior secured notes (the “Notes”) with $400$500 million in principal outstanding and full principal maturing NovemberMay 15, 20272031; and

•ABL Facility - $1.0 billion commitment on a variable rate secured asset-based revolving credit facility with no principal outstanding maturing MarchMay 8,14, 2029.2031.

On May 14, 2026, Academy, Ltd., a wholly-owned subsidiary of the CompanyCompany, entered into an amendment to the ABL Facility which, among other things, extended the maturity of the ABL Facility to May 14, 2031, and Academy, Ltd., as issuer, issued $500 million in aggregate principal amount of senior secured notes, all of which remains outstanding and matures on May 15, 2031. The Company used the net proceeds from the senior secured notesNotes to fully redeem the 2020 Notes, repayprepay the Term Loan in full, pay related fees and expenses, and for general corporate purposes.

See NotesNote 4 and 12 to the accompanying financial statements for further disclosure regarding our debt agreements. The following table summarizes our debt obligations by fiscal year as of MayAugust 2,1, 2026 (amounts in thousands):

We predominantly lease store locations, distribution centers, office space and certain equipment under operating leases expiring between fiscal years 2026 and 2045.2046. Operating lease obligations include future minimum lease payments under all of our non-cancelable operating leases at MayAugust 2,1, 2026. The following table summarizes our remaining operating lease obligations by fiscal year:

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 replaced 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 MayAugust 2,1, 2026, the Company had $338.2$256.1 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 forthrough the 2026 firstsecond quarter (dollar amounts in thousands, except per share amounts):

The following table summarizes our quarterly dividend payments for the 2026 firstsecond quarter (amounts in thousands, except per share amounts):

On JuneSeptember 4,2, 2026, the Company’s Board of Directors declared a quarterly cash dividend with respect to the fiscal quarter ended MayAugust 2,1, 2026, of $0.15 per share of the Company's common stock, payable on JulyOctober 16,14, 2026, to stockholders of record as of the close of business on JuneSeptember 18,16, 2026.

The following table summarizes our capital expenditures for the thirteentwenty-six weeks ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025 (amounts in thousands):

Cash Flows for the ThirteenTwenty-Six Weeks Ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025

Cash provided by operating activities in theyear-to-date 2026 first quarter increased $3.1$113.0 million, compared to 2025year-to-date first quarter.2025. This increase is attributable to:

•$6.6$19.1 million increase in net income; and

•$2.4$68.6 million net increase in cash flows provided by operating assets and liabilities; offset byand

•$46.7$34.3 million decrease in prepaid expenses and other current assets largely driven by litigation settlements received in the prior year period and timing of construction reimbursement payments received;received.