Academy Sports And Outdoors, Inc. · NASDAQ:ASO
Academy Sports And Outdoors — Investor Day (April 2023)
141 slides from Academy Sports And Outdoors's investor day presentation, Apr 4, 2023
Slide 1: 2023 Analyst + Investor Day
2023 Analyst + Investor Day April 4, 2023
Slide 2: Welcome and Today's Agenda
2 Matt HodgesVP, Investor Relations 20+ YEARSEXPERIENCE Welcome and Today’s Agenda Joined 2021
Slide 3: Safe Harbor/Forward Looking Statements
Safe Harbor/Forward Looking Statements This presentation has been prepared by Academy Sports and Outdoors, Inc. (the “Company”) for the exclusive use of the party to whom the Company delivers this presentation (such party, together with its subsidiaries and affiliates, the “Recipient”). This present
Slide 4: Agenda
Agenda 7:30 Welcome 7:40 Academy Sports Overview Current Position & Future PlansKen Hicks: Chairman, President & CEO Industry Positioning & Competitive DifferentiationSteve Lawrence: EVP & Chief Merchandising Officer 8:30 Growth Strategy: New Stores, Omnichannel, Existing Stores New Store Growth Str
Slide 5: Current Position & Future Plans
Current Position & Future Plans 5 Ken HicksChairman, President & CEO 30+ YEARSEXPERIENCE Joined 2018
Slide 6: Today's Critical Takeaways
Today’s Critical Takeaways Academy is a company positioned for growth through new store expansion, omnichannel advancements, and existing store improvements 6 One of the Best Opportunities for Sustainable Growth In Retail Today Durable Profit Model that has Proven Resilient in Various Macro-Economic
Slide 7: Today's Presenters: Experienced Leadership Team
Today’s Presenters: Experienced Leadership Team 7 Ken HicksChairman, President, & CEO Michael MullicanEVP & CFO Steve LawrenceEVP & Chief Merchandising Officer Sam JohnsonEVP, Retail Operations Jamey TraywickSVP, Omnichannel Sherry HarrimanSVP, Logistics & Supply Chain Bill EnnisSVP, Chief Human Res
Slide 8: Years of Sports + Outdoors Leadership
$500M+ 85 Years of Sports + Outdoors Leadership 8 1938 First store, family owned 1988 Opens first "big box" store (35-40K SQ FT) 1994-95 Expands outside of TX, becomes “Academy Sports + Outdoors” 1998 First FL location, Sales reach $500M+ 2011-12 KKR acquires Academy, eCommerce launched, Sales $3B 2
Slide 9: Who is Academy Sports + Outdoors?
Who is Academy Sports + Outdoors? 9 We are a $6.4 billion retailer of trending outdoor and sport categories, operating 268 stores across 18 states We have a significant growth opportunity, highlighted by our current plan to expand store footprint and omnichannel business Deep consumer connections di
Slide 10: Business Was Stuck in Neutral (FY 2013-2018)
Business Was Stuck in Neutral (FY 2013-2018) 10 GDP-like CAGR despite 70 new store openings Sales and profitability per store fell precipitously Unhealthy debt leverage throughout period, peaked at 5.6x Business needed new strategic plan, leadership and culture Units 172 190 209 228 244 253 Note: Le
Slide 11: We Were Not a Strong Operator
We Were Not a Strong Operator Not Focused on the Customer Weak Inventory Management Confusing Merchandising Mix Poor Space Utilization Inefficient Check-out Lack of Omnichannel Strategy Inadequate Inventory and Labor Management Systems Heavy Emphasis on Traditional Print Advertising Weak Executors 1
Slide 12: Well-Positioned in Major Growth Markets
Distribution Center Headquarters KS 6 OK 13 TX 107 MS 8 KY 6 IN 3 AR 8 MO 10 IL 1 FL 14 GA 20 AL 15 VA 1 NC 15 SC 9 TN 13 LA 18 WV 1 Well-Positioned in Major Growth Markets 12 *Store count data is as of January 28, 2023. Real GDP growth represents current-dollar growth measured from 2018 – 2019. 268
Slide 13: 2018: Set New Vision To Fuel Culture Change
2018: Set New Vision To Fuel Culture Change 13 VALUES CUSTOMER focus and service EXCELLENCE in all we do Responsible LEADERSHIP INITIATIVE with urgency STUDENTS of the business INTEGRITY always Positive impact on our COMMUNITIES VISION To be the BEST sports + outdoors retailer in the country MISSION
Slide 14: 2018: Clear Strategy with Accountable Goals
2018: Clear Strategy with Accountable Goals LONG RANGE PLAN Be the POWER MERCHANDISER of Sports + Outdoors Develop a more exciting and productive shopping experience in our STORES Create a MEANINGFUL ‘.COM’ business ENGAGE AND COMMUNICATE with our customers to encourage them to shop at and buy from
Slide 15: Core Pillars = Sustainable Differentiation
3 Core Pillars = Sustainable Differentiation 15 EXPERIENCE ASSORTMENT VALUE
Slide 16: Powerful & Unique Assortment of Brands
LEADING NATIONAL BRANDS LEVERAGING PRIVATE LABEL BRANDS Powerful & Unique Assortment of Brands 16
Slide 17: Value-Based Differentiation
Value-Based Differentiation 17 Price Match Guarantee Everyday Value Pricing Limited Promotional Offers Highlighting Best Brands at Best Value Free Services (assembly, spooling, shipping)
Slide 18: Differentiated Experiences
Differentiated Experiences 18 Superior Customer Experience Team Member Enthusiasts Product Education Local Events Vendor Demonstrations Fun!
Slide 19: True Omnichannel Capabilities
True Omnichannel Capabilities 19 BUY ONLINE, PICKUP IN STORE SHIP TO STORE FROM DC SHIP FROM STORE (ALL STORES) SHIP TO STORE FROM STORE CURBSIDE MOBILE APP ACADEMY.COM Better Search Capabilities Faster Check-out More Payment Options Mobile App FOCUSED ON OMNICHANNEL (NOT ECOM SALES)
Slide 20: Results: All Goals Delivered Early
Results: All Goals Delivered Early 20 Source: Company 10-Ks *Reflects five-year goals in the Company's prior long range plan established in 2018, which had not been previously publicly disclosed. Net sales goal achieved in 2021; E-com penetration goal achieved in 2022; All other listed goals achieve
Slide 21: Results: Sector-Leading Productivity
Results: Sector-Leading Productivity 21 Source: Company financials and Bloomberg. ASO Adj. EBITDA/store calculated as FY 2022 Adj. EBITDA divided by total number of stores. Adj. EBITDA /store is a non-GAAP measure. See appendix for reconciliation. *: SPWH figures our analyst estimates for FY 2022 wi
Slide 22: Results: Created Tremendous Value
Results: Created Tremendous Value Total Shareholder Return Since IPO 22 Almost $4B increase in market-cap since IPO in October 2020 Returned ~$2B to Stakeholders Since IPO Repurchased Over $900 Million of Shares Paid Down Almost $1 Billion of Long-Term Debt Initiated Inaugural Quarterly Cash Dividen
Slide 23: Going Forward: Mission, Vision + Values Remain the Same
Going Forward: Mission, Vision + Values Remain the Same 23 VALUES CUSTOMER focus and service EXCELLENCE in all we do Responsible LEADERSHIP INITIATIVE with urgency STUDENTS of the business INTEGRITY always Positive impact on our COMMUNITIES VISION To be the BEST sports + outdoors retailer in the cou
Slide 24: Path Forward: Growth Strategy
Path Forward: Growth Strategy Open NEW STORES to expand the store base by 50% in existing and new markets Build a more powerful OMNICHANNEL business Drive our EXISTING BUSINESS by: Improving service and productivity in our stores Strengthening our merchandising through meaningful assortment, powerfu
Slide 25: Path Forward: Financial Goals
Path Forward: Financial Goals 25 Our 2027 Goals* NET SALES $10B+ NET INCOME MARGIN 10% ADJ. EBIT MARGIN** 13.5% ROIC** 30% INVENTORY TURNS 3.7x+ NET SALES/SQ FT $365/SQ FT .COM PENETRATION 15%+ 10% Top-line CAGR (2022-2027) *2027 Goals are aspirational or otherwise forward-looking statements and act
Slide 26: Industry Positioning & Competitive Differentiation
Industry Positioning & Competitive Differentiation 26 Steve LawrenceEVP & Chief Merchandising Officer 30+ YEARSEXPERIENCE Joined 2019
Slide 27: Significant Market Opportunity
Significant Market Opportunity 27 $175B+ total U.S. addressable market (“TAM”) Lasting shift of customer spend towards outdoor activities, in-home health and wellness, nesting and experiences Increased demand across all demographics and geographies Largest sporting goods competitor has less than 10%
Slide 28: Gaining Share in a Growing and Highly Fragmented Industry
Gaining Share in a Growing and Highly Fragmented Industry Increasing Participation/SALES Across Categories(1) 28 Gaining Share in POWER BUSINESSES(6) Hunting (2) +5% Fishing +4% Outdoor Cooking Sales (3) +3% Fitness (4) +3% Team Sports (5) +2% Academy’s Market Share 2019-2022 (7) Source: National Sp
Slide 29: Academy's Market Position: Sweet Spot
Academy’s Market Position: “Sweet Spot” 29 Source: Third-party public filings, websites and management’s knowledge of retail industry. (1) Assortment in regards to the sporting goods and outdoors category. Competitive Advantages Full Access to National Brands Diversified Assortment & Value Growing S
Slide 30: One-Stop Shop: Complete Assortment
Season Category Gender One-Stop Shop: Complete Assortment Academy’s Diversified Offering Meets the Needs of ALL Customers 30 Source: Company information; Information is presented for FY 2022.
Slide 31: The Academy Customer
Household Size Children Under 18 at Home 3.2 2.9 53% 41% Gender Age Household Income Ethnicity The Academy Customer 31 Academy Rest of Market Source: Internal customer surveys
Slide 32: National Brands & Private Label
National Brands & Private Label Trusted Partner to National Brands Drives traffic Trusted as critical partner Strong, growing relationships Private Label: Builds Value + Loyalty Works in tandem with national brands, and fills gaps with value offerings Expands across Good-Better-Best categories Magel
Slide 33: Customer Loyalty: Highest NPS in Category
Customer Loyalty: Highest NPS in Category 33 Source: Academy Monthly Tracker, L12M Dec 2022 NPS (Net Promoter Score) = % Promoters - % Detractors; NPS is calculated from this question asked of retailer purchasers: “When thinking about sporting goods, fitness, outdoor, and/or recreational products, h
Slide 34: New Store Growth Strategy
34 Michael MullicanEVP & CFO 20+ YEARSEXPERIENCE Joined 2017 New Store Growth Strategy
Slide 35: Path Forward: Growth Strategy
Path Forward: Growth Strategy Open NEW STORES to expand the store base by 50% in existing and new markets Build a more powerful OMNICHANNEL business Drive our EXISTING BUSINESS by: Improving service and productivity in our stores Strengthening our merchandising through meaningful assortment, powerfu
Slide 36: Why Invest in ASO Store Expansion
Why Invest in ASO Store Expansion Well positioned in a growing industry Academy has the most productive and profitable stores in the industry Strong balance sheet to self-fund new store growth All stores are profitable 36 Our lowest performing stores are at profit parity with the largest sporting go
Slide 37: Current Markets We Serve
Distribution Center Headquarters KS 6 OK 13 TX 107 MS 8 KY 6 IN 3 AR 8 MO 10 IL 1 FL 14 GA 20 AL 15 VA 1 NC 15 SC 9 TN 13 LA 18 WV 1 Current Markets We Serve 37 268 Current Locations
Slide 38: New Store Economics
New Store Economics 38 $18M Year 1 Sales Target (includes omnichannel) $5-6M Capital to Open 4-5 Years Sales Ramp 20% ROIC Hurdle > Year 1 EBITDA Positive
Slide 39: Our Category: Short-Term Resiliency
Our Category: Short-Term Resiliency Sporting + Outdoors Proven Resilient in Last Recession (2009) 39 Source: U.S. Census Bureau Health and Personal Care Stores Food and Beverage Stores Grocery Stores Health and Personal Care Stores Food Services and Drinking Places General Merch. Stores Nonstore Ret
Slide 40: Our Category: Consistent Growth
Our Category: Consistent Growth Consumer Spending on Sporting Equipment, Supplies, Guns and Ammunition (millions) 40 Source: Bureau of Economic Analysis; LT PCE Categories; Morgan Stanley Proprietary Outdoor & Active Living 2022 Survey 5.6% 22-Year CAGR US Sporting Goods Market (2019–2025) 7.9% CAGR
Slide 41: Geographic Expansion Opportunity
Geographic Expansion Opportunity New Stores: Current Markets + Beyond 41 Sources: US Census, Cooper Center for Public Service Estimated Population Growth (2020-2030) State Expected Growth % Texas 5,134,383 17.3% Florida 3,495,407 16.0% California 3,312,476 8.2% Georgia 1,109,775 10.3% North Caroli
Slide 42: Underpenetrated Omnichannel, Big Opportunity
Underpenetrated Omnichannel, Big Opportunity 42 Source: eMarketer, Jan 2022 Retail Ecommerce Sales Worldwide (2020-2025) of retail sales will be from a retail store of consumers agree there is a need to go into a physical store to purchase items of consumers believe the most appealing retail stores
Slide 43: 2022 New Store Momentum
1 4 5 8 7 6 9 3 2 2022 New Store Momentum 43 2022 Openings Conyers (Atlanta), GA Panama City, FL Short Pump (Richmond), VA 4. Perimeter (Atlanta), GA 5. Lexington, KY 6. Jeffersonville (Louisville), IN 7. Meyerland (Houston), TX 8. Barboursville (Huntington), WV 9. Pinellas Park (Tampa), FL 2023 TAR
Slide 44: New Store Learnings
New Store Learnings Continuous Cycle of Improvement As students of the business, we leverage the insights and knowledge acquired to make the next store better than the last one 44 Key Findings to Date Positive customer feedback and behavior, regardless of market type Higher % of customers who said t
Slide 45: Five Year Store Growth Plan
Five Year Store Growth Plan: 120 to 140 New Stores 45 120–140 Planned by 2027 Current Footprint Opportunity: 50-60 stores Adjacent Footprint Opportunity: 70-80 stores Current Adjacent Future
Slide 46: Long-Term Expansion Strategy
Long-Term Expansion Strategy Fill out existing markets to build scale Balance between new and existing markets Enter new markets in a meaningful way (start with core sites in center of the retail markets) Maximize incremental vs. cannibalistic sales New stores take 4-5 years to ramp, progressing fro
Slide 47: Growth Summary: New Stores
Growth Summary: New Stores KEY TAKEAWAYS Very productive store economics Balanced approach serving existing, adjacent and under-served markets Strong real estate and support organizations Optimizing new store opening procedures today and continual learning process 47 $10B+ Total Revenue Goal* New St
Slide 48: Continuing Omnichannel Momentum
Continuing Omnichannel Momentum 48 Jamey TraywickSVP, Omnichannel 20+ YEARSEXPERIENCE Joined 2018
Slide 49: Path Forward: Growth Strategy
Path Forward: Growth Strategy Open NEW STORES to expand the store base by 50% in existing and new markets Build a more powerful OMNICHANNEL business Drive our EXISTING BUSINESS by: Improving service and productivity in our stores Strengthening our merchandising through meaningful assortment, powerfu
Slide 50: Academy is a True Omnichannel Retailer
Academy is a True Omnichannel Retailer We have built an e-commerce and mobile platform that have a true connection with our stores 75% of e-commerce sales fulfilled in stores 60+% of Omnichannel customer spend came from those within 10 miles of a store (Nov-Dec 2022) 60+% growth in omnichannel custo
Slide 51: Made Significant Progress Since 2018
Made Significant Progress Since 2018 Grew My Accounts +259%Since 2018 51 Removed Friction in Checkout Implemented New Site Search
Slide 52: Made Significant Progress Since 2018
Made Significant Progress Since 2018 Added New Fulfillment Capabilities 52 Launched our Mobile App Developed Omnichannel Customers Ship from Store (All Stores) Ship to Store From DC Buy Online Pickup In Store Curbside Ship to Store From Store Save the Sale 2019 2020 2021 +170%Since 2019
Slide 53: Significant Sales + Progress Since 2018
Significant Sales + Progress Since 2018 53 Category Improvement (2018-2022) Sessions +82% Conversion +80 bps Penetration +580 bps Gross Margin +920 bps Net Shipping Costs -192 bps Net Sales +198% Increase Traffic Increase Revenue Increase Engagement Reduce Costs Critical Goals Omnichannel is Profita
Slide 54: Only Scratched Surface of Our Potential
` Only Scratched Surface of Our Potential 54 UPPER FUNNEL LOWER FUNNEL Internal Product Catalog Discovery - External Discovery - Internal Fulfillment Checkout My Account Our Primary Focus Has Been Here Next Steps in Our Journey
Slide 55: Go Forward Omnichannel Pillars
Go Forward Omnichannel Pillars 55 Source: Forrester Research, Strategy Work with ASO Engagement View of the Customer Products & Pricing Fulfillment
Slide 56: Supporting Engagement & View of Customer
Supporting Engagement & View of Customer Team Member Mobile Capabilities Mobile App Remove Friction Drive Conversion 56 One View of the Customer First Party Data My Account Improvements Personalization Engagement View of the Customer
Slide 57: Delivering Engaging Experiences
Delivering Engaging Experiences Coming Soon Exclusively for My Account Customers in Mobile App: Savings Tracker s 57
Slide 58: Products, Pricing & Fulfillment Support
Products, Pricing & Fulfillment Support Endless Aisle Inventory Accuracy Product Data Quality 58 Delivery/Pick-up Reliability Reduce Contacts Improved Order Communication Wayfinding Products & Pricing Fulfillment
Slide 59: Highlighting Value on our Products
Highlighting Value on our Products 59 ACADEMY CREDIT CARD APPLICATIONS
Slide 60: Omnichannel Customer Journey
Omnichannel Customer Journey 60
Slide 61: Growth Summary: Omnichannel
Growth Summary: Omnichannel KEY TAKEAWAYS Significant progress made since 2018 and growing momentum Academy is now a true Omnichannel retailer We are ready to take the next step by adding new customer and team member facing capabilities Greater customer insights and new store expansion will help fue
Slide 62: Investing in the Customer Experience
Investing in the Customer Experience 62 Sam JohnsonEVP, Retail Operations 30+ YEARSEXPERIENCE Joined 2017
Slide 63: Path Forward: Growth Strategy
Path Forward: Growth Strategy Open NEW STORES to expand the store base by 50% in existing and new markets Build a more powerful OMNICHANNEL business Drive our EXISTING BUSINESS by: Improving service and productivity in our stores Strengthening our merchandising through meaningful assortment, powerfu
Slide 64: Improve Customer Experience, Inventory Productivity, Operational Productivity
64 Improve Customer Experience Enhance Inventory Productivity Increase Operational Productivity
Slide 65: Serving Customers by Investing in our People + Process
Serving Customers by Investing in our People + Process 65 PEOPLE Hiring passionate team members that love what we sell + creating an environment that promotes diversity and career growth. Building a customer-first culture through Greet/Help/Thank. Improved hiring model with focus on finding “Enthusi
Slide 66: Achieving Success by Investing in the Customer Experience
Achieving Success by Investing in the Customer Experience 66 *Competitive Benchmark is determined by the overall customer satisfaction scores of Big Box retail locations provided by Service Management Group (SMG) for calendar year 2022 (1/1/22 - 12/31/22).Note: Comparisons to other concepts should b
Slide 67: Redefining a Dynamic Checkout Experience
Redefining a Dynamic Checkout Experience Implementing a queue-lane checkout model to increase checkout speed and product merchandising to improve the customer experience. Focused on fast + friendly checkout processes to help customers get to the fun faster. Elevating Merchandise Presentations Improv
Slide 68: Redefining a Dynamic Checkout Experience
Redefining a Dynamic Checkout Experience Before Multiple lines with a congested front wall. Product separated in lines with limited representation. 68 After Better merchandise representation. Increased checkout speed. Improved front end sales +8% and customer satisfaction +1.8%. 141 queue-checkout s
Slide 69: Elevating Merchandise Presentations
Elevating Merchandise Presentations Before No way finding signage or presentation ability to enhance brands/categories in camping. 69 After Improved customer shopping experience with stronger brand/vendor statements. Use of Wayfinding and Brand Callouts.
Slide 70: Elevating Merchandise Presentations
Elevating Merchandise Presentations Store Refreshes 25 – 30 refreshes planned per year going forward Implementing enhancements that improve the customer experience + focus on key businesses Stronger Presentations Fishing Reel Bar Sunglass Showcase Camping Flat Workwear Shops Line Queueing Facility U
Slide 71: Accelerating Our Omnichannel Business
Accelerating Our Omnichannel Business Stores are the facilitator of our Omnichannel Growth Focused on serving customers with how they want to shop through in-store, BOPIS/Curbside + Ship-to-Home. In 2022, 97% of all company sales were fulfilled through stores. 71
Slide 72: Optimizing Store Labor to Serve Customers
Optimizing Store Labor to Serve Customers GEARED TOWARDS PRODUCTIVITY Investment in dynamic scheduling solution to align team members with customers. Process Improvements have increased productivity in stores. Removing unnecessary tasks to provide more meaningful customer-facing support. Service-foc
Slide 73: Investing in Technology to Drive Productivity
Investing in Technology to Drive Productivity 73 Enhance Inventory Productivity Implementing RFID Technology Improves inventory accuracy and replenishment to drive better customer service + sales. Team members will find RFID tagged product faster, which creates labor efficiencies that translate to t
Slide 74: Customer Focused Goals for Future Growth
Customer Focused Goals for Future Growth Maximize capital investments in New Stores + Refreshes focused on growth, sustainability, and profitability. Develop a more exciting and productive shopping experience in stores by consistently elevating our service standards. Increase the productivity of our
Slide 75: Merchandising, Marketing & Customer Engagement
Merchandising, Marketing & Customer Engagement 75 Steve LawrenceEVP & Chief Merchandising Officer 30+ YEARSEXPERIENCE Joined 2019
Slide 76: Path Forward: Growth Strategy
Path Forward: Growth Strategy Open NEW STORES to expand the store base by 50% in existing and new markets Build a more powerful OMNICHANNEL business Drive our EXISTING BUSINESS by: Improving service and productivity in our stores Strengthening our merchandising through meaningful assortment, powerfu
Slide 77: 2018-2022: Merchandising Successes
2018-2022: Merchandising Successes MERCHANDISING Identified core customer (Active Young Families) Edited out unproductive categories and vendors Strengthened open-to-buy disciplines Unified assortment planning process Improved localization efforts 77 Inventory Turns* PLANNING + ALLOCATION Implemente
Slide 78: 2023-2027: Power Merchandising Strategies
2023-2027: Power Merchandising Strategies 78 Lean into Position as Value Leader Improve + Refine Localization Distort Growth in Power Businesses to Drive Sales + Margins
Slide 79: Lean into Position as Value Leader
Lean into Position as Value Leader 79 Expand Every-Day-Value Pricing Thoughtfully Manage Promotional Pricing Utilize Clearance to Drive Volume During Lower Traffic Time Periods Reinforce our Price Match Guarantee Get Credit for Free Value-Added Services EXAMPLE: Lean into Position as Value Leader
Slide 80: Improve + Refine Localization
Improve + Refine Localization 80 Improved Climatic Assortments Expanded use of Size Profiling Leverage Regional Moments EXAMPLE: Improve + Refine Localization
Slide 81: Distort Growth in Power Businesses to Drive Sales + Margin
Distort Growth in Power Businesses to Drive Sales + Margin 81 Accelerate Growth In Apparel + Footwear Continue to Drive Growth In Team Sports Capture Market Share In Outdoor Categories Grow Private Brands to ~25% of Total Sales EXAMPLE: Distort Growth in Power Businesses to Drive Sales + Margins
Slide 82: 2018-2022: Marketing/Engagement Successes
2018-2022: Marketing/Engagement Successes MARKETING Focused on Marketing System & Process Improvements Reduced Reliance on Traditional Mediums (print & broadcast) Improved Targeted Marketing from <5% to >50% Drove Greater Consistency of Branding Across all Touch Points 82 ENGAGEMENT Built Foundation
Slide 83: 2023-2027: Marketing Optimization Strategies
2023-2027: Marketing Optimization Strategies 83 Drive Increased Traffic To Stores And .Com Grow Our Customer Base Increase Brand Awareness To Help Launch New Stores
Slide 84: Grow Our Customer Base
Grow Our Customer Base 84 New store expansion Grow our marketing Investment and expand our reach Expand content capture to fuel social media growth Refine and expand our media effectiveness measurement capabilities EXAMPLE: Grow Our Customer Base
Slide 85: Drive Increased Traffic To Stores + .Com
Drive Increased Traffic To Stores + .Com 85 Leverage our new, more robust Customer Data Platform (CDP) Driving higher engagement and reactivation rates through increased target marketing to >70% Rollout expanded loyalty efforts Drive Increased Traffic To Stores And .Com Customer Database Data Captur
Slide 86: Increase Brand Awareness To Help Launch New Stores
Increase Brand Awareness To Help Launch New Stores 86 Leverage additional marketing spend to launch new stores Increase investment across all 3 phases of our new store marketing (Seeding, Launch & Sustainment) Apply lessons learned from current vintages of new stores marketing to future efforts EXAM
Slide 87: Growth Summary: Existing Stores
Growth Summary: Existing Stores KEY TAKEAWAYS Have become a more sophisticated merchandiser and marketer Will continue to lean into value position, localization and power businesses to drive sales and margin growth Focused on increasing brand awareness to support growing footprint and drive traffic
Slide 88: Enhancing Our Supply Chain
Enhancing Our Supply Chain 88 Sherry HarrimanSVP, Logistics & Supply Chain 25+ YEARSEXPERIENCE Joined 2018
Slide 89: Path Forward: Growth Strategy
Path Forward: Growth Strategy Open NEW STORES to expand the store base by 50% in existing and new markets Build a more powerful OMNICHANNEL business Drive our EXISTING BUSINESS by: Improving service and productivity in our stores Strengthening our merchandising through meaningful assortment, powerfu
Slide 90: Supply Chain Supported by Global Network
Supply Chain Supported by Global Network We have a Global Transportation Network with Capacity to Grow 90 20+ Countries 30+ States 47 States Import Network Domestic Network Outbound Network
Slide 91: 2018-2022: Supply Chain Successes
2018-2022: Supply Chain Successes 91 Improved Productivity of Team MembersOptimized processes to drive efficiency in the four walls Leveraged Current AssetsEnabled 15% increase in throughput with minimal investment Reduced Supply Chain Cycle Time Achieved 15% reduction in DC processing time Transpor
Slide 92: Supply Chain at a Glance
Supply Chain at a Glance We have enough distribution capacity to handle NEW Store Growth PLANS 92 Leveraging future initiatives to drive additional capacity in our current network… Distribution center Twiggs Cookeville *All DC’s service e-Com Katy DISTRIBUTION FOOTPRINT (SQ. FT.) YEAR BUILT % UTILIZ
Slide 93: Critical Actions to Support Growth
Critical Actions to Support Growth 93 Expand Capacity & Capabilities Ensure Consistent Standards + Execution Enhance Visibility Build + Develop Talent
Slide 94: Expand Capacity + Capabilities
Expand Capacity + Capabilities 94 Detailed Action Plan Technology Enhancements WMS Manhattan Implementation Pinc Yard Trailer Management Scalable Transportation Programs Origin Management and Customs Broker Optimize Footprint and Evaluate Equipment High Density Racking New Distribution Center Expand
Slide 95: Ensure Consistent Standards + Execution
Ensure Consistent Standards + Execution 95 Detailed Action Plan Process Standardization Twiggs efficiency to network parity Implement Continuous Improvement Continue to Leverage Upstream 15% increase in Dock-to-Dock Flow by Leveraging Pre-Packs and Pre-Allocation Leverage Item Dimension Benefits in
Slide 96: Enhance Visibility
Enhance Visibility 96 Detailed Action Plan End-To-End Visibility Implement P-44 throughout our transportation network Transportation Management Solutions DC Labor Planning Transportation Network Review DC Outbound Route Optimization Backhaul Alignment Enhance Visibility Action Impacts Real-Time Inve
Slide 97: Build + Develop Talent
Detailed Action Plan Invest in our Team Members Flexible Staffing Model Enhance Pay for Performance Program Enhance and Recruit Talent DC Operations Support Structure Integrate with Merchant Organization Grow our Data Analytics Team Build a Talent Bench for DC #4 Build + Develop Talent 97 Action Imp
Slide 98: Results of Critical Actions
Results of Critical Actions 98 Future State Benefits* ~20% Increase in Unit Productivity ~30% Improvement in eCom Fulfilment Cost ~45% Decrease in Lead Time, Driving In-Stocks ~15% Leverage in Transportation Cost to Serve P&L Impact 100+ Basis Point Profitability Improvement ~10% Increase in Existin
Slide 99: Future State Goals
Future State Goals 99 Servicing the Existing Store Base by creating a more efficient and effective supply chain Support New Store + Omnichannel Growth with expanded capacity Support Private Brand Growth by partnering with Sourcing Drive Inventory Efficiency by reducing lead time in the Distribution
Slide 100: Commitment to ESG
Commitment to ESG 100 Rene CasaresSVP, General Counsel & Secretary 20+ YEARSEXPERIENCE Joined 2013
Slide 101: ESG Purpose Statement
ESG Purpose Statement At Academy Sports + Outdoors, we believe that practicing corporate responsibility: Strengthens our accountability and performance Supports the long-term interests of our stakeholders Furthers the achievement of Our Vision to be the best sports + outdoors retailer in the country
Slide 102: Our ESG Pillars
Our ESG Pillars Sustaining our Planet We’re committed to keeping the outdoors fun for generations to come. That’s why we’re taking a thoughtful approach to our environmental impact—so you can feel good about gearing up for the great outdoors. Climate + Carbon Footprint Sustainable Products + Packagi
Slide 103: Sustaining the Planet
Sustaining the Planet 103 Data as of FYE 2021 All new retail locations will be equipped with environmentally friendly design elements Conserves valuable natural resources and reduces harmful carbon emissions Last year, we reported our baseline Scope 1 + 2 greenhouse gas emissions (GHG) for 2021 Set
Slide 104: Empowering Our Communities
Empowering Our Communities Team Member Development We provide Team Members with personal growth, cross functional training and career advancement opportunities Recruiting + Retaining Talent Training + Development Compensation + Benefits Diversity, Inclusion + Belonging Workplace Safety + Wellness 10
Slide 105: Operating with Integrity
Operating with Integrity 105 of our directors are independent of our directors are women of our directors are women or ethnic minorities of our Board committees are chaired by women Committed to protecting the information of our team members, customers, business partners, and Company from unauthoriz
Slide 106: Oversight & Improvement
Oversight & Improvement Comprehensive ESG oversight is performed by the Board and its committees 106 • Team Member matters • Diversity, equity, inclusion + belonging • Comp, benefits, wellness • Engagement + training • Succession planning Compliance Ethics + Whistleblowing Safety Cybersecurity + dat
Slide 107: Our Commitments and Focus
Our Commitments and Focus Our ESG Program will Continue to Focus on: Keeping our customers active and connected with experiences Investing in our Team Members Developing a diverse and inclusive society and workplace Ensuring the quality and safety of our products, workplaces, and retail experience S
Slide 108: Investing in our Team Members, Culture & Communities
Investing in our Team Members, Culture &Communities 108 Bill EnnisSVP, Chief Human Resources Officer 30+ YEARSEXPERIENCE Joined 2008
Slide 109: Path Forward: Growth Strategy
Path Forward: Growth Strategy Open NEW STORES to expand the store base by 50% in existing and new markets Build a more powerful OMNICHANNEL business Drive our EXISTING BUSINESS by: Improving service and productivity in our stores Strengthening our merchandising through meaningful assortment, powerfu
Slide 110: Culture is Central to Academy's Success
Culture is Central to Academy’s Success Our Values Establish a Strong Foundation for Our Culture + Represent the Key Expectations We Have of Our Team Members: 110 ACADEMY'S VALUES Customer Focus and Service Excellence In All We Do Responsible Leadership Initiative With Urgency Students of the Busine
Slide 111: Our Commitments to Support our Growth
Our Commitments to Support our Growth Our Commitments: Develop internal talent to support enterprise growth Recruit external talent by showcasing our culture and engaging work environment Provide additional skills training to enhance customer interactions Support and encourage our Diversity, Inclusi
Slide 112: Great Place to Work
Great Place to Work Fun: Intramurals(Cricket, Soccer, Volleyball) Cornhole Tournaments Food Trucks 5K Runs Trunk-or-Treat for Families Free Thanksgiving Day lunch Campus Christmas party 112 HEALTH/Financial Wellness: 401k: 6%, 100% match Employee stock purchase plan Competitive medical benefits Tuit
Slide 113: Leadership Development
Leadership Development Our training offerings include courses designed to improve the skills needed for specific roles, as well as those designed for anyone looking to sharpen their knowledge and skills: Executive Training Program Buyer University Manager-in-Training Program Team Lead Development Ac
Slide 114: Our Team Resource Groups (TRGs)
Our Team Resource Groups (TRGs) Diversity, Inclusion & Belonging 114
Slide 115: Helping Our Communities in Times of Need
Helping Our Communities in Times of Need New Orleans, LA, Hurricane Ida Relief 115 Jackson, MS Water Donation Mayfield, KY Tornado Relief Pasadena, TX Tornado Relief $1.8M in financial assistance to Academy Team Members impacted by natural disasters since 2019
Slide 116: Financials & Wrap-up
Financials & Wrap-up 116 Ken HicksChairman, President & CEO Michael MullicanEVP & CFO
Slide 117: Significant Outperformance Since IPO
117 Significant Outperformance Since IPO Chart reflects trading data from 10/2/20 – 3/22/23 Sporting Goods Retail Peer index consists of BGFV, DKS, HIBB, and SPWH. Index is market-capitalization weighted.
Slide 118: Significant Outperformance Since IPO
Significant Outperformance Since IPO 118 Through Q4 2022 $1.1B > $2.0B ~ $2.0B IPO Valuation in October 2020 vs. $5B Today Cumulative FCF Generation since 2019 Returned THRU Debt Reduction, Share Repurchase & Dividends $4B Increase in Market Cap Since IPO
Slide 119: Sales/Margin Trends, Strong Foundation
Sales/Margin Trends, Strong Foundation Net Sales (Billions) & Comparable Sales Gross Profit (Billions) & Margin Rate Adjusted EBIT* (Millions) & Margin Rate 119 Source: Fiscal 2022 10-K *See appendix for reconciliations of Non-GAAP measures. +40.0% CAGR +10.0% CAGR +6.0% CAGR
Slide 120: Enhanced, Sustainable Profits
Enhanced, Sustainable Profits ADJUSTED NET INCOME*(Millions) 120 Source: Fiscal 2022 10-K *See appendix for reconciliations of Non-GAAP measures. Adjusted Pro Forma Earnings per Share* +74% CAGR +70% CAGR
Slide 121: Strong Cash Flow Generation + ROIC
Strong Cash Flow Generation + ROIC Adjusted Free Cash Flow*(Millions) 121 Source: Fiscal 2022 10-K *See appendix for reconciliations of Non-GAAP measures. Return on Invested Capital (ROIC)* +35% CAGR
Slide 122: Strong Balance Sheet is a Competitive Advantage
Strong Balance Sheet is a Competitive Advantage That Supports Growth 122 Note: Leverage ratio is defined as Net Debt divided by adjusted EBITDA. See appendix for reconciliation of non-GAAP measures. Source: Fiscal 2021 and 2022 10-K reports *Net Debt $1,314 Net Leverage 4.1x *Net Debt $250 Net Lever
Slide 123: Reaffirming Fiscal 2023 Outlook
Reaffirming Fiscal 2023 Outlook Leverage market position as value leader Accelerate new store growth & omnichannel penetration Continue to drive industry leading levels of service, productivity, assortment and fun 123 $6.5 - $6.7B Net SalesTotal Sales Growth 2-5% (2.0)% to +1.0% Comp Sales 34.0% - 3
Slide 124: Path to Growth Summary
Path to Growth Summary 124 ~10% Top-Line CAGR $10B+ $6.4B New Stores Omni- channel $10B+ Total Revenue Goal* Omnichannel $0.7 - $0.9B+ Existing Stores $0.5 - $0.7B+ New Stores $2.4 - $ 2.8B+ Today $6.4B $2.4 - $ 2.8B+ $0.7 - $0.9B+ $0.5 - $0.7B+ *2027 Goals are aspirational or otherwise forward-look
Slide 125: Multiple Levers to Sustain Margin Profile
Multiple Levers to Sustain Margin Profile Product Mix Expand penetration of higher-margin Private brands across platform 125 Supply Chain New Warehouse Management System expected to yield efficiencies Leverage supply chain visibility to drive transportation efficiencies from increased planning and f
Slide 126: Path to 13.5% Adjusted EBIT Margin
Path to 13.5% Adjusted EBIT Margin 126 FY 2022 Adj. EBIT Margin* Merchandise Margin Supply Chain Improvement New Distribution Center eCom Fulfillment Marketing/ Digital Investments New Store Expenses Depreciation/ Technology/ Other FY 2027e Adj. EBIT Margin** ~40 bps ~100 bps (~40 bps) (~40 bps) (~4
Slide 127: Capital Expenditures Plan: All Self Funded
Capital Expenditures Plan: All Self Funded Expect to spend ~$1.5 billion over the next five years* $200-$250M $260-$290M $320-$350M $320-$350M $340-$370M 3.4% 3.8% 4.2% 3.8% 4.0% TOTAL % OF SALES CapEx Includes: New Stores and Store Remodels, Distribution Center, Strategic Initiatives, and Maintenan
Slide 128: Balanced Capital Allocation
~$3.5B …available over the next 5 years to drive stakeholder value and provide financial stability Balanced Capital Allocation Maintain one of best balance sheets in our industry Self-fund growth and strategic priorities Return capital to stakeholders through dividend growth, opportunistic share rep
Slide 129: Path Forward: Strategy & Goals
Path Forward: Strategy & Goals OUR STRATEGY Open NEW STORES to expand the store base by 50% in existing and new markets Build a more powerful OMNICHANNEL business Drive our EXISTING BUSINESS by: Improving service and productivity in our stores Strengthening our merchandising through meaningful assor
Slide 130: Q+A Session
Q+A Session
Slide 131: Appendix
Appendix
Slide 132: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Adjusted EBITDA, Adjusted EBIT, Adjusted Net Income, Adjusted Earnings per Common Share, Adjusted Free Cash Flow, Net Debt and ROIC have been presented in this presentation as supplemental measures of financial performance that are not required by, or presented in ac
Slide 133: Adjusted EBITDA and Adjusted EBIT definitions
We define “Adjusted EBITDA” as net income (loss) before interest expense, net, income tax expense and depreciation, and amortization, and impairment, further adjusted to exclude equity compensation expense, (gain) loss on early retirement of debt, net, payroll taxes associated with a vesting event,
Slide 134: Adjusted Net Income definitions
We define “Adjusted Net Income (Loss)” as net income (loss), plus equity compensation expense, (gain) loss on early retirement of debt, net, payroll taxes associated with the 2021 Vesting Event and other adjustments, less the tax effect of these adjustments. We define “Adjusted Earnings per Common S
Slide 135: (a) Represents outside consulting fees associated with our strategic cost savings and business optimization
135 (a) Represents outside consulting fees associated with our strategic cost savings and business optimization initiatives. (b) Represents our contractual payments under the Monitoring Agreement. (c) Represents non-cash charges related to equity based compensation, which vary from period to period
Slide 136: Adjusted Free Cash Flow
136 We define “Adjusted Free Cash Flow” as net cash provided by (used in) operating activities less net cash provided by (used in) investing activities. We describe these adjustments reconciling net cash provided by operating activities to Adjusted Free Cash Flow in the following table. Adjusted Fre
Slide 137: Net Debt
137 Fiscal Year Ended January 28, 2023 January 29, 2022 January 30, 2021 February 1, 2020 Long-term debt, net $ 584,456 $ 683,585 $ 781,489 $ 1,428,542 Current maturities of long-term debt 3,000 3,000 4,000 34,116 Total Long-term debt 587,456 686,585 785,489 1,462,658 Cash & cash equivalents 337,145
Slide 138: Adjusted EPS Guidance Reconciliation
138 Low Range* High Range* (in millions, except per share amounts) Fiscal Year Ending February 3, 2024 Fiscal Year Ending February 3, 2024 GAAP Net Income $ 535.0 $ 595.0 Equity compensation (a) 28.0 28.0 Tax effects of these adjustments (a) (6.6) (6.6) Adjusted Net Income $ 556.4 $ 616.4 GAAP Earni
Slide 139: Return On Invested Capital
139 Return On Invested Capital Return on Invested Capital (ROIC) is calculated as follows: (i) the numerator is defined as Adjusted EBITDA plus rent minus estimated taxes; and (ii) the denominator is defined as: (a) the sum of the 13-month average balances for: net receivables, inventory, prepaid ex
Slide 140: Circana/Retail Tracking Service Category details
Circana/ Retail Tracking Service Category details Apparel Apparel excludes bodysuits/leotards, bras (non-sport), camisoles, dress pants, dress shirts, dresses, full/half slip, jackets/blazers, knee highs, leggings, one-piece performance suits, pajama sets, pantyhose, shapewear, sportcoats, stockings
Slide 141: Slide 141
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