Academy Sports and Outdoors Q1 2026 Earnings Call Transcript

Quartr
Provided by Quartr
June 10, 2025

Key Takeaways

  • Tariff mitigation: Academy pulled forward $85 million in domestic inventory at pre-tariff prices, reduced private-brand sourcing from China to 6% by year-end, and leveraged supplier partnerships and pricing optimization to offset 30% China and 10% reciprocal tariffs.
  • First-quarter net sales were $1.35 billion, down 0.9% year-over-year with a 3.7% comparable-store sales decline, although trends improved sequentially and April finished positive.
  • E-commerce sales grew 10% with penetration rising to over 10%, driven by improved site search, endless-aisle enhancements, and dropship expansion.
  • Store expansion stayed on track with five new openings in Q1 for a total of 303 stores across 21 states, 2022–2023 vintages comping positive, and plans for 20–25 new stores in FY25.
  • Jordan brand launch: Debuting in 145 doors and online, the Jordan assortment exceeded internal targets, attracted higher-income shoppers, and is forecast to be a top-20 brand by year-end.
AI Generated. May Contain Errors.
Earnings Conference Call
Academy Sports and Outdoors Q1 2026
00:00 / 00:00

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Operator

Good morning, and welcome to the Academy Sports and Outdoors First Quarter Fiscal twenty twenty five Results Conference Call. This call is being recorded and all participants are in a listen only mode. Following the prepared remarks, there will be a brief question and answer session. Questions will be limited to analysts and investors. Please limit yourself to one question and one follow-up.

Operator

I'll now turn the call over to Dan Aldridge, Vice President of Investor Relations for Academy Sports and Outdoors. Please go ahead.

Dan Aldridge
VP - Investor Relations at Academy Sports & Outdoors

Good morning, everyone, and thank you for joining the Academy Sports and Outdoors first quarter twenty twenty five financial results call. Participating on today's call are Steve Lawrence, Chief Executive Officer and Carl Ford, Chief Financial Officer. As a reminder, today's earnings release and the comments made by management during this call include forward looking statements. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the earnings release and in our most recent 10 ks and 10 Q filings.

Dan Aldridge
VP - Investor Relations at Academy Sports & Outdoors

The company undertakes no obligation to revise any forward looking statements. Today's remarks also refer to certain non GAAP financial measures. Reconciliations to the most comparable GAAP measures are included in today's earnings release, which is available at investors.academy.com. This morning, we will review our financial results for the first quarter of fiscal twenty twenty five, provide an update on our strategic initiatives and to discuss our outlook for the year and share our updated guidance for the full year fiscal twenty twenty five. After we conclude the prepared remarks, there will be time for questions at the end.

Dan Aldridge
VP - Investor Relations at Academy Sports & Outdoors

With that, I'll turn the call over to our CEO, Steve Lawrence.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Thanks, Dan, and good morning to everyone on the call. I'd like to start by covering the subject that is top of mind for most analysts and investors, and that would be how Academy is navigating through the additional tariffs that have been levied since our last earnings call. We, like most people in our business, have been dealing with a fluid situation that's created a lot of complexity in how we forecast and manage our business on a day to day basis. We're fortunate that we have a strong team that has navigated through other periods of rapid change, such as the pandemic in 2020, the cotton crisis from 2010 and 2011, and the subprime mortgage crisis from 2008 to 02/2009.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

The team has drawn on these past experiences to help strategize how to effectively navigate through the current situation. The step was for the teams to calculate the impact on the business for the 10% reciprocal tariffs on most countries, coupled with the additional tariffs on goods coming out of China, which are currently set at 30%, along with the steel and aluminum tariffs. Once this work was completed, we moved to our step, which was to work with our factories and suppliers to look for tariff offsets by reducing costs on product. Using this approach, we worked with each supplier in a partnership fashion to help share some of the burden of the incremental tariffs. From there, move to step three, which was to work on strategies to help minimize the impact these additional costs will have on our customers and our internal P and L.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Team has taken the following key actions on this front. we paused shipments out of China during the period that the tariff rate was set at 145%. Once the rate was lowered, we selectively resume shipments. we've accelerated our focus on reducing our exposure to products made in China. As we covered in our last earnings call, we've been on a journey over the past couple of years to reduce our direct exposure to China imports.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

And we're pleased that at the start of the year, our exposure of products sourced from our private brands from China accounted for roughly 9% of our business, which was down from pre pandemic levels. We have further accelerated our efforts here and will reduce this number down to roughly 6% by the end of the year versus our original goal of 8%. We've also leveraged our strong balance sheet to pull in domestic inventory on Evergreen product at pre tariff prices. You can see this pull forward of receipts in our inventory at the end of the quarter, which was up 6.5% on a units per store basis. Next, we utilized our pricing optimization engine to look for opportunities to offset cost increases through strategic pricing and promotional adjustments.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

As we worked through these changes, our focus was to ensure that the impact on the customer was minimal while also protecting our position as the value leader in our space. We know that when discretionary spending is under pressure, customers look to maximize their spending power by seeking out value. And we plan to capitalize on this and capture market share by continuing to provide the best value in the sports and outdoor space. Finally, each of our branded partners has a different exposure to tariffs based off their unique supply chains. We continue to work with each of them on a case by case basis to develop offset strategies.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

At this point, we believe we've effectively mitigated cost of tariffs at their current levels while minimizing the impact on our customers. Moving forward, the team will remain nimble and make adjustments if or when the situation changes. Before moving off of the tariff topic, I think it is important to point out that as the situation has evolved, we continue to see an increase in foot traffic from customers to household incomes over $100,000 annually. This is a pattern we've seen emerge over the past couple of quarters, and it is starting to accelerate. We would expect this trend to continue as customers look to stretch their discretionary spending power by seeking out value.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Carl will provide more details on tariff impacts and how we think it could influence our customer spending patterns, along with our updated guidance for the remainder of the year later in the call. Shifting to the first quarter fiscal twenty twenty five results. As you saw from our earnings release earlier this morning, sales came in at $1,350,000,000 which was down 0.9% to last year and translated into a negative 3.7% comp. As we shared on our last call, February sales were soft, primarily driven by cold temperatures and winter storms across our footprint. We saw the business sequentially improve in March, and we exited the quarter with momentum, with April finishing with a positive comp.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Footwear and apparel were the two strongest businesses for the quarter, running roughly flat to last year, with sports and recreation closely following. All three of these businesses start to accelerate once we got past the cold weather in February with warmer temperatures in March and April. NIKE was a key sales driver across all three areas, and as you'd expect, was one of our best performing brands in the quarter. Outdoor was down low single digits, primarily driven by softer sales in ammo. Fishing, firearms and coolers and drink were all posted solid increases for the quarter.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

We would attribute the momentum we're starting to build in the business to the solid progress we've been making against our long term objectives and goals. I'd now like to highlight some of the progress we've made on our strategic initiatives during the first quarter. New store expansion remains our largest long term growth engine. We're pleased to see the 2022 and 2023 vintages, which are both now fully in the comp base, but positive low single digit comp growth in Q1. As we discussed on our last call, we're applying the learnings from each vintage to subsequent openings to continually improve our site selection process.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

You can see the impact of this in our 2024 vintage, which while not currently in the comp base is off to a great start, and we expect them to be strong contributors moving forward. We remain on track to open up 20 to 25 new stores this year and open five locations in Q1, including our locations in Pennsylvania and Maryland. Our store count at the end of the first quarter was three zero three, and we now include 21 states in our footprint. We're not ready to give guidance on our targets for 2026. We've thoughtfully slowed the pace of signing deals for the twenty twenty six new stores.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

This will allow us to get a better handle on how the current tariff situation will impact construction costs moving forward. At this point, we don't expect it to change the overall number of new stores, but it will shift the timing of openings that were originally targeted for Q1 into Q2 or Q3. Our goal is to maintain maximum flexibility as we navigate a rapidly changing landscape. Our growth pillar is to drive accelerated growth in our e commerce business. We also made progress here during the quarter with academy.com posting a 10% sales increase and growing in penetration by roughly 100 basis points to over 10%.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Our focus remains on delivering a streamlined experience on our site that is intuitive and inspiring. A lot of the work completed in Q1 was around streamlining and improving the internal search functionality of our site. At the same time, we've also been pushing hard to grow our endless aisle offering with an expanded assortment online supported through dropship. The team has been making solid headway on both fronts, and you can see it reflected improvements in both conversion rate and average order value during the quarter. Our growth pillar is to improve the productivity and drive the business within our existing stores.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

As we discussed during our last call, we have multiple initiatives targeted to achieving this goal. A major tentpole to this strategy is delivering new brands and products that inspire customers to shop more frequently at Academy. To this end, on April 23, we launched the Jordan brand in 145 doors and online. This was the time that we cross merchandised apparel, footwear, and accessories together by gender into a branded shop concept. Our Jordan brand offering is focused on sports products at accessible price points.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

For example, a key shoe for us is a Luka 77, which is a game shoe that someone would actually play basketball in. It can also work as a casual shoe, and it retails for $99.99 My son is a sneakerhead, and I can assure you that I've paid over $100 for his pair of Jordans. While it's still early days, the initial reaction with the customers was strong, and the brand is tracking ahead of initial sales plans. Our goal is to expand key items such as cleats for football season into all doors later this summer, and we anticipate the Jordan brand will be a top 20 brand for us by the end of the year. Our tactic under this pillar is to better leverage technology to improve our customer shopping experience.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Our focus this spring has been on rolling out RFID scanners to all stores, coupled with new handheld devices for our team members, and we just completed the full chain rollout at the May. Simplistically, we're leveraging RFID chips already embedded in products from key brands such as Nike, Jordan, and Adidas to update store inventories on a weekly basis. When we piloted this technology in 70 stores last year, it led to a 20% improvement in store level inventory accuracy. Rolling this technology to all stores will help improve our in stocks, which ultimately will lead to increases in conversion. As we move through 2025, we expect to add more brands for regular RFID counts, such as Levi's, Under Armour, Columbia, Brooks, and Puma.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Looking into next year, our goal is to embed RFID tags in most of our private label products, along with working with other national brand suppliers to follow suit where it makes sense. The other new piece of new technologies are handheld devices, which have POS functionality integrated into them. With this new capability, if a customer cannot find something in a store and we own it somewhere in the chain, we can save the sale and get the customer what they need, then by shipping it to their home or to their closest store for a BOPIS pickup, whichever is most convenient for them. As stores have started to use this new technology, we're seeing their save the sale revenue increase 900% on average per store. The last thing I'll cover on our long range plan is the work we've done to improve our marketing reach and effectiveness.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

In late April, we launched a new campaign, which was created by our new agency of record, Garrett Jesse, and features our new tagline Fun Can't Lose. We believe that this new campaign is authentically Academy and is resonating well with our customers. It serves a dual purpose in both driving top of mind brand awareness, while also reinforcing our strong value messaging. In addition, we're increasing our advertising spend by 10 basis points this year to 2.7% of sales to support this campaign while also spotlighting our Jordan brand introduction and our new store rollouts. Another key focus on the front is to leverage our new loyalty program to drive value for the consumer.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

We're planning to add an additional 2,000,000 customers to My Academy Awards in 2025, which should take us to over 13,000,000 members by year end. Growing our loyalty program membership will drive growth for us both now and in the long term. Loyal, more engaged customers tend to shop Academy two to three times more in a year than an average customer and spend four to five times more on an annual basis. While we're excited about the progress we're making against our long term initiatives and the momentum we're starting to see in the business, we're also sober about the fragile state of The U. S.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Consumer and the inflationary pressures we could face as the year progresses. As noted in our Q1 fiscal twenty twenty five earnings release, we're widening our comp sales guidance to account for an expanded range of outcomes. Our balance sheet is strong, and we're confident that we have the right team and strategy in place to effectively navigate through the short term disruptions for the consumer. On a longer term basis, we believe our long range planning strategies and investments are just starting to bear fruit and have a long runway ahead of them, and that the future is bright for Academy. I'll now turn the call over to Carl to review the financials in more detail and provide an update on our guidance. Carl?

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Thanks, Steve. Net sales for the first quarter were $1,350,000,000 with a comp decline of 3.7. As Steve mentioned, we saw sequential comp improvement throughout the quarter, culminating in a positive comp in April, and our e commerce channel posted a positive 10% comp for the quarter. Breaking down the comp, transactions were down 5.2% and ticket was up 1.5. Looking at performance by category, footwear and apparel continued to perform well, and we saw strength in kids apparel, women's athletic apparel, and men's athletic footwear.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Athletic footwear posted a positive 4.5% comp led by brands like Nike and Brooks. To be clear, Jordan brand products were only in stores for the last two weeks of the quarter, but it beat our internal plan in April and in May. Additionally, over 25% of Jordan brand sales have come from our e commerce channel, which you will recall only has a 10% penetration for the total business. Within our sports and recreation category, outdoor cooking and baseball posted positive comps as spring started to materialize across especially in our footprint. While we saw encouraging results in baseball, total team sports underperformed primarily coming from softness in basketball and a slower start to the quarter in golf.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

In outdoors, fishing and firearms performed well, while ammunition, paddle and power marine remained challenged. We continue to deemphasize the marine categories in lieu of more productive additions like Jordan brand. In ammunition, we continue to see industry pressure on AUR, so we're implementing some new tactics like bulk promos to try and offset this impact. Absent these three categories, outdoor is performing very well and in fact would have posted positive comp. Gross margin came in at 34%, 60 basis points higher than last year, driven by 40 basis points of merch margin expansion and 10 basis points of favorable shrink.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

The Merge margin was impacted by a greater mix of soft goods and the improvement in shrink is a testament to the work our store and supply chain teams have done to improve inventory accuracy, including the rollout of RFID. SG and A came in at 28.8% of sales for the first quarter, an increase of $36,000,000 or two ninety basis points. The increase was primarily driven by growth initiatives for new store support, higher labor and key markets to support the Jordan brand launch and Nike assortment expansion and investments in digital and supply chain technologies. 150 basis points were attributable to new store growth and 60 basis points went to support Jordan Brand's launch and the Nike expansion. To put that into perspective, we invested over $7,000,000 into the launch and expansion that included resetting half of the stores in our fleet.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

20 basis points was related to technology investments in digital and supply chain. As mentioned on the last call, these strategic growth investments would most heavily impact the first quarter and the associated revenue would not be realized until the following quarters. We expect SG and A to normalize as we head through the year and the investments are completed. Operating income was $69,300,000 and diluted EPS was $0.68 Adjusted EPS was $0.76 Our inventory per store is elevated with units per store up 6.5% and dollars per store up 7.8%. This is an example of using the strength of our balance sheet to invest in the business.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

We have purposefully made decisions to manage inventory as tightly as possible and have taken the following strategic actions to mitigate tariff impacts and ensure we have value priced products for our customers. One, we pulled forward $85,000,000 in domestic inventory receipts in the first quarter at pre tariff prices. The majority of this is evergreen products such as bicycles or free weights, which have no seasonal or obsolescence risk. Two, partnered with factories and overseas suppliers to reduce cost. Three, reduced over $120,000,000 in inventory receipts to maintain maximum flexibility to respond to evolving landscapes.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Four, shifted product out of China to alternative countries of origin like Cambodia and Bangladesh. And finally, reduced fiscal year twenty twenty five capital expenditures and expenses. These actions have positioned us well to support the spring selling season and we will continue to evaluate the environment and take further actions as deemed necessary. We anticipate our inventory levels will normalize as we move through the year. We ended the quarter with $285,000,000 in cash and maintained strong liquidity with an untapped $1,000,000,000 revolver.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Despite the challenged sales environment, we have been able to deliver approximately 8% in free cash flow as a rate of sales, which allows us to make continued investments and return capital to shareholders. In fact, we returned over $100,000,000 of our free cash flow to investors in the first quarter. Turning to capital allocation, we remain committed to balanced and disciplined deployment. During the quarter, we repurchased approximately $99,000,000 in our shares under our current repurchase program, paid approximately $8,700,000 in dividends and invested over $50,000,000 in strategic initiatives, including store openings, RFID rollouts, and omni channel infrastructure. We have the flexibility to adjust our capital allocation priorities during periods of disruption and uncertainty, allowing us to either redirect cash to other strategic initiatives or retain it for financial stability.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

The cost of materials construction in our 2025 new store plan are already accounted for. And as Steve mentioned, we have slowed the pace of signing new store leases for 2026. This allows us to better assess the environment and any impacts on construction costs. Moving to guidance, we are updating our guidance range to account for multiple tariff scenarios as we move forward in this uncertain demand environment. Our base case, which is reflected by the midpoint of the range, is that tariffs remain at current levels for the remainder of the year.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

The high end of the range assumes reciprocal tariffs at 10% for all other countries, including China. The low end of the range assumes China reverts to 145% and the original reciprocal tariffs announced on April 2 remain. We now expect sales in the range of $5,970,000,000 to $6,260,000,000 and comp sales of negative 4% to positive one percent. We expect gross margin to be unchanged and earnings per share of $5.1 to $5.9 We expect adjusted earnings per share to be in the range of $5.45 to $6.25 We are also partnering with our national branded vendors to help mitigate costs for the consumer. In the case of price increases from these vendors, we will remain a steward of value for our customers and look to maintain our best in market pricing on key items while using our price optimization tool to offset these initiatives.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

To close, I also wanted to touch on the customer shift opportunity Steve mentioned. We continue to see an acceleration in trade down from the upper income customer tiers as they discover the value offered by Academy. During the first quarter, we saw growth in store traffic by customers earning over 100,000 increase by double digits. We believe these trends will continue to grow as new customers discover the value offered by Academy.

Operator

Thank you. With that, the company will now open the call up for your questions. Please proceed with your question.

Jonathan Matuszewski
Jonathan Matuszewski
Senior Vice President at Jefferies

Great. Good morning and thanks for taking my questions. The one was on the higher income consumer. Nice to hear about the ongoing traffic flows from that cohort. I think you started to observe that dynamic maybe two quarters ago.

Jonathan Matuszewski
Jonathan Matuszewski
Senior Vice President at Jefferies

So curious if you could comment on the retention of those higher income consumers that you initially maybe welcomed six plus months ago and anything you're seeing from a repeat shopping behavior perspective with that cohort? That's my question. Thanks.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Yeah, Jonathan, thanks for the question. It's Carl. Yeah, we started to see customer demographic shift beginning in the third quarter of twenty twenty four, and we were really focused on quintiles four and five. So customers above 100,000, It accelerated into Q4 and it accelerated even more into Q1. From a retention, it's a mix of new customers, as well as customers that just make more money that are shopping more frequently with us.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

And from a retention standpoint, they're sticking with us. They're shopping across the store. They're not just there for national brands. They're experiencing our private brand value as well.

Jonathan Matuszewski
Jonathan Matuszewski
Senior Vice President at Jefferies

That's helpful. Thanks for the color there. And then nice to hear about the positive comp in April. I think you mentioned the Jordan outperformance versus internal expectations continued into May. Curious if that implies the couple of weeks of 2Q is also showing that positive comp. Thanks for any color.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Yes. So Jordan continues to perform very well relative to our expectations. We're very excited about it. In terms of May, I would tell you we've seen a pretty choppy shopping environment during the of this year. We talked a lot about that in our Q1 results.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

May right now ran down low single digits. It's trending better than first quarter did, but it is down slightly. That being said, we're still very optimistic about Q1 or I'm sorry, Q2 being a very strong quarter for us. Customers are showing a predilection to come out and shop during the big moments on the calendar. We've got some of those big moments still ahead of us.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

This week is Father's Day week. It's the biggest week of the year for us prior to Black Friday. So a lot riding on this weekend. Then obviously, we've got back to school kicking off at the July. So still very optimistic about the quarter, although the customer is being very choppy in terms of their shopping patterns right now.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Thanks and best of luck. Thank you.

Operator

Thank you. Our next question comes from the line of Simeon Gutman with Morgan Stanley. Please proceed with your question.

Pedro Gil
Pedro Gil
Equity Research at Morgan Stanley

Hi, good morning. Thank you for having me. This is Pedro Gill on for Simeon. Maybe just to follow-up on that last question. That's my question.

Pedro Gil
Pedro Gil
Equity Research at Morgan Stanley

If you could double click on May and maybe talk a little bit about the health of the consumer. If you could sort of parse out the cadence for the quarter, the impact of weather, the Easter shift, and then what the development is in May as far as the category mix and launch of Yes.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

So in terms of the quarter, I'll talk about first quarter, I think we covered this in prepared remarks. The early part of the quarter was down in February. We think that was a lot of storm impact, cold weather moving across the geography. March improved, was still negative, but April inflected a positive, as we said on the call.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

I think the things that drove April to positive were the Jordan launch, the Nike expansion, and somewhat the Easter shift out of March into April. I think as we got into the early part of Q2 with the month of May, you have Mother's Day. We're not a big Mother's Day store. Business started off a little soft. I think there were still some cooler temperatures we're dealing with in there, although I wouldn't describe too much weather.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

I think it's just choppiness from a consumer perspective. I think the consumer is under pressure right now. I think that they are being very careful when and how they shop and spend their money. I think they're waiting to see kind of how this whole tariff situation, trade war situation plays out. And I think they're gravitating towards value, which is why we're excited to start seeing some trade down in those higher income consumers.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

That's something we've been waiting to see for a long time and we really started seeing happen last year and saw it accelerate into this quarter, Q1 and into Q2. And our expectation is that that will continue as we move forward. As we go throughout the remainder of Q2, we've got obviously, this is the first quarter we're going to be fully leveraging the benefit of Jordan and the Nike expansion. The rollout that we had on the new technology we talked about, whether it's the handheld devices for our store associates or RFID, those were not really fully rolled out until, honestly, last week. So they're now in all stores, and we really should start seeing some benefit from that in all stores.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Moving forward. We're excited about the momentum we have in our .com business. We're excited about the momentum we're seeing in our new stores. So there's a lot of positive green shoots beneath the surface. That's being counteracted a little bit by choppy shopping patterns, but we believe we've got a lot of opportunities still ahead of us in the quarter.

Pedro Gil
Pedro Gil
Equity Research at Morgan Stanley

Got it. That's helpful. And my follow-up is on your gross margin guidance, which you kept gross margin rate guidance kept unchanged. I'm a little surprised in the low end scenario for guidance where you're factoring in the full 145% tariff on China and the full reciprocal tariff as was initially announced on April 2 on all the other countries, yet you're keeping the gross margin rate assumption unchanged at 34% relative to what you gave on March 20. Could you elaborate a little bit your thinking there and what are the puts and takes?

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Absolutely. Yeah. So last year we were at a 33.9% gross margin rate guidance for this year is 34 and below 34.5. Q1 was up 60 basis points. The bulk of it was merch margin.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

We did quote shrink, but there were some other things around the edges. I think the risk for tariffs, I'm going start really broadly, is on how much money consumers have to spend. So there's been so much pressure. There's so much discussion about the pressure being put on gross margin rates. Pressure is that the American consumer is going to feel is on how much money they have to spend on things.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

So we've pulled forward inventory. I feel really proud of the work that the teams did in the thinking that in July and August, we don't know what these expirations are going to do, what happens on the back of those expirations. We've shifted out of China. We talked a little bit about our path that we started many years ago on that. It's obviously accelerating with what's going on this year.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

And we feel confident in our gross margin guidance given the tactics that the merchants are really employing primarily related to inventory positioning.

Pedro Gil
Pedro Gil
Equity Research at Morgan Stanley

Okay, got it. Wouldn't we be seeing a perhaps a lower gross margin rate if we went to China at 01/1945 and all the other countries have higher tariff Yes.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Yeah. I mean, if China goes back to 145%, a lot of things in America are going to change. And so we pulled forward inventory and we've shifted out of it. And that's our focus area. We're pulling inventory out of of China and we feel good about the inventory that we're carrying at those pre tariff pricing.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

But to be clear, the gross margin guidance that we gave anticipates we gave you more of a sales based scenario based off the different tariff exposure. So at the high end, it assumes world goes to 10%. Base case that we're operating the business off of assumes kind of steady state from where we're at today. The low end of the guidance scenario anticipates the pauses that were put on reciprocal tariffs and things go back to kind of what they originally planned at for both China and the rest of the world. That being said, in all those scenarios, we've built in different offsets in terms of pricing and inventory management to a deal with the gross margin impact.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

But I think what Karl is trying to highlight is that we see the impact probably more on the sales side and how the customer would react to more of an inflationary environment if those tariffs go back into place. Because I have to believe candidly that if those reciprocal tariffs go back into place at 145%, prices are going up virtually on everything. And our goal would be to maintain our value positioning in the space and make sure we've got the best value on products. But we would expect that there would be some price increases there that would offset margin erosion.

Operator

Thank you. Our next question comes from the line of Christopher Horvers with JPMorgan. Please proceed with your question.

Jolie Wasserman
Equity Research Analyst at JP Morgan Chase & Co

Hi, this is Julie Wasserman on for Chris. Our question is about the April benefit from Easter when you're looking at March and April together. And just how are you looking at the business given the March to May with the Easter trend combined with your weather commentary? And on top of that, was there any lift from Nike built into that in terms of how you're thinking about it?

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Yeah. So if you look at Marpril combined, I think it was down low single digits. But in aggregate, we think that what we really saw benefit April was a combination of the Easter shift. But I would also lean more into the Nike Jordan launch. That was a big boost for us.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Traditionally, after we get out of the holiday, we kind of hit a lull. And we really didn't hit that lull this year because we had the Nike expansion in Jordan was positioned right after Easter. And I think that kind of helped us avoid that low. So we would attribute a lot of the comp positive in April to that launch. As we move in, I kind of highlighted this earlier, we only really got the benefit of that for about two weeks in April.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

And if you go back to March, one of the things that also probably impacted us a little bit in March was our floors were pretty disrupted. We were resetting the Nike shops, clearing out room for Jordan. We did this on a rolling basis across almost 150 stores on a week by week basis, but the stores were pretty kind of disrupted during this time period. And so I think that probably had a little bit more impact on March than we initially anticipated. But we're pleased with the rebound that we saw coming out that in April.

Jolie Wasserman
Equity Research Analyst at JP Morgan Chase & Co

Got it. That makes sense. And just moving to the promotion side, I think you touched on it a little bit earlier. We noticed that Q to date promotions did take up a bit year over We saw an additional $20 off 100 coupons that also got extended, some additional e gift card promotions, etcetera. Also, we saw several promotions like a 25% off Under Armour.

Jolie Wasserman
Equity Research Analyst at JP Morgan Chase & Co

So is it fair to say, like, net net that quarter to date promotions are higher year over year? And how much of that is for clearing out for the newness with Nike in Jordan? And how much of that is just related to an overall weaker Academy consumer since a lot of these incremental promotions are entire basket? And just a quick aside on promotions, we also saw the infamous Stanley water bottle was about 40% off. So when exactly did that begin?

Jolie Wasserman
Equity Research Analyst at JP Morgan Chase & Co

And speaking to the broader impact of hydration promotions would be great.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Yes, sure. There's a lot wrapped up in that question. I'll do my best to answer I would characterize promotions candidly quarter to date as fairly consistent with last year. I mean, we're an everyday value based retailer, and we've cited multiple times that means about 75% of what we sell is at our everyday price. We do have promotions.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Those promotions generally happen around the big holiday events So that for us is Memorial Day, that for us is Father's Day, fourth of July, and back to school. So you will see promotional activity during those time periods. And when we looked at it, I would tell you it's fairly consistent with last year. In regards to some of the global offers I think you're citing, those may be more driven either through our app or through our site.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

We're certainly focused very hard on getting people to join our loyalty program. The reason we're focused on that is because we know that we can get somebody into our ecosystem, and we can start target marketing to them and getting them to shop with us more frequently. A more loyal customer shops with us two to three times more a year. They shop and buy a bigger basket. They tend to be more profitable customers for us and spend almost four to 5x what a normal customer does.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

So one of the things you're seeing us test into a little bit is trying to offer some good promotions to get people to kind of embed themselves into our ecosystem. And that, when you look at it, we're looking at the price of that one time discount relative to the lifetime value of the customer more than pays for itself. I wouldn't read too much into that. In regards to Stanley, STANLEY's been on a run for, obviously, a couple of years now. And I think they have been in a very rarified place where they haven't had to take any markdowns on discontinued colors.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

I think they're starting to have to deal with some colors that are moving out of the assortment moving forward. And so they had a map break on some discontinued colors that we, along with, I think, everybody who carried those colors participated in. That's been going on for about a week now. And I think this is just part of a normal course of evolution of the business, that as the business gets bigger and matures, they have to deal with the obsolete colors. And I think that's what you're seeing there.

Operator

Great. Thank you. Thank you. Our next question comes from the line of Paul Lejuez with Citigroup. Please proceed with your question.

Kelly Crago
Kelly Crago
Analyst at Citigroup

Hey, guys. This is Kelly on for Paul. Thanks for taking our question. Just want to follow-up on the tariff commentary. So it sounds like the pull forward of tariffs is accounted for quite a bit of the mitigation this year.

Kelly Crago
Kelly Crago
Analyst at Citigroup

So how do we think about the impact of tariffs as we look to F '26? And then I have a follow-up. Thanks.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

I'd love to answer that question. I mean, this thing changes so rapidly. Feel like we've done a really good job of getting this year mitigated and having a good handle on it. What's going to happen between now and the end of the year, I think, is anybody's guess. We're not going to speculate on that.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

I think the strategies that we're focused on in terms of diversifying our sourcing base, reducing our exposure to China, and candidly making sure that we don't have too much in any one basket, I think, in any one country's basket, I think, is going to be important moving forward. Because you never know what the next country that's going to be kind of focused on. So I think gone are the days where you can just say, hey, we're going get out of China and not worry about it. Vietnam had a pretty high reciprocal tariff put on them, as well as other countries. And so I think having a diversified sourcing base is what our focus is there.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

As we move forward, though, into next year, we really believe that leaning into who we are, our value proposition in this space, making sure the value leader, leaning into our growth initiatives in terms of new store growth, leaning into our .com opportunities we have, I think all those things make us optimistic about the back half of this year and into next year. But I can't tell you what the tariff situation is going to be next year at this time.

Kelly Crago
Kelly Crago
Analyst at Citigroup

Okay, got it. And then just want to follow-up on the gross margin guide. So is the current guidance, I guess, that assuming all merchandise margin improvement driven? And then, I guess, within that pricing assumptions, what sort of ticket increases are you embedding in that guide? Thank you.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

I think we'll probably tag team this one. I'll take the part of that. So our guidance on top line as well as all the way down the P and L kind of models in three different scenarios. The midpoint you can think of as tariffs that are in place right now on the high end, it's basically every country at 10%. And then on the low end, it's everything that was paused, reversed back in July and August upon those expiration dates.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

And so we pulled forward inventory. We feel good about carrying that inventory at pre tariff pricing. We have no regrets associated with that inventory position. It's gonna serve us well throughout.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Yeah, I'd say so embedded in this, I I don't think it's all gonna translate into price increases. So we talked about partnering with our factories, so they're bearing some of the brunt of this. And where we have a national brand partner, in a lot of cases, they're bearing some of the brunt of this. We're looking at how we're pricing and approaching this from a pricing offset perspective. We've got a pretty sophisticated pricing optimization engine called Revionics.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

And there's multiple ways to get at AUR increases to offset this. through promotional optimization. We're looking at how long we ran promotions last year versus this year, maybe looking at shorter windows. We're looking at the depth of promotions during those windows. Another way to get at it is through markdown optimization.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

We take goods and mark them down at the end of their life cycle, leveraging that as a way to maybe gain some AURs. And really so overall pricing increases, ticket increases, is kind of the last resort. And if and when we have to do that, our goal is a couple of things. we know that there are some key price points on our private brand, national brands that really drive traffic, protect those, and make sure that the customer isn't seeing price increases there. So if we have to take price increases, it would be on ancillary categories that are less obvious to the consumer.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

I think one of the examples we used in the last call was if a bike is kind of the razor, the razor blade might be the bike seat, the bike pump, or the bike lock. And can we take some pricing up on some of the ancillary categories around it so it's less obvious for the customer, and they still can find a great price on that key item they're coming in for. And you can take that same example and spread that across grills and fitness equipment and all those other big ticket things as well. So I think it's a combination of ways that we're getting at mitigating this and how we're getting at price increases with kind of the last resort being physically raising prices.

Kelly Crago
Kelly Crago
Analyst at Citigroup

Got it. And if I could just squeeze in one more. Could you just tell us what the April comp was at the Easter shift?

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

We don't have that broken out. I can tell you it was mid to low single digits in total.

Kelly Crago
Kelly Crago
Analyst at Citigroup

Mid to low single digits in total.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Total comp.

Kelly Crago
Kelly Crago
Analyst at Citigroup

For April including the Easter shift?

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Yes. I mean, was in the month of April this year. Correct.

Kelly Crago
Kelly Crago
Analyst at Citigroup

Okay. I'll follow-up later. Thanks.

Operator

Thank you. Our next question comes from the line of Robbie Ohmes with Bank of America. Please proceed with your question.

Robert Ohmes
Robert Ohmes
Analyst at Bank of America

Hey, good morning, guys. Thanks for taking my question. Really just two one quick one and maybe the other one might be quick as well. Just the softness in basketball and golf that you call that, was that all weather? Or was there anything else there?

Robert Ohmes
Robert Ohmes
Analyst at Bank of America

And then my other question is, I know it's early days, but we'll love to get initial thoughts on the Dick's Foot Locker merger and if that might create some opportunities for you or how you guys are thinking about that competitively, but would love to get your thoughts on that.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Yeah, the question, I would say you're right. It was probably more weather related than anything. In terms of the DICK'S Foot Locker merger, listen, DICK'S is a great company. They're great competitors of ours. We're not going to comment rationale for their strategy or what they're doing.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

We're more focused on what we think our opportunities are. And as we look at this year, we're excited about the trade down we're seeing in higher end traffic. We're excited about the performance of the new stores. We're excited about the growth we're seeing in our .com business. And we really see an opportunity the remainder of this year in executing our strategy.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

We're a full line sports and outdoor retailer and are pretty different than a lot of our competition. We focus on not only sporting goods as well as shoes and apparel. We have a big outdoor business that really resonates with our consumer. We also, I think, attract a slightly different customer, a younger family that's really kind of starting out their journey through sport. And so we're going to focus on serving our customer and executing our strategy.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

And I'm sure they're going to focus on theirs and be very successful at executing what they're doing.

Robert Ohmes
Robert Ohmes
Analyst at Bank of America

Sounds great. Thank you.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Thanks.

Operator

Thank you. Our next question comes from the line of Kate McShane with Goldman Sachs. Please proceed with your question.

Emily Ghosh
Emily Ghosh
Equity Research Associate at Goldman Sachs

Hi, this is Emily Ghosh on for Kate. We were wondering, is your tariff outlook incorporating any elasticity impact from you raising prices? And then how does your outlook take into account the overall health of the consumer in a higher priced environment? Thank you.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Yes, I'm sure Carl and I will tag team this. I would say that if in a world where prices are going up, we use our pricing tool to measure elasticity. So certainly, I think there's some assumption that if AURs go up, there is some erosion in unit demand. And so one of the things Karl talked about in his prepared remarks was getting out in front of and canceling some receipts. Some of that's to cover the inventory pull forward that we did, but some of it's to give us some dry powder so that we can react to what's happening in the marketplace and maybe take advantage of off price opportunities.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

I would say though, in terms of how does this impact the consumer and what is the health of the consumer. And I think the consumer is a little skittish right now, and I think we've seen that in choppy traffic. But as we think about the remainder of this year and you think about a world where inflation is probably realistic to think about, you break it down between discretionary and nondiscretionary spend. From a nondiscretionary spend perspective, you've got food. About 85% of what Americans eat is produced here.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

And so we think that that part of nondiscretionary is going to be somewhat insulated from tariffs. I mean, obviously, saw some articles yesterday about price of steel impacting canned food. But we think that food prices should not feel as big a brunt as the rest of general merchandise in America feels. On gas front, you've got the administration very focused on holding down pricing there. So I think on the nondiscretionary spend, I think the customer is going to be okay.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

So what that puts you in a place of is on the discretionary side, the customer is going to really hopefully have the same amount of money, but want to maximize their spending power. And we think when they do that, they're going to trade into value. And we think that by remaining true to who we are, being the value provider in our space, we think we're going to benefit from that and have more people trade into Academy. And so that's really how we're thinking about the health of the customer and how this all plays out for the remainder of the year.

Emily Ghosh
Emily Ghosh
Equity Research Associate at Goldman Sachs

Thank you.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Thank you.

Operator

Thank you. Our next question comes from the line of Greg Melich with Evercore ISI. Please proceed with your question.

Greg Melich
Senior Managing Director at Evercore ISI

Hi. I had a question really on margins and sort of two parts. on the gross margin, just want to make sure I get the cadence right here. With the up 60 in the first quarter and I think the midpoint of your guide being up 25 bps or something, with that inventory that you bought, does that give you one, two or three quarters before we'd start to see some of the you basically get through that inventory and then we could see some pressure in gross margin offsetting the benefits from mix?

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Yeah, I think the $85,000,000 that we pulled forward was in very strategic categories. I think we think that that's going to get us to the other side of July and August expirations. I think at that point, look, we're gonna have to see what the administration does associated with it, but we feel good about holding on to the value proposition through all of this. I really want to underscore that is what's driving these upper quintile customers to us.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

But just to be clear, the character of this merchandise that we pulled in, that we described it as evergreen, it is things that by definition don't have a markdown liability generally associated with them. Bikes don't go obsolete. Free weights don't go obsolete. Fitness equipment generally doesn't go obsolete. So it's a pull forward of goods that we would have receded in the back half of this year.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

It is on product that is not seasonal in nature, And it's at prices that are pre tariff. So it should allow us to maintain and hold our value proposition as we go into the third and even fourth quarter in some cases for some of these categories. So I don't think you have to worry about this inventory having some sort of a markdown or margin impact down the road. It will not and should not.

Greg Melich
Senior Managing Director at Evercore ISI

Got it. That's very helpful. And then on SG and A, I just want to make sure I got it right. The 7,000,000 on the Jordan launch, is that the portion of the pressure in 1Q that we can just assume that goes away going forward? That but the other things, the new stores and the other investments sort of stick around?

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Yeah, absolutely. It $7,500,000 the precise amount that hit Q1. You should not think about that as impacting Q2 and later. If you look at the composition of the $36,000,000 in gross, about $20,000,000 of it was new stores. We've got 19 new stores, Q1 compared to Q1.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

We talked about the 7 and a half million, which was really just centric to Q1 and launching something that we're very proud of associated with the Jordan and Nike expansion. And then there was a little bit of technology costs. You know, we quoted supply chain. We quoted Omni. But it's also some, like, customer, you know, some of the some of the solutions that we're using to help us, identify that customer and target them better.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

I think the and the ones of those, you should expect to continue. The guidance that we put out there still contemplates 100 basis points of deleverage for the year. And I think what you guys have seen from us over the last couple of years is we manage inventory well, and we manage costs pretty well, but we're proud of the fact that we're investing in these initiatives, these things that we've told you that we're going to stand for. So where you can look for us to continue to invest and where all of that deleverage will come from is the strategies that are embedded within our long range plan.

Greg Melich
Senior Managing Director at Evercore ISI

That's great. Thanks and good luck, guys.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Thanks. Appreciate it.

Operator

Thank you. Our next question comes from the line of John Heinbockel with Guggenheim Partners. Please proceed with your question.

John Heinbockel
Senior MD & Equity Research Analyst at Guggenheim Securities

Hey, Steve. I wanted to start with I think, you've got right now, I think 80 or 90, Jordan item SKUs, something like that. Where do you think that ultimately shakes out, you had cleats and maybe some other categories? Is it 2x that and that's where it stays and then you freshen it up? And then the other part of that was, when you think about the comp lift, do you think having Jordan drives traffic that benefits other categories or that's hard to tell?

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

So I'll start with the part. So we expect the assortment to continue to grow as we grow through this year and into next year. I don't have off the top of my head a number that it's going be 2x or whatever the current size is. You're going to see I think we said on the prepared remarks, as we get into new categories like football cleats, backpacks, things like that for back to school, you're going to see those expand beyond the 145 doors that the core assortment's in. But obviously, we will continue to grow.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

I think the footwear assortment's already more than doubled since we launched. You'll see that continue to grow. You'll see apparel continue to grow. And I think you'll see it extend into new categories. And we think this is not just a once and done.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

We expect that to continue into next year. I think the Jordan brand is going to offer us a growth platform for several years to come, candidly, as we expand in more categories and into more stores in the next year. I do believe it helps bring in a different customer for us. We certainly picked it up because it was the number one most requested brand on our site that we didn't have access to. So there were some internal searches for it, and that was probably customers who were shopping with us regularly who had to go other places to find it.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

But from looking at the traffic data that we're getting through Placer, we believe it's bringing in an incremental new customer. And we think that's evidenced by that acceleration in trade across that we're seeing at the higher end consumers. We're seeing more new consumers who didn't shop this before making north of $100,000 a year, finding us and bringing their dollars to spend with us. And we think a chunk of that is because of Jordan.

John Heinbockel
Senior MD & Equity Research Analyst at Guggenheim Securities

And just secondly, how do you think about, I know seasonal, you want to be careful, with receipts. How do you think about chasing in the back half of the year and the ability to do that or you just the prudent thing is to leave some sales on the table if you have to?

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

I think we have done a good job. The merchants have done a really good job of keeping our powder dry and maintaining liquidity. So if we see a trend happen and there's inventory available and we think it's at the right price, we will definitely chase it if we think it's going to convert into sales. I think one of the things that Carl said earlier that I would agree with is I think inventory management is probably one of the strong suits of Academy over the past five or six years. And so we're going to be good stewards of the inventory, but we're not going to be so focused on that that we ignore opportunities.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

I mean, I think a great example of that is what we did in Q1. Normally, would not have inventory up almost 15% in dollars, 6.5 percent units per store. But we saw an opportunity to leverage our balance sheet to grab some good inventory that didn't have a markdown liability attached to it at pre tariff prices, and we took it. And I think you're going to see us continue that kind of mindset as we progress throughout the remainder of the year.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

Yeah, I haven't gotten any overt questions on the inventory, so I kind of want to double click on that just a little bit. Inventory up 15% on the face of the balance sheet, that's $200,000,000 If you look at it on per store standpoint, plus 7.8% that $85,000,000 pull forward, which I'm proud of. Like, think the merchants did a great job of identifying domestic product and not paying 10% to 30% more for this in the back half of the year. If you back that out, cost per store is up like 2%. And then I do want to highlight tariffs went in an effect on February 4, I think was when the announcement was.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

We've got about $30,000,000 embedded within that inventory on the balance sheet. That's a year over year growth over last year. If you adjust for those two things, I think our inventory track is tracking down, half negative half a percent, which is pretty in line per store with where we are from an overall sales perspective at down 0.9%. So I'm proud of the team for inventory management. And I think it's going to be an asset, a strength for ours during the balance of this year.

Operator

Thank you. Our next question comes from the line of Michael Lasser with UBS. Please proceed with your question.

Michael Lasser
Michael Lasser
Equity Research Analyst - Hardlines, Broadlines & Food Retail at UBS Group

Good morning. Thank you so much for taking my question. So quarter to date, the comp's negative, yet Jordan has outperformed what you would expect it to be. Does this suggest that the assortment excluding Jordan has actually gotten a little bit worse such that Jordan may not be as incremental as anticipated? And does this not beg the question of if the second quarter is negative despite the Jordan launch, what will it take for Academy to now produce a positive comp? Thank you. And then I have a follow-up.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Yes. So no, I don't think it implies some weakness in the overall assortment. Certainly, Jordan is a lift for us, but it's only in half the doors at this point, and it's not dramatically moving the needle yet. Think the Nike expansion that we put out there is right now driving a bigger comp increase for us, because it's just a bigger vendor for us. I think some of the softness we saw in the first quarter in terms of episodic shopping and the customer contracting back when there's not a reason to spend, I think, continues into Q2.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

And I think that's going to continue all the way throughout the remainder of this year, and we plan that in. I think some of the categories we called out that were soft, particularly ammo that was soft in the first quarter, continued into Q2. I think what moves us to positive comps throughout this year is leaning into the strategies that we've articulated. And I think we're also, as we get in later into this quarter, up against a pretty big slowdown from last year post Father's Day, where we were bringing in a new warehouse management system that impacted our ability to fill a chunk of our stores down in the Atlanta area, coupled with some storms. So I think we're still optimistic about the remainder of the quarter and don't feel like there's some underlying softness there that we haven't accounted for in our forecast and projections.

Michael Lasser
Michael Lasser
Equity Research Analyst - Hardlines, Broadlines & Food Retail at UBS Group

Okay. My follow-up question is Academy is now looking at a broader sporting goods retail landscape, where not only is there the potential combination of two of its larger competitors, but also a key vendor that is rapidly growing its wholesale distribution footprint again across the online only players as well as some entry price point players. Does this not suggest that Academy should look proactively lower its margins to drive sales before the market forces it to do so as a result of increased competition over time? Thank you very much.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Well, I mean, it's you're kind of veiling your question there. But I mean, I guess what I would say is the combination of two competitors that already existed in the marketplace, I don't think changes the dynamic that much for us. Mean, Michael, I said this earlier, we're more broad based than just footwear and apparel. Sell certainly footwear and apparel as a chunk of our business, but big outdoor business, hunting, fishing, camping. We do a big recreation business, backyard, grilling, etcetera, that I think puts us in a pretty unique space in the marketplace in terms of the breadth of our assortment.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

And we're going to continue to lean into those things that we're good at and make us different and set us apart. At the same time, I think we already do offer really good value relative to, I think, both competitors you mentioned. And we're not going to lose sight of that. We're going to continue to maintain our value our value positioning in the space to make sure that any kind of pricing increases that create their way into the marketplace, that we're still very focused on maintaining our relative value to competition. So I don't see this changing the dynamic that much for us.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

We're off mall. A lot of the stores you're talking about are on mall, so we're attacking a different customer. We're in more mid sized markets outside of Texas versus large markets. So I think there's plenty of room for both to coexist. And at the heart of your question, if we thought lowering margins would drive more market share and more top line sales, could hold margin dollars constant, we'd certainly look at that.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

We haven't seen anything to indicate that that would actually play out yet.

Michael Lasser
Michael Lasser
Equity Research Analyst - Hardlines, Broadlines & Food Retail at UBS Group

Understood. Good luck for the rest of the second quarter. Thank you very much.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Thanks, Michael. I think we got time for one more question.

Operator

Thank you. Our final question this morning comes from the line of Anthony Chukumba with Loop Capital Markets. Please proceed with your question.

Anthony Chukumba
Managing Director & Senior Research Analyst at Loop Capital Markets LLC

Thanks for squeezing me in, I appreciate it. So you talked about the, you know, the strength in higher income cohorts which is certainly encouraging, you know, how would you characterize the traffic with more of your kind of your core customer, know, because I'm just thinking that, know, if you had strong growth with the higher income customers and sort of net out at mid single digits for traffic decline, you know, I'm just trying to see what that implies for your lower income customers. Thanks. Yeah,

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

mean, we look at it the same way that what you're asking. So basically a of our customers are in quintiles four and five. They're growing. A of our customers are in quintiles one and two. So basically households that make less than 50,000, they're shrinking.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

But the growth in Q4 and '5 is outpacing the shrinking in quintiles one and two. And then a makes about 50 to $100,000 which is kind of our sweet spot, our core. We saw that quintile three, what you call the core customer, those that make 50 to 100 inflect positive in April. I think we're going to continue to see quintiles four and five growing at an outpaced rate to what we're losing at below 50,000. And I think making sure that we have initiatives that are in our base markets that attract those 50,000 to 100,000 customers to us or to shop more frequently is really important.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

I think the stuff that we're doing with customer and customer targeting, we've come up a long way there. I think e commerce lifts all boats. I'm really excited about kind of these technology rollouts that we're doing in stores. We're seeing a lot of lift associated with the sale to sale kind of associate handheld device and RFID things that we're doing. Then Jordan, I think these are things that kind of are in that 50 to 100,000.

Earl Carlton Ford IV
EVP & CFO at Academy Sports & Outdoors

And I think that's, if we get three of those quintiles, I think that's a really good outcome.

Anthony Chukumba
Managing Director & Senior Research Analyst at Loop Capital Markets LLC

Got it. That's helpful. And then just one quick follow-up. So you mentioned and I just want to get a clarification. So we're opening 20 to 25 stores this year and just trying to think about what's the reasonable expectation for next year, particularly given your commentary on potentially kind of moving back store openings because of potential tariff impact?

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Yes. So what we're trying to signal there is we're not giving guidance for next year. But if you go back and look at our original long range plan, I mean, was an acceleration from year to year. I will tell you this year, I think we scaled that number back. I think we're supposed to be 30 to 35, and we're like 20 to 25.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

So I think you could imply probably something accelerating based off whatever we're thinking about this year. But right now, what we've done is just hit pause on signing a lot of new leases until we can get a beat on what the construction costs are going to be. At this point, we would see what we initially would open up in Q1 moving into Q2. So we'll give you more details on that as we get more color on it. But I don't see a change in the overall number for next year.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

I it's just maybe shifting a little bit more out of Q1 into Q2. And as you know, we try to move more up in the front part of the year. So we just wanted to signal that, that may be a little more Q2 weighted next year than we'd hoped for just based off of trying to make sure we get a good view on what's happening from a costing for those stores.

Anthony Chukumba
Managing Director & Senior Research Analyst at Loop Capital Markets LLC

Got it. Thank you.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Thank you.

Operator

Thank you. Ladies and gentlemen, that concludes our time allowed for questions. I'll turn the floor back to Mr. Lawrence for any final comments.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

Thanks. As I always do, I want to sincerely thank our 22,000 plus Academy team members who tirelessly work to give our customers an outstanding shopping experience. I also want to thank our analysts, investors and vendors for listening to our call today. Despite the uncertainty we all face, we feel very confident in our strategy and believe that we're well positioned to not only meet the current challenges, but to come out of this year better positioned than ever to serve our customers and deliver long term growth. I want to leave you by reiterating a few proof points that give us confidence that our strategies are starting to take hold.

Steven Lawrence
Steven Lawrence
CEO & Director at Academy Sports & Outdoors

all the work we've put in has helped our e commerce business run a 10% increase during Q1. the 2022 and 2023 vintages of stores continue to comp positive. we're gaining market share in the face of a challenging consumer environment, driven by an acceleration in customer traffic and consumers whose households make $100,000 or greater. And our Jordan brand launch and Nike expansion plans are just starting to bear fruit and should provide a tailwind the remainder of the year. Thanks for joining us today, and have a great rest of your day.

Operator

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

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