UNITED STATES | ||||||||||||||
SECURITIES AND EXCHANGE COMMISSION | ||||||||||||||
Washington, D.C. 20549 | ||||||||||||||
FORM | ||||||||||||||
(Mark One) | ||||||||||||||
For the Quarterly Period Ended | ||||||||||||||
or | ||||||||||||||
For the transition period from ___________ to ___________. | ||||||||||||||
Commission File No. | ||||||||||||||
(Exact name of registrant as specified in its charter) | ||||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) (Zip Code) | ||||||||||||||
( | ||||||||||||||
(Registrant’s Telephone Number, including Area Code) | ||||||||||||||
Not applicable | ||||||||||||||
(Former name, former address and former fiscal year, if changed since last report) | ||||||||||||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | ||||||||||||||
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). | ||||||||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. | ||||||||||||||
Accelerated filer ☐ | ||||||||||||||
Non-accelerated filer ☐ | Smaller reporting company | |||||||||||||
Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ | ||||||||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes | ||||||||||||||
As of November 30, 2022, Academy Sports and Outdoors, Inc. had |
Page | |||||
October 29, 2022 | January 29, 2022 | October 30, 2021 | ||||||||||||||||||
ASSETS | ||||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | |||||||||||||||||
Accounts receivable - less allowance for doubtful accounts of $ | ||||||||||||||||||||
Merchandise inventories, net | ||||||||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||||||||
Assets held for sale | ||||||||||||||||||||
Total current assets | ||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET | ||||||||||||||||||||
RIGHT-OF-USE ASSETS | ||||||||||||||||||||
TRADE NAME | ||||||||||||||||||||
GOODWILL | ||||||||||||||||||||
OTHER NONCURRENT ASSETS | ||||||||||||||||||||
Total assets | $ | $ | $ | |||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||
Accounts payable | $ | $ | $ | |||||||||||||||||
Accrued expenses and other current liabilities | ||||||||||||||||||||
Current lease liabilities | ||||||||||||||||||||
Current maturities of long-term debt | ||||||||||||||||||||
Total current liabilities | ||||||||||||||||||||
LONG-TERM DEBT, NET | ||||||||||||||||||||
LONG-TERM LEASE LIABILITIES | ||||||||||||||||||||
DEFERRED TAX LIABILITIES, NET | ||||||||||||||||||||
OTHER LONG-TERM LIABILITIES | ||||||||||||||||||||
Total liabilities | ||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES (NOTE 12) | ||||||||||||||||||||
STOCKHOLDERS' EQUITY: | ||||||||||||||||||||
Preferred stock, $ | ||||||||||||||||||||
Common stock, $ | ||||||||||||||||||||
Additional paid-in capital | ||||||||||||||||||||
Retained earnings | ||||||||||||||||||||
Accumulated other comprehensive loss | ( | |||||||||||||||||||
Stockholders' equity | ||||||||||||||||||||
Total liabilities and stockholders' equity | $ | $ | $ |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||||||
NET SALES | $ | $ | $ | $ | ||||||||||||||||||||||
COST OF GOODS SOLD | ||||||||||||||||||||||||||
GROSS MARGIN | ||||||||||||||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | ||||||||||||||||||||||||||
OPERATING INCOME | ||||||||||||||||||||||||||
INTEREST EXPENSE, NET | ||||||||||||||||||||||||||
LOSS ON EARLY RETIREMENT OF DEBT | ||||||||||||||||||||||||||
OTHER (INCOME), NET | ( | ( | ( | ( | ||||||||||||||||||||||
INCOME BEFORE INCOME TAXES | ||||||||||||||||||||||||||
INCOME TAX EXPENSE | ||||||||||||||||||||||||||
NET INCOME | $ | $ | $ | $ | ||||||||||||||||||||||
EARNINGS PER COMMON SHARE: | ||||||||||||||||||||||||||
BASIC | $ | $ | $ | $ | ||||||||||||||||||||||
DILUTED | $ | $ | $ | $ | ||||||||||||||||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||||||||||||
BASIC | ||||||||||||||||||||||||||
DILUTED |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||||||
COMPREHENSIVE INCOME: | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Recognized interest expense on interest rate swaps | ||||||||||||||||||||||||||
Tax expense | ( | ( | ||||||||||||||||||||||||
Total comprehensive income | $ | $ | $ | $ |
Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balances as of January 29, 2022 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Equity compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock for retirement | ( | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
Settlement of vested Restricted Stock Units | ( | — | — | |||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balances as of April 30, 2022 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Equity compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock for retirement | ( | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
Settlement of vested Restricted Stock Units | ( | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | ||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balances as of July 30, 2022 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Equity compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock for retirement | ( | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
Settlement of vested Restricted Stock Units | ( | — | — | |||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividends declared, $ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balances as of October 29, 2022 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balances as of January 30, 2021 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Equity compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Settlement of vested Restricted Stock Units | ( | — | — | |||||||||||||||||||||||||||||||||||
Share-Based Award Payments adjustment for forfeitures | — | — | — | — | ||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | ||||||||||||||||||||||||||||||||||||
Recognized interest expense on interest rate swaps (net of tax impact of $ | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balances as of May 1, 2021 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Equity compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock for retirement | ( | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
Settlement of vested Restricted Stock Units | ( | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | ||||||||||||||||||||||||||||||||||||
Stock option exercises | — | — | ||||||||||||||||||||||||||||||||||||
Recognized interest expense on interest rate swaps (net of tax impact of $ | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balances as of July 31, 2021 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Equity compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock for retirement | ( | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||||
Stock option exercises | — | — | ||||||||||||||||||||||||||||||||||||
Recognized interest expense on interest rate swaps (net of tax impact of $ | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balances as of October 30, 2021 | $ | $ | $ | $ | ( | $ |
Thirty-Nine Weeks Ended | ||||||||||||||
October 29, 2022 | October 30, 2021 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Non-cash lease expense | ||||||||||||||
Equity compensation | ||||||||||||||
Amortization of terminated interest rate swaps, deferred loan and other costs | ||||||||||||||
Deferred income taxes | ||||||||||||||
Non-cash loss on early retirement of debt | ||||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Accounts receivable, net | ||||||||||||||
Merchandise inventories, net | ( | ( | ||||||||||||
Prepaid expenses and other current assets | ( | |||||||||||||
Other noncurrent assets | ( | |||||||||||||
Accounts payable | ||||||||||||||
Accrued expenses and other current liabilities | ( | |||||||||||||
Income taxes payable | ( | ( | ||||||||||||
Other long-term liabilities | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||
Capital expenditures | ( | ( | ||||||||||||
Purchases of intangible assets | ( | ( | ||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||
Repayment of Term Loan | ( | ( | ||||||||||||
Debt issuance fees | ( | |||||||||||||
Share-Based Award Payments | ( | |||||||||||||
Proceeds from exercise of stock options | ||||||||||||||
Proceeds from issuance of common stock under employee stock purchase program | ||||||||||||||
Taxes paid related to net share settlement of equity awards | ( | ( | ||||||||||||
Repurchase of common stock for retirement | ( | ( | ||||||||||||
Dividends paid | ( | |||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | ( | |||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | ||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | $ | ||||||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||||||||
Cash paid for interest | $ | $ | ||||||||||||
Cash paid for income taxes | $ | $ | ||||||||||||
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES: | ||||||||||||||
Non-cash issuance of common shares | $ | $ | ||||||||||||
Change in capital expenditures in accounts payable and accrued liabilities | $ | $ | ||||||||||||
Right-of-use assets obtained in exchange for new operating leases | $ | $ |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||||||
Merchandise division sales | ||||||||||||||||||||||||||
Outdoors | $ | $ | $ | $ | ||||||||||||||||||||||
Sports and recreation | ||||||||||||||||||||||||||
Apparel | ||||||||||||||||||||||||||
Footwear | ||||||||||||||||||||||||||
Total merchandise sales (1) | ||||||||||||||||||||||||||
Other sales (2) | ||||||||||||||||||||||||||
Net Sales | $ | $ | $ | $ |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||||||
Gift card liability, beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Issued | ||||||||||||||||||||||||||
Redeemed | ( | ( | ( | ( | ||||||||||||||||||||||
Recognized as breakage income | ( | ( | ( | ( | ||||||||||||||||||||||
Gift card liability, ending balance | $ | $ | $ | $ |
October 29, 2022 | January 29, 2022 | October 30, 2021 | ||||||||||||||||||
ABL Facility, due November 2025 | $ | $ | $ | |||||||||||||||||
Term Loan, due November 2027 | ||||||||||||||||||||
Notes, due November 2027 | ||||||||||||||||||||
Total debt | ||||||||||||||||||||
Less current maturities | ( | ( | ( | |||||||||||||||||
Less unamortized discount on Term Loan | ( | ( | ( | |||||||||||||||||
Less deferred loan costs (1) | ( | ( | ( | |||||||||||||||||
Long-term debt, net | $ | $ | $ |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||||||
Accumulated Other Comprehensive Loss, beginning | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Increase to interest expense (net of tax impact of $ | ||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss, ending | $ | $ | ( | $ | $ | ( |
October 29, 2022 | January 29, 2022 | October 30, 2021 | ||||||||||||||||||
Leasehold improvements | $ | $ | $ | |||||||||||||||||
Equipment and software | ||||||||||||||||||||
Furniture and fixtures | ||||||||||||||||||||
Construction in progress | ||||||||||||||||||||
Land | ||||||||||||||||||||
Total property and equipment | ||||||||||||||||||||
Accumulated depreciation and amortization | ( | ( | ( | |||||||||||||||||
Property and equipment, net | $ | $ | $ |
October 29, 2022 | January 29, 2022 | October 30, 2021 | ||||||||||||||||||
Accrued interest | $ | $ | $ | |||||||||||||||||
Accrued personnel costs | ||||||||||||||||||||
Accrued professional fees | ||||||||||||||||||||
Accrued sales and use tax | ||||||||||||||||||||
Accrued self-insurance | ||||||||||||||||||||
Deferred revenue - gift cards and other | ||||||||||||||||||||
Income taxes payable | ||||||||||||||||||||
Property taxes | ||||||||||||||||||||
Sales return allowance | ||||||||||||||||||||
Other | ||||||||||||||||||||
Accrued expenses and other current liabilities | $ | $ | $ |
Expected life in years | ||||||||
Expected volatility | ||||||||
Weighted-average volatility | % | |||||||
Risk-free interest rate | ||||||||
Dividend yield | % |
Service Options | Service Restricted Stock Units | Performance Restricted Stock Units | ||||||||||||||||||
Number of shares | ||||||||||||||||||||
Weighted average grant date fair value per Award | $ | $ | $ | |||||||||||||||||
Weighted average exercise price per Award | $ | N/A | N/A |
Service Options | Service Restricted Stock Units | Performance Restricted Stock Units | ||||||||||||||||||
Remaining expense | $ | $ | $ | |||||||||||||||||
Weighted average life remaining in years |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding - basic | |||||||||||||||||||||||
Dilutive effect of Service Restricted Units and Service Restricted Stock Units | |||||||||||||||||||||||
Dilutive effect of Performance Restricted Stock Units and Liquidity Event Restricted Units | |||||||||||||||||||||||
Dilutive effect of Service Options | |||||||||||||||||||||||
Dilutive effect of Performance Unit Options and Performance Stock Options | |||||||||||||||||||||||
Dilutive effect of ESPP Shares | |||||||||||||||||||||||
Weighted average common shares outstanding - diluted | |||||||||||||||||||||||
Earnings per common share - basic | $ | $ | $ | $ | |||||||||||||||||||
Earnings per common share - diluted | $ | $ | $ | $ | |||||||||||||||||||
Anti-dilutive stock-based awards excluded from diluted calculation |
Thirty-Nine Weeks Ended | ||||||||||||||
October 29, 2022 | October 30, 2021 | |||||||||||||
Beginning stores | 259 | 259 | ||||||||||||
Q1 new stores | 1 | — | ||||||||||||
Q2 new stores | 1 | — | ||||||||||||
Q3 new stores | 4 | — | ||||||||||||
Closed | — | — | ||||||||||||
Ending stores | 265 | 259 | ||||||||||||
Relocated stores | — | 1 | ||||||||||||
Thirteen Weeks Ended | Change | |||||||||||||||||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | Dollars | Percent | |||||||||||||||||||||||||||||||||||
Net sales | $ | 1,493,925 | 100.0 | % | $ | 1,592,795 | 100.0 | % | $ | (98,870) | (6.2) | % | ||||||||||||||||||||||||||
Cost of goods sold | 971,454 | 65.0 | % | 1,031,957 | 64.8 | % | (60,503) | (5.9) | % | |||||||||||||||||||||||||||||
Gross margin | 522,471 | 35.0 | % | 560,838 | 35.2 | % | (38,367) | (6.8) | % | |||||||||||||||||||||||||||||
Selling, general and administrative expenses | 342,949 | 23.0 | % | 344,725 | 21.6 | % | (1,776) | (0.5) | % | |||||||||||||||||||||||||||||
Operating income | 179,522 | 12.0 | % | 216,113 | 13.6 | % | (36,591) | (16.9) | % | |||||||||||||||||||||||||||||
Interest expense, net | 12,163 | 0.8 | % | 11,424 | 0.7 | % | 739 | 6.5 | % | |||||||||||||||||||||||||||||
Other (income), net | (2,538) | (0.2) | % | (614) | (0.0) | % | (1,924) | NM | ||||||||||||||||||||||||||||||
Income before income taxes | 169,897 | 11.4 | % | 205,303 | 12.9 | % | (35,406) | (17.2) | % | |||||||||||||||||||||||||||||
Income tax expense | 38,156 | 2.6 | % | 43,998 | 2.8 | % | (5,842) | (13.3) | % | |||||||||||||||||||||||||||||
Net income | $ | 131,741 | 8.8 | % | $ | 161,305 | 10.1 | % | $ | (29,564) | (18.3) | % |
Thirty-Nine Weeks Ended | Change | |||||||||||||||||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | Dollars | Percent | |||||||||||||||||||||||||||||||||||
Net sales | $ | 4,648,570 | 100.0 | % | $ | 4,964,658 | 100.0 | % | $ | (316,088) | (6.4) | % | ||||||||||||||||||||||||||
Cost of goods sold | 3,008,612 | 64.7 | % | 3,197,623 | 64.4 | % | (189,011) | (5.9) | % | |||||||||||||||||||||||||||||
Gross margin | 1,639,958 | 35.3 | % | 1,767,035 | 35.6 | % | (127,077) | (7.2) | % | |||||||||||||||||||||||||||||
Selling, general and administrative expenses | 998,209 | 21.5 | % | 1,057,290 | 21.3 | % | (59,081) | (5.6) | % | |||||||||||||||||||||||||||||
Operating income | 641,749 | 13.8 | % | 709,745 | 14.3 | % | (67,996) | (9.6) | % | |||||||||||||||||||||||||||||
Interest expense, net | 34,240 | 0.7 | % | 38,130 | 0.8 | % | (3,890) | (10.2) | % | |||||||||||||||||||||||||||||
Loss on early retirement of debt | — | — | % | 2,239 | 0.0 | % | (2,239) | (100.0) | % | |||||||||||||||||||||||||||||
Other (income), net | (4,676) | (0.1) | % | (1,746) | (0.0) | % | (2,930) | 167.8 | % | |||||||||||||||||||||||||||||
Income before income taxes | 612,185 | 13.2 | % | 671,122 | 13.5 | % | (58,937) | (8.8) | % | |||||||||||||||||||||||||||||
Income tax expense | 141,837 | 3.1 | % | 141,511 | 2.9 | % | 326 | 0.2 | % | |||||||||||||||||||||||||||||
Net income | $ | 470,348 | 10.1 | % | $ | 529,611 | 10.7 | % | $ | (59,263) | (11.2) | % |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | ||||||||||||||||||||||||||
Net income | $ | 131,741 | $ | 161,305 | $ | 470,348 | $ | 529,611 | |||||||||||||||||||||
Interest expense, net | 12,163 | 11,424 | 34,240 | 38,130 | |||||||||||||||||||||||||
Income tax expense | 38,156 | 43,998 | 141,837 | 141,511 | |||||||||||||||||||||||||
Depreciation and amortization | 27,000 | 26,459 | 78,852 | 77,767 | |||||||||||||||||||||||||
Equity compensation (a) | 5,829 | 2,921 | 15,486 | 36,126 | |||||||||||||||||||||||||
Loss on early retirement of debt | — | — | — | 2,239 | |||||||||||||||||||||||||
Pre-opening expenses (b) | 2,115 | — | 4,941 | — | |||||||||||||||||||||||||
Payroll taxes associated with the 2021 Vesting Event (c) | — | — | — | 15,418 | |||||||||||||||||||||||||
Other (d) | — | 595 | — | 1,309 | |||||||||||||||||||||||||
Adjusted EBITDA | $ | 217,004 | $ | 246,702 | $ | 745,704 | $ | 842,111 | |||||||||||||||||||||
Less: Depreciation and amortization | (27,000) | (26,459) | (78,852) | (77,767) | |||||||||||||||||||||||||
Adjusted EBIT | $ | 190,004 | $ | 220,243 | $ | 666,852 | $ | 764,344 | |||||||||||||||||||||
(a) | Represents non-cash charges related to equity-based compensation, which vary from period to period depending on certain factors such as the 2021 Vesting Event, timing and valuation of awards, achievement of performance targets and equity award forfeitures. | ||||||||||||||||||||||||||||
(b) | Represents pre-opening expenses, which are non-capital expenditures associated with opening new stores and incurred prior to the store opening and generating sales. These costs consist primarily of occupancy costs, marketing, payroll and recruiting costs. These costs are expensed as incurred. | ||||||||||||||||||||||||||||
(c) | Represents cash expenses related to taxes on equity-based compensation resulting from the 2021 Vesting Event. | ||||||||||||||||||||||||||||
(d) | Other adjustments include (representing deductions or additions to Adjusted EBITDA and Adjusted EBIT) amounts that management believes are not representative of our operating performance, such as costs associated with secondary offerings, installation costs for energy savings associated with our profitability initiatives and other costs associated with business optimization initiatives. |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | ||||||||||||||||||||||||||
Net income | $ | 131,741 | $ | 161,305 | $ | 470,348 | $ | 529,611 | |||||||||||||||||||||
Equity compensation (a) | 5,829 | 2,921 | 15,486 | 36,126 | |||||||||||||||||||||||||
Loss on early retirement of debt | — | — | — | 2,239 | |||||||||||||||||||||||||
Pre-opening expenses (b) | 2,115 | — | 4,941 | — | |||||||||||||||||||||||||
Payroll taxes associated with the 2021 Vesting Event (c) | — | — | — | 15,418 | |||||||||||||||||||||||||
Other (d) | — | 595 | — | 1,309 | |||||||||||||||||||||||||
Tax effects of these adjustments (e) | (1,808) | (686) | (4,735) | (13,487) | |||||||||||||||||||||||||
Adjusted Net Income | $ | 137,877 | $ | 164,135 | $ | 486,040 | $ | 571,216 | |||||||||||||||||||||
Adjusted Earnings per Share: | |||||||||||||||||||||||||||||
Basic | $ | 1.74 | $ | 1.80 | $ | 5.86 | $ | 6.21 | |||||||||||||||||||||
Diluted | $ | 1.69 | $ | 1.75 | $ | 5.72 | $ | 5.98 | |||||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||||||||
Basic | 79,085 | 91,140 | 82,901 | 91,951 | |||||||||||||||||||||||||
Diluted | 81,379 | 93,844 | 84,910 | 95,504 | |||||||||||||||||||||||||
(a) | Represents non-cash charges related to equity-based compensation, which vary from period to period depending on certain factors such as the 2021 Vesting Event, timing and valuation of awards, achievement of performance targets and equity award forfeitures. | ||||||||||||||||||||||||||||
(b) | Represents pre-opening expenses, which are non-capital expenditures associated with opening new stores and incurred prior to the store opening and generating sales. These costs consist primarily of occupancy costs, marketing, payroll and recruiting costs. These costs are expensed as incurred. | ||||||||||||||||||||||||||||
(c) | Represents cash expenses related to taxes on equity-based compensation resulting from the 2021 Vesting Event. | ||||||||||||||||||||||||||||
(d) | Other adjustments include (representing deductions or additions to Adjusted Net Income) amounts that management believes are not representative of our operating performance, such as costs associated with secondary offerings, installation costs for energy savings associated with our profitability initiatives and other costs associated with business optimization initiatives. | ||||||||||||||||||||||||||||
(e) | For the thirteen and thirty-nine weeks ended October 29, 2022 and October 30, 2021, this represents the estimated tax effect (by using the projected full year tax rates for the respective years) of the total adjustments made to arrive at Adjusted Net Income. |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||||||||||||||
October 29, 2022 | October 30, 2021 | October 29, 2022 | October 30, 2021 | |||||||||||||||||||||||
Net cash provided by operating activities | $ | 50,763 | $ | 109,389 | $ | 309,169 | $ | 515,063 | ||||||||||||||||||
Net cash used in investing activities | (31,677) | (24,944) | (79,811) | (58,711) | ||||||||||||||||||||||
Adjusted Free Cash Flow | $ | 19,086 | $ | 84,445 | $ | 229,358 | $ | 456,352 |
2022 | 2023 | 2024 | 2025 | 2026 | After 2026 | Total | |||||||||||||||||
Term Loan and related interest (1) | $ | 6,729 | $ | 28,966 | $ | 26,298 | $ | 24,732 | $ | 23,876 | $ | 299,931 | $ | 410,532 | |||||||||
Notes and related interest (2) | 12,000 | 24,000 | 24,000 | 24,000 | 24,000 | 424,000 | 532,000 | ||||||||||||||||
ABL Facility and related interest (3) | 625 | 2,500 | 2,500 | 1,909 | — | — | 7,534 | ||||||||||||||||
(1) Interest payments do not include amortization of discount and debt issuance costs and are approximated based on projected interest rates and assume no unscheduled principal payments. | |||||||||||||||||||||||
(2) Assumes Notes are paid in full at maturity date. | |||||||||||||||||||||||
(3) Assumes a minimum revolving credit commitment of $1.0 billion and assumes no balances drawn on our ABL Facility. |
Thirty-Nine Weeks Ended | ||||||||||||||
October 29, 2022 | October 30, 2021 | |||||||||||||
Average funds drawn | $ | — | $ | — | ||||||||||
Number of days with outstanding balance | — | — | ||||||||||||
Maximum daily amount outstanding | $ | — | $ | — | ||||||||||
Minimum available borrowing capacity | $ | 954,516 | $ | 780,945 |
October 29, 2022 | January 29, 2022 | October 30, 2021 | ||||||||||||||||||
Outstanding borrowings | $ | — | $ | — | $ | — | ||||||||||||||
Issued letters of credit | $ | 17,378 | $ | 17,828 | $ | 17,828 | ||||||||||||||
Available borrowing capacity | $ | 982,622 | $ | 874,831 | $ | 982,172 |
2022 | 2023 | 2024 | 2025 | 2026 | After 2026 | Total | |||||||||||||||||
Operating lease payments (1) (2) | $ | 51,702 | $ | 205,789 | $ | 197,797 | $ | 191,262 | $ | 183,330 | $ | 1,003,824 | $ | 1,833,704 | |||||||||
(1) Minimum lease payments have not been reduced by sublease rentals of $0.6 million due in the future under non-cancelable sub-leases. | |||||||||||||||||||||||
(2) These balances include stores where we have an executed contract but have not taken possession of the location as of October 29, 2022. |
Total Number of Shares Purchased | Average Price Paid per Share | Total Amount Repurchased | ||||||||||||||||||
First Quarter (January 31, 2021 to May 1, 2021) | — | $ | — | $ | — | |||||||||||||||
Second Quarter (May 2, 2021 to July 31, 2021) (1) | 3,229,974 | 30.96 | 99,999,995 | |||||||||||||||||
Third Quarter (August 1, 2021 to October 30, 2021) | 5,722,892 | 42.96 | 245,837,186 | |||||||||||||||||
Fourth Quarter (October 31, 2021 to January 29, 2022) | 1,613,930 | 40.63 | 65,571,394 | |||||||||||||||||
Total Shares Repurchased | 10,566,796 | $ | 38.93 | $ | 411,408,575 | |||||||||||||||
(1) Shares repurchased during the 2021 second quarter were not subject to the Share Repurchase Programs. |
Total Number of Shares Purchased | Average Price Paid per Share | Total Amount Repurchased | ||||||||||||||||||
First Quarter (January 30, 2022 to April 30, 2022) | 2,272,349 | $ | 38.95 | $ | 88,500,881 | |||||||||||||||
Second Quarter (May 1, 2022 to July 30, 2022) | 5,550,892 | 36.05 | 200,110,996 | |||||||||||||||||
Third Quarter (July 31, 2022 to October 29, 2022) (1) | 2,176,463 | 46.33 | 100,824,712 | |||||||||||||||||
Total Shares Repurchased | 9,999,704 | $ | 38.94 | $ | 389,436,589 | |||||||||||||||
(1) See Part II, Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds for further detail on the 2022 third quarter share repurchases. |
Dividend per Share | Total Dividends Paid | Stockholder Date of Record | ||||||||||||||||||
First Quarter (January 30, 2022 to April 30, 2022) | $ | 0.075 | $ | 6,536 | March 17, 2022 | |||||||||||||||
Second Quarter (May 1, 2022 to July 30, 2022) | $ | 0.075 | 6,271 | June 16, 2022 | ||||||||||||||||
Third Quarter (July 31, 2022 to October 29, 2022) | $ | 0.075 | $ | 5,974 | September 15, 2022 | |||||||||||||||
Total Dividends Paid | $ | 18,781 |
Thirty-Nine Weeks Ended | ||||||||||||||
October 29, 2022 | October 30, 2021 | |||||||||||||
Net cash provided by operating activities | $ | 309,169 | $ | 515,063 | ||||||||||
Net cash used in investing activities | (79,811) | (58,711) | ||||||||||||
Net cash used in financing activities | (397,189) | (432,659) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | $ | (167,831) | $ | 23,693 |
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) | Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (b) | ||||||||||||||||||||||
July 31, 2022 to August 27, 2022 | — | $ | — | — | $ | 500,192,744 | ||||||||||||||||||||
August 28, 2022 to October 1, 2022 | 1,672,091 | $ | 46.92 | 1,672,091 | $ | 421,768,212 | ||||||||||||||||||||
October 2, 2022 to October 29, 2022 | 504,372 | $ | 44.35 | 504,372 | $ | 399,411,562 | ||||||||||||||||||||
Total | 2,176,463 | $ | 46.33 | 2,176,463 | $ | 399,411,562 |
Exhibit Number | Description of Exhibit | ||||
Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on October 6, 2020). | |||||
Amended and Restated Bylaws of the Registrant effective as of December 6, 2022. | |||||
Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002. | |||||
Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002. | |||||
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||
101.INS | XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
101.SCH | XBRL Taxonomy Extension Schema Document | ||||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | ||||
101.DEF | XBRL Taxonomy Definition Linkbase Document | ||||
101.LAB | XBRL Taxonomy Label Linkbase Document | ||||
101.PRE | XBRL Taxonomy Presentation Linkbase Document | ||||
* | Filed herewith | ||||
** | Furnished herewith | ||||
† | Compensatory agreements for director(s) and/or executive officer(s). |
ACADEMY SPORTS AND OUTDOORS, INC. | ||
By: | /s/ | KEN C. HICKS | ||||||
Ken C. Hicks | ||||||||
Chairman, President and Chief Executive Officer | ||||||||
(principal executive officer) | ||||||||
By: | /s/ | MICHAEL P. MULLICAN | ||||||
Michael P. Mullican | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
(principal financial officer) | ||||||||
/s/ | KEN C. HICKS | Date: | December 7, 2022 | ||||||||
Ken C. Hicks | |||||||||||
Chairman, President and Chief Executive Officer | |||||||||||
(principal executive officer) |
/s/ | MICHAEL P. MULLICAN | Date: | December 7, 2022 | ||||||||
Michael P. Mullican | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
(principal financial officer) |
/s/ | KEN C. HICKS | Date: | December 7, 2022 | ||||||||
Ken C. Hicks | |||||||||||
Chairman, President and Chief Executive Officer | |||||||||||
(principal executive officer) |
/s/ | MICHAEL P. MULLICAN | Date: | December 7, 2022 | ||||||||
Michael P. Mullican | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
(principal financial officer) |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Oct. 29, 2022 |
Jan. 29, 2022 |
Oct. 30, 2021 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts | $ 1,449 | $ 732 | $ 1,139 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 300,000,000 | 300,000,000 | 300,000,000 |
Common stock, issued (in shares) | 77,959,530 | 87,079,394 | 88,164,878 |
Common stock, outstanding (in shares) | 77,959,530 | 87,079,394 | 88,164,878 |
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
|
Income Statement [Abstract] | ||||
NET SALES | $ 1,493,925 | $ 1,592,795 | $ 4,648,570 | $ 4,964,658 |
COST OF GOODS SOLD | 971,454 | 1,031,957 | 3,008,612 | 3,197,623 |
GROSS MARGIN | 522,471 | 560,838 | 1,639,958 | 1,767,035 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 342,949 | 344,725 | 998,209 | 1,057,290 |
OPERATING INCOME | 179,522 | 216,113 | 641,749 | 709,745 |
INTEREST EXPENSE, NET | 12,163 | 11,424 | 34,240 | 38,130 |
LOSS ON EARLY RETIREMENT OF DEBT | 0 | 0 | 0 | 2,239 |
OTHER (INCOME), NET | (2,538) | (614) | (4,676) | (1,746) |
INCOME BEFORE INCOME TAXES | 169,897 | 205,303 | 612,185 | 671,122 |
INCOME TAX EXPENSE | 38,156 | 43,998 | 141,837 | 141,511 |
NET INCOME | $ 131,741 | $ 161,305 | $ 470,348 | $ 529,611 |
EARNINGS PER COMMON SHARE: | ||||
BASIC (in dollars per share) | $ 1.67 | $ 1.77 | $ 5.67 | $ 5.76 |
DILUTED (in dollars per share) | $ 1.62 | $ 1.72 | $ 5.54 | $ 5.55 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
BASIC (in shares) | 79,085 | 91,140 | 82,901 | 91,951 |
DILUTED (in shares) | 81,379 | 93,844 | 84,910 | 95,504 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 131,741 | $ 161,305 | $ 470,348 | $ 529,611 |
Recognized interest expense on interest rate swaps | 0 | 489 | 0 | 2,384 |
Tax expense | 0 | (115) | 0 | (548) |
Total comprehensive income | $ 131,741 | $ 161,679 | $ 470,348 | $ 531,447 |
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 29, 2022 |
Jul. 30, 2022 |
Apr. 30, 2022 |
Oct. 30, 2021 |
Jul. 31, 2021 |
May 01, 2021 |
Oct. 30, 2021 |
|
Statement of Stockholders' Equity [Abstract] | |||||||
Cash dividends declared (in dollars per share) | $ 0.075 | $ 0.075 | $ 0.075 | ||||
Recognized interest expense on interest rate swaps, tax | $ 115 | $ 163 | $ 270 | $ 548 |
Nature of Operations |
9 Months Ended |
---|---|
Oct. 29, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations The Company All references to "we," "us," "our" or the "Company" in the financial statements refer to Academy Sports and Outdoors, Inc., a Delaware corporation ("ASO, Inc.") and the current parent holding company of our operations, and its consolidated subsidiaries. We conduct our operations primarily through our parent holding company's indirect subsidiary, Academy, Ltd., a Texas limited partnership doing business as "Academy Sports + Outdoors", or Academy, Ltd. Our fiscal year represents the 52 or 53 weeks ending on the Saturday closest to January 31. On August 3, 2011, an investment entity owned by investment funds and other entities affiliated with Kohlberg Kravis Roberts & Co. L.P. (collectively, "KKR"), acquired a majority interest in the Company. On October 6, 2020, ASO, Inc. completed an initial public offering and as of September 17, 2021, KKR no longer held an ownership interest in the Company. The Company is one of the leading full-line sporting goods and outdoor recreational products retailers in the United States in terms of net sales. As of October 29, 2022, we operated 265 "Academy Sports + Outdoors" retail locations in 17 states and three distribution centers located in Katy, Texas, Twiggs County, Georgia and Cookeville, Tennessee. We also sell merchandise to customers across most of the United States via our academy.com website. Secondary Offering On January 27, 2021, ASO, Inc. entered into an Underwriting Agreement (the “Underwriting Agreement”), by and among ASO, Inc., Allstar LLC, Allstar Co-Invest Blocker L.P., KKR 2006 Allstar Blocker L.P., MSI 2011 LLC, MG Family Limited Partnership and the former management selling stockholder named therein (collectively, the “Selling Stockholders”), and Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC, as representatives of the several underwriters named therein (the “Underwriters”), relating to an underwritten offering of 12,000,000 shares of common stock (the “Secondary Offering”), pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-252390), filed on January 25, 2021. The Selling Stockholders granted the Underwriters the option to purchase, within 30 days from the date of the Underwriting Agreement, an additional 1,800,000 shares of common stock. On January 29, 2021, the Underwriters exercised in full their option to purchase the additional shares. The Secondary Offering was completed on February 1, 2021. Pursuant to the Underwriting Agreement, the Underwriters purchased the shares from the Selling Stockholders at a price of approximately $20.69 per share. The Company did not receive any proceeds from the Secondary Offering. May 2021 Secondary Offering and Stock Repurchase On May 5, 2021, ASO, Inc. entered into an underwriting agreement (the “May 2021 Underwriting Agreement”), by and among ASO, Inc., Allstar LLC, Allstar Co-Invest Blocker L.P., KKR 2006 Allstar Blocker L.P., MSI 2011 LLC and MG Family Limited Partnership (collectively, the “May 2021 Selling Stockholders”), and Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC, as representatives of the several underwriters named therein (the “May 2021 Underwriters”), relating to an underwritten offering of 14,000,000 shares of Common Stock at $30.96 per share (the “May 2021 Secondary Offering”), pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-255720), filed on May 3, 2021. The May 2021 Selling Stockholders granted the May 2021 Underwriters the option to purchase, within 30 days from the date of the May 2021 Underwriting Agreement, an additional 2,100,000 shares of Common Stock. On May 6, 2021, the May 2021 Underwriters exercised in full their option to purchase the additional shares. The May 2021 Secondary Offering also included the Company's repurchase and simultaneous retirement of 3,229,974 shares out of the 14,000,000 shares at $30.96 per share, the same price granted to the underwriters, which was at a discount to the prevailing market price at the time of repurchase (see "Share Repurchases" in Note 2). The May 2021 Secondary Offering was completed on May 10, 2021. The Company did not receive any proceeds from the May 2021 Secondary Offering. The May 2021 Secondary Offering reduced the KKR ownership interest in the Company, resulting in a vesting event (the "2021 Vesting Event") for awards granted under the 2011 Unit Incentive Plan, whereby unvested time awards and performance-based awards which had previously met their performance targets vested and unvested performance-based awards which had not previously met their performance targets were forfeited. As a result, we incurred approximately $24.9 million in non-cash expenses related to equity-based compensation and approximately $15.4 million of cash expenses related to taxes on equity-based compensation. Additionally, approximately $8.2 million of Share-Based Award Payments (see Note 9) for equity-based compensation distributions were accelerated during the 2021 second quarter. September 2021 Secondary Offering and Stock Repurchase On September 14, 2021, ASO, Inc. entered into an underwriting agreement (the “September 2021 Underwriting Agreement”), by and among ASO, Inc., Allstar LLC, Allstar Co-Invest Blocker L.P. and KKR 2006 Allstar Blocker L.P. (collectively, the “September 2021 Selling Stockholders”), and Credit Suisse Securities (USA) LLC, as representative of the several underwriters named therein (the “September 2021 Underwriters”), relating to an underwritten offering (the “September 2021 Secondary Offering”) of 18,645,602 shares of common stock at approximately $43.52 per share, pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-259477), filed on September 13, 2021. The September 2021 Secondary Offering also included the Company’s repurchase and simultaneous retirement of 4,500,000 shares out of the 18,645,602 shares of common stock at approximately $43.52, the same price granted to the September 2021 Underwriters, which was at a discount to the prevailing market price at the time of repurchase (see "Share Repurchases" in Note 2). The September 2021 Secondary Offering was completed on September 17, 2021. The Company did not receive any proceeds from the September 2021 Secondary Offering.
|
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Oct. 29, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The accompanying unaudited financial statements of the Company have been prepared as though they were required to be in accordance with Rule 10-01 of Regulation S-X for interim financial statements, however, they do not include all information and footnotes required by United States generally accepted accounting principles ("GAAP") for complete financial statements. Certain information and footnote disclosures normally included in our annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. However, we believe that the disclosures included herein are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2022, as filed with the Securities and Exchange Commission on March 29, 2022 (the "Annual Report"). The information furnished herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results of operations for the thirteen and thirty-nine weeks ended October 29, 2022 are not necessarily indicative of the results that will be realized for the fiscal year ending January 28, 2023 or any other period. The balance sheet as of January 29, 2022 has been derived from our audited financial statements as of that date. For further information, refer to our audited financial statements and notes thereto included in the Annual Report. Basis of Presentation and Principles of Consolidation These unaudited condensed consolidated financial statements include the accounts of ASO, Inc. and its subsidiaries, New Academy Holding Company, LLC ("NAHC"), Academy Managing Co., LLC, Associated Investors, LLC, Academy, Ltd., the Company's operating company, and Academy International Limited. NAHC, Academy Managing Co., LLC, and Associated Investors, LLC are intermediate holding companies. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Our management bases its estimates on historical experience and other assumptions it believes to be reasonable under the circumstances. Actual results could differ significantly from those estimates. Our most significant estimates and assumptions that materially affect the financial statements involve difficult, subjective or complex judgments by management, including the valuation of merchandise inventories and performing goodwill, intangible and long-lived asset impairment analyses. Given the global economic climate and the possibility of additional unforeseen effects from the COVID-19 pandemic, these estimates remain challenging, and actual results could differ materially from our estimates. Share Repurchases On September 2, 2021, the Board of Directors of the Company authorized a share repurchase program (the "2021 Share Repurchase Program") under which the Company may purchase up to $500 million of its outstanding shares during the three-year period ending September 2, 2024. On June 2, 2022, the Board of Directors of the Company authorized a new share repurchase program (the "2022 Share Repurchase Program") under which the Company may purchase up to $600 million of its outstanding shares during the three-year period ending June 2, 2025. The 2022 Share Repurchase Program and the 2021 Share Repurchase program are collectively referred to as the "Share Repurchase Programs". Under the Share Repurchase Programs, repurchases can be made using a variety of methods, which may include open market purchases, block trades, privately negotiated transactions, accelerated share repurchase programs and/or a non-discretionary trading plan, all in compliance with the rules of the SEC and other applicable legal requirements. The timing, manner, price and amount of any common share repurchases under the Share Repurchase Programs are determined by the Company in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. The Share Repurchase Programs do not obligate the Company to acquire any particular number of common shares, and the programs may be suspended, extended, modified or discontinued at any time. During the thirteen and thirty-nine weeks ended October 29, 2022, we repurchased and concurrently retired 2,176,463 and 9,999,704 shares of ASO, Inc. common stock for an aggregate amount of $100.8 million and $389.4 million, respectively, pursuant to the Share Repurchase Programs. During the thirteen and thirty-nine weeks ended October 30, 2021, we repurchased and concurrently retired 5,722,892 and 8,952,866 shares of ASO, Inc. common stock for an aggregate amount of $245.8 million and $345.8 million, respectively, which includes purchases that were made pursuant to the Share Repurchase Programs and those that were made prior to the Share Repurchase Programs. As of October 29, 2022, we no longer had availability under the 2021 Share Repurchase Program and we had approximately $399.4 million available for share repurchases pursuant to the 2022 Share Repurchase Program. Recent Accounting Pronouncements Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the expedients and exceptions provided by this amendment as it relates to our transition from LIBOR to another reference rate to determine the impact. Supplier Finance Programs In September 2022, the FASB issued ASU 2022-04, "Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations." This pronouncement requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of the financial statements to understand the program's nature, activity during the period, changes from period to period and potential magnitude. The adoption of these amendments is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except the amendment on roll-forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this accounting standard will have on its financial disclosures.
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Net Sales |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales | Net Sales Revenue from merchandise sales is recognized, net of sales tax, when the Company’s performance obligation to the customer is met, which is when the Company transfers control of the merchandise to the customer. Store merchandise sales are recognized at the point of sale and e-commerce sales are recognized upon delivery to the customer. The following table sets forth the approximate amount of sales by merchandise divisions for the periods presented (amounts in thousands):
(1) E-commerce sales consisted of 9.5% and 9.7% of merchandise sales for the thirteen and thirty-nine weeks ended October 29, 2022, respectively, and 8.0% for the thirteen and thirty-nine weeks and October 30, 2021. (2) Other sales consisted primarily of the sales return allowance, gift card breakage income, credit card bounties and royalties, shipping income, net hunting and fishing license income and other items. We sell gift cards in stores, online and in third-party retail locations. A liability for gift cards, which is recorded in accrued expenses and other liabilities on our consolidated balance sheets is established at the time of sale and revenues are recognized as the gift cards are redeemed in stores or on our website. The following is a reconciliation of the gift card liability (amounts in thousands):
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Long-Term Debt |
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Long-Term Debt | Long-Term Debt Our debt consisted of the following (amounts in thousands) as of:
(1) Deferred loan costs are related to the Term Loan and Notes. As of October 29, 2022, January 29, 2022 and October 30, 2021, the balance in deferred loan costs related to the ABL Facility (as defined below) was approximately $3.5 million, $4.3 million and $4.6 million, respectively, and was included in other noncurrent assets on our consolidated balance sheets. Total amortization of deferred loan costs was $0.7 million and $2.0 million for the thirteen and thirty-nine weeks ended October 29, 2022, respectively, and $0.6 million and $2.0 million for the thirteen and thirty-nine weeks ended October 30, 2021, respectively. Total expenses related to accretion of original issuance discount were $0.1 million and $0.3 million for the thirteen and thirty-nine weeks ended October 29, 2022, respectively, and $0.1 million and $0.4 million for the thirteen and thirty-nine weeks ended and October 30, 2021, respectively. The expenses related to amortization of deferred loan costs and accretion of original issuance discount are included in interest expense, net on the consolidated statements of income. Term Loan We refer to the 2020 Term Loan and the Amendment collectively as the "Term Loan". On November 6, 2020, Academy, Ltd. entered into a seven-year $400.0 million senior secured term loan (the "2020 Term Loan") with Credit Suisse AG, Cayman Island Branch ("Credit Suisse"), as the administrative agent and collateral agent and the several other lenders and parties. The 2020 Term Loan will mature on November 6, 2027. The 2020 Term Loan bore interest, at Academy, Ltd.’s election, at either (1) LIBOR rate with a floor of 0.75%, plus a margin of 5.00%, or (2) a base rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) Credit Suisse’s "prime rate", or (c) the one-month LIBOR rate plus 1.00%, plus a margin of 4.00%. Quarterly principal payments of approximately $1.0 million were required through September 30, 2027, with the balance due in full on the maturity date of November 6, 2027. On May 25, 2021, Academy, Ltd. entered into Amendment No. 4 (the “Amendment”) to the Second Amended and Restated Credit Agreement, dated as of November 6, 2020, among Academy, Ltd., as Borrower, Credit Suisse AG, Cayman Islands Branch, as the administrative agent and collateral agent, the several lenders party thereto and the several other parties named therein (as previously amended, the “Existing Credit Agreement” and as amended by the Amendment, the “Amended Credit Agreement”). Pursuant to the terms of the Amendment, Academy, Ltd. (i) reduced the applicable margin on LIBOR borrowings under the Existing Credit Agreement from 5.00% to 3.75% and (ii) utilized cash on hand to repay $99.0 million of outstanding borrowings under the Existing Credit Agreement, leaving an outstanding principal balance of $300.0 million under the Amended Credit Agreement. Quarterly principal payments of $750.0 thousand are required through September 30, 2027 and borrowings under the Amended Credit Agreement will continue to mature on November 6, 2027. All other material terms and provisions of the 2020 Term Loan remain substantially the same as the terms and provisions in place immediately prior to the effectiveness of the Amendment. As of October 29, 2022, the weighted average interest rate was 6.88%, with interest payable monthly. The terms and conditions of the Amendment also require that the outstanding balance under the Term Loan is prepaid under certain circumstances. As of October 29, 2022, no prepayment was due under the terms and conditions of the Term Loan. In connection with the Amendment, the Company recognized a non-cash loss on early retirement of debt of $2.2 million in the thirty-nine weeks ended October 30, 2021 from the write-off of deferred loan costs and expense related to the original issuance discount associated with our 2020 Term Loan. Notes On November 6, 2020, Academy, Ltd. issued $400.0 million of 6.00% senior secured notes which are due November 15, 2027 (the "Notes"), pursuant to an indenture, dated as of November 6, 2020 (the "Indenture") with The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent. The Notes require cash interest payments semi-annually in arrears on May 15 and November 15 of each year at a rate of 6.00% per year. ABL Facility On November 6, 2020, Academy, Ltd., as borrower, and the guarantors, amended the previously existing secured asset-based revolving credit facility by entering into an amendment to the First Amended and Restated ABL Credit Agreement, dated as of July 2, 2015, with JPMorgan Chase Bank, N.A. as the administrative agent and collateral agent, letter of credit issuer and swingline lender and the several lenders party thereto, which ABL amendment, among other things, extended the maturity of Academy, Ltd.’s asset-based revolving credit facility thereunder to November 6, 2025 (the "ABL Facility"). The ABL Facility is used to provide financing for working capital and other general corporate purposes, as well as to support certain letters of credit requirements, and availability is subject to customary borrowing base and availability provisions. During the normal course of business, we periodically utilize letters of credit primarily for the purchase of import goods and in support of insurance contracts. As of October 29, 2022, we had outstanding letters of credit of approximately $17.4 million, all of which were issued under the ABL Facility, and we had no borrowings outstanding under the ABL Facility, leaving the available borrowing capacity under the ABL Facility of $982.6 million. Borrowings under the ABL Facility bear interest, at our election, at either (1) LIBOR plus a margin of 1.25% to 1.75%, or (2) a base rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) JPMorgan Chase Bank, N.A.'s "prime rate", or (c) the one-month LIBOR rate plus 1.00%, plus a margin of 0.25% to 0.75%. The ABL Facility also provides a fee applicable to the unused commitments of 0.25%. The terms and conditions of the ABL Facility also require that we prepay outstanding loans under the ABL Facility under certain circumstances. As of October 29, 2022, no future prepayments of outstanding loans have been triggered under the terms and conditions of the ABL Facility. Covenants. The ABL Facility, Term Loan and Notes agreements contain covenants, including, among other things, covenants that restrict Academy, Ltd.'s ability to incur certain additional indebtedness, create or permit liens on assets, engage in mergers or consolidations, pay dividends, make other restricted payments, make loans or advances, engage in transactions with affiliates or amend material documents. Additionally, at certain times, the ABL Facility is subject to a minimum adjusted fixed charge coverage ratio. These covenants are subject to certain qualifications and limitations. We were in compliance with these covenants as of October 29, 2022.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments We have historically used interest rate swap agreements to hedge market risk relating to possible adverse changes in interest rates. All interest rate swaps had been designated as cash flow hedges of variable rate interest payments on borrowings under the Term Loan. As of October 29, 2022, we do not have any derivative financial instruments outstanding. For derivatives which were designated as hedging instruments, amounts included in Accumulated Other Comprehensive Income (Loss) ("AOCI") were reclassified to interest expense in the same period during which the hedged transaction affected earnings, which was as interest expense was recorded on the underlying Term Loan. The impact of gains and losses related to interest rate swaps that were deferred into AOCI and subsequently reclassified into expense are as follows (amounts in thousands):
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Fair Value Measurements |
9 Months Ended |
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Oct. 29, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as an exit price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Authoritative guidance establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of the assets and liabilities. The fair value measurements are classified as either: •Level 1 which represents valuations based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; •Level 2 which represents valuations based on quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and •Level 3 which represents valuations based on prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy in which the fair value measurement is classified in its entirety, is based on the lowest level input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. There were no transfers made into or out of the Level 1, 2 or 3 categories during any period presented. Periodically we make cash investments in money market funds comprised of U.S. Government treasury bills and securities, which are classified as cash and redeemable on demand. As of October 29, 2022, January 29, 2022 and October 30, 2021, we held $264.7 million, $401.0 million and $294.0 million in money market funds, respectively. The fair value of the Term Loan and Notes is estimated using a discounted cash flow analysis based on quoted market prices for the instrument in an inactive market and is therefore classified as Level 2 within the fair value hierarchy. As of October 29, 2022, January 29, 2022, and October 30, 2021 the estimated fair value of the Term Loan and Notes was $0.7 billion. As borrowings on the ABL Facility are generally repaid in less than 12 months, we believe that fair value approximates the carrying value.
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Property and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and Equipment Property and equipment consists of the following (amounts in thousands) as of:
Depreciation expense was $27.0 million and $78.9 million in the thirteen and thirty-nine weeks ended October 29, 2022, respectively, and $26.5 million and $77.8 million in the thirteen and thirty-nine weeks ended October 30, 2021, respectively. These costs are included in selling, general and administrative expenses on the consolidated statements of income.
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Accrued Expenses and Other Current Liabilities |
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Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (amounts in thousands) as of:
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Share-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation On September 29, 2020, the ASO, Inc. Board of Directors adopted the 2020 Omnibus Incentive Plan (the "2020 Omnibus Incentive Plan"), which became effective on October 1, 2020. The 2020 Omnibus Incentive plan provides for the grant of certain equity incentive awards (each, an "Award"), such as options to purchase ASO, Inc. common stock (each, a "Stock Option") and restricted units that may settle in ASO, Inc. common stock (each, a "Restricted Stock Unit") to our directors, executives and eligible employees of the Company. Awards granted under the 2020 Omnibus Incentive Plan consist of Stock Options that vest upon the satisfaction of time-based requirements (each, a "Service Option"), Restricted Stock Units that vest upon the satisfaction of time-based requirements (each, a "Service Restricted Stock Unit") and Restricted Stock Units that vest upon the satisfaction of time and performance and/or market based requirements (each, a "Performance Restricted Stock Unit"). The plan reserved a total of 5,150,000 shares of common stock for issuance. As of October 29, 2022, there were 2,410,059 shares that were authorized and available for future issuance under the 2020 Omnibus Incentive Plan. On September 29, 2020, the ASO, Inc. Board of Directors adopted the 2020 Employee Stock Purchase Plan (the "ESPP"), which became effective on October 1, 2020. We have reserved a total of 2,000,000 shares under the ESPP and as of October 29, 2022, there were 1,792,945 shares authorized and available for future issuance under the ESPP. Equity compensation expense was $5.8 million and $15.5 million for the thirteen and thirty-nine weeks ended October 29, 2022, respectively. Equity compensation expense was $2.9 million and $36.1 million for the thirteen and thirty-nine weeks ended October 30, 2021, respectively, which includes approximately $24.9 million in non-cash expenses related to the 2021 Vesting Event which occurred during the 2021 second quarter. These costs are included in selling, general and administrative expenses in the consolidated statements of income. Distribution On August 28, 2020, New Academy Holding Company, LLC, the parent holding company for our operations prior to our initial public offering, paid a $257.0 million distribution to its members of record as of August 25, 2020. Cash payments ("Share-Based Award Payments") of $32.2 million for unvested Awards were paid upon vesting of such Awards, which was completed and paid in-full as of July 31, 2021. Service Option Fair Value Assumptions The fair value for Service Options granted was estimated using a Black-Scholes option-pricing model. The expected lives of the Service Options granted were based on the "SEC simplified" method. Expected price volatility was determined based on the implied volatilities of comparable companies over a historical period that matches the expected life of the Award. The risk-free interest rate was based on the expected U.S. Treasury rate over the expected life. The dividend yield was calculated based on the most recent annualized quarterly dividend and the valuation date closing stock price. The assumptions used to calculate the fair value of Awards granted are evaluated and modified, as necessary, to reflect current market conditions and experience. The following table presents the assumptions and grant date fair values for Service Options granted in the thirty-nine weeks ended October 29, 2022:
The following table presents the Award grants during the thirty-nine weeks ended October 29, 2022:
The following table presents the unrecognized compensation cost as of October 29, 2022:
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Earnings per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Common Share | Earnings per Common Share Basic earnings per common share is calculated based on net income divided by the basic weighted average common shares outstanding during the period, and diluted earnings per common share is calculated based on net income divided by the diluted weighted average common shares outstanding. Diluted weighted average common shares outstanding is based on the basic weighted average common shares outstanding plus any potential dilutive effect of stock-based awards outstanding during the period using the treasury stock method, which assumes the potential proceeds received from the dilutive stock options are used to purchase treasury stock. Anti-dilutive stock-based awards do not include awards which have a performance or liquidity event target which has yet to be achieved. Basic and diluted weighted average common shares outstanding and basic and diluted earnings per common share are calculated as follows (amounts in thousands except per share amounts):
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Related Party Transactions |
9 Months Ended |
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Oct. 29, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions On January 27, 2021, May 5, 2021 and September 14, 2021, in connection with the Secondary Offering, May 2021 Secondary Offering and September 2021 Secondary Offering, respectively, the Company entered into three separate underwriting agreements with affiliates of KKR (as selling stockholders), the several other selling stockholders named therein, and the several underwriters named therein, including KCM (as underwriter). The Secondary Offering, May 2021 Secondary Offering and September 2021 Secondary Offering were completed on February 1, 2021, May 10, 2021, and September 17, 2021, respectively. The Company did not pay KCM any fees in connection with these secondary offerings. In connection with the May 2021 Secondary Offering, we repurchased from the underwriters 3,229,974 shares of ASO, Inc. common stock at $30.96 per share for approximately $100.0 million. In connection with the September 2021 Secondary Offering, we repurchased from the underwriters 4,500,000 shares of ASO, Inc. common stock at $43.52 for approximately $195.8 million. The shares repurchased in both the May 2021 Secondary Offering and the September 2021 Secondary Offering were immediately retired by the Company (see Note 1 and Note 2).
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Commitments and Contingencies |
9 Months Ended |
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Oct. 29, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Freight, Technology Related and Other Commitments As of October 29, 2022, we have obligations under freight, technology-related, construction and other contractual commitments in the amount of $92.0 million. Of such commitments, approximately $54.6 million is payable in the next 12 months. Financial Guarantees During the normal course of business, we enter into contracts that contain a variety of representations and warranties and provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against us that have not yet occurred. However, based on experience, we believe the risk of loss to be remote. Legal Proceedings We are a defendant or co-defendant in lawsuits, claims and demands brought by various parties relating to matters normally incident to our business. No individual case, or group of cases presenting substantially similar issues of law or fact, is expected to have a material effect on the manner in which we conduct our business or on our results of operations, financial position or liquidity. The majority of these cases are alleging product, premises, employment and/or commercial liability. Reserves have been established that we believe to be adequate based on our current evaluations and experience in these types of claim situations. However, the ultimate outcome of these cases cannot be determined at this time. We believe, taking into consideration our indemnities, insurance and reserves, the ultimate resolution of these matters will not have a material impact on our financial position, results of operations or cash flows. Sponsorship Agreement and Intellectual Property Commitments We periodically enter into sponsorship agreements generally with professional sports teams, associations, events, networks, or individual professional players and collegiate athletic programs in exchange for marketing and advertising promotions. We also enter into intellectual property agreements whereby the Company receives the right to use third-party owned trademarks typically in exchange for royalties on sales. These agreements typically contain a to three-year term and contractual payment amounts required to be paid by the Company. As of October 29, 2022, we have $14.9 million in related commitments through 2027, of which $4.9 million is payable in the next 12 months.
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Subsequent Events |
9 Months Ended |
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Oct. 29, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Our management evaluated events or transactions that occurred after October 29, 2022 through December 7, 2022, the issuance date of the consolidated financial statements, and identified the following matter to report: On December 6, 2022, the Company's Board of Directors declared a quarterly cash dividend with respect to the fiscal quarter ended October 29, 2022, of $0.075 per share of the Company's common stock, payable on January 13, 2023, to stockholders of record as of the close of business on December 20, 2022.
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Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Oct. 29, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | These unaudited condensed consolidated financial statements include the accounts of ASO, Inc. and its subsidiaries, New Academy Holding Company, LLC ("NAHC"), Academy Managing Co., LLC, Associated Investors, LLC, Academy, Ltd., the Company's operating company, and Academy International Limited. NAHC, Academy Managing Co., LLC, and Associated Investors, LLC are intermediate holding companies. |
Principles of Consolidation | All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates in the Preparation of Financial Statements | The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Our management bases its estimates on historical experience and other assumptions it believes to be reasonable under the circumstances. Actual results could differ significantly from those estimates. Our most significant estimates and assumptions that materially affect the financial statements involve difficult, subjective or complex judgments by management, including the valuation of merchandise inventories and performing goodwill, intangible and long-lived asset impairment analyses. Given the global economic climate and the possibility of additional unforeseen effects from the COVID-19 pandemic, these estimates remain challenging, and actual results could differ materially from our estimates. |
Recent Accounting Pronouncements | Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This pronouncement provides temporary optional expedients and exceptions to the current guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The adoption of this guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the expedients and exceptions provided by this amendment as it relates to our transition from LIBOR to another reference rate to determine the impact. Supplier Finance Programs In September 2022, the FASB issued ASU 2022-04, "Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations." This pronouncement requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of the financial statements to understand the program's nature, activity during the period, changes from period to period and potential magnitude. The adoption of these amendments is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except the amendment on roll-forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this accounting standard will have on its financial disclosures.
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Net Sales (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table sets forth the approximate amount of sales by merchandise divisions for the periods presented (amounts in thousands):
(1) E-commerce sales consisted of 9.5% and 9.7% of merchandise sales for the thirteen and thirty-nine weeks ended October 29, 2022, respectively, and 8.0% for the thirteen and thirty-nine weeks and October 30, 2021. (2) Other sales consisted primarily of the sales return allowance, gift card breakage income, credit card bounties and royalties, shipping income, net hunting and fishing license income and other items.
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Reconciliation of Gift Card Liability | The following is a reconciliation of the gift card liability (amounts in thousands):
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Our debt consisted of the following (amounts in thousands) as of:
(1) Deferred loan costs are related to the Term Loan and Notes.
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Derivative Financial Instruments (Tables) |
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Impact of Gains and Losses Related to Interest Rate Swaps | The impact of gains and losses related to interest rate swaps that were deferred into AOCI and subsequently reclassified into expense are as follows (amounts in thousands):
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Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and equipment consists of the following (amounts in thousands) as of:
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Accrued Expenses and Other Current Liabilities (Tables) |
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Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | Accrued expenses and other current liabilities consist of the following (amounts in thousands) as of:
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Schedule of Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (amounts in thousands) as of:
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Share-Based Compensation (Tables) |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assumptions and Grant Date Fair Values for Options Granted | The following table presents the assumptions and grant date fair values for Service Options granted in the thirty-nine weeks ended October 29, 2022:
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Units Granted | The following table presents the Award grants during the thirty-nine weeks ended October 29, 2022:
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Unrecognized Compensation Cost | The following table presents the unrecognized compensation cost as of October 29, 2022:
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Earnings per Common Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 29, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Common Share | Basic and diluted weighted average common shares outstanding and basic and diluted earnings per common share are calculated as follows (amounts in thousands except per share amounts):
|
Net Sales - Gift Card Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2022 |
Oct. 30, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
|
Change in Contract with Customer, Liability [Roll Forward] | ||||
Gift card liability, beginning balance | $ 69,959 | $ 60,526 | $ 86,568 | $ 74,253 |
Issued | 18,288 | 17,407 | 63,164 | 61,333 |
Gift card liability, ending balance | 66,544 | 58,309 | 66,544 | 58,309 |
Redeemed | ||||
Change in Contract with Customer, Liability [Roll Forward] | ||||
Redeemed and recognized as breakage income | (21,023) | (19,006) | (80,668) | (74,749) |
Recognized as breakage income | ||||
Change in Contract with Customer, Liability [Roll Forward] | ||||
Redeemed and recognized as breakage income | $ (680) | $ (618) | $ (2,520) | $ (2,528) |
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands |
Oct. 29, 2022 |
Jan. 29, 2022 |
Oct. 30, 2021 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Total debt | $ 695,500 | $ 697,750 | $ 698,500 |
Less current maturities | (3,000) | (3,000) | (3,000) |
Less unamortized discount on Term Loan | (2,135) | (2,463) | (2,572) |
Less deferred loan costs | (7,562) | (8,702) | (9,083) |
Long-term debt, net | 682,803 | 683,585 | 683,845 |
Secured Debt | Term Loan, due November 2027 | |||
Debt Instrument [Line Items] | |||
Total debt | 295,500 | 297,750 | 298,500 |
Senior Notes | Notes, due November 2027 | |||
Debt Instrument [Line Items] | |||
Total debt | 400,000 | 400,000 | 400,000 |
Revolving Credit Facility | ABL Facility, due November 2025 | |||
Debt Instrument [Line Items] | |||
Total debt | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions |
Oct. 29, 2022 |
Jan. 29, 2022 |
Oct. 30, 2021 |
---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Borrowings, fair value | $ 700.0 | $ 700.0 | $ 700.0 |
Money Market Funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Money market funds | $ 264.7 | $ 401.0 | $ 294.0 |
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Oct. 29, 2022 |
Jan. 29, 2022 |
Oct. 30, 2021 |
---|---|---|---|
Payables and Accruals [Abstract] | |||
Accrued interest | $ 13,340 | $ 6,583 | $ 12,676 |
Accrued personnel costs | 57,979 | 115,073 | 91,433 |
Accrued professional fees | 1,762 | 4,534 | 3,632 |
Accrued sales and use tax | 15,025 | 13,054 | 23,111 |
Accrued self-insurance | 15,677 | 15,824 | 13,784 |
Deferred revenue - gift cards and other | 69,727 | 88,713 | 61,145 |
Income taxes payable | 5,848 | 9,602 | 21,900 |
Property taxes | 46,806 | 17,747 | 45,056 |
Sales return allowance | 6,100 | 6,200 | 5,800 |
Other | 26,915 | 25,877 | 25,951 |
Accrued expenses and other current liabilities | $ 259,179 | $ 303,207 | $ 304,488 |
Share-Based Compensation - Assumptions and Grant Date Fair Values for Options Granted (Details) - Service Options |
9 Months Ended |
---|---|
Oct. 29, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life in years | 6 years 2 months 12 days |
Expected volatility, minimum | 42.90% |
Expected volatility, maximum | 44.80% |
Weighted-average volatility | 43.00% |
Risk-free interest rate, minimum | 2.40% |
Risk-free interest rate, maximum | 4.10% |
Dividend yield | 0.80% |
Share-Based Compensation - Unrecognized Compensation Cost (Details) |
Oct. 29, 2022
USD ($)
|
---|---|
Service Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options, Remaining expense | $ 16,238,904 |
Weighted average life remaining in years | 2 years 7 months 6 days |
Service Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted units, Remaining expense | $ 12,651,300 |
Weighted average life remaining in years | 2 years 6 months |
Performance Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted units, Remaining expense | $ 5,172,155 |
Weighted average life remaining in years | 2 years 4 months 24 days |
Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 17, 2021 |
May 10, 2021 |
Oct. 29, 2022 |
Jul. 30, 2022 |
Apr. 30, 2022 |
Oct. 30, 2021 |
Jul. 31, 2021 |
Oct. 29, 2022 |
Oct. 30, 2021 |
|
Related Party Transactions [Abstract] | |||||||||
Repurchase of common stock for retirement (in shares) | 4,500,000 | 3,229,974 | 2,176,463 | 5,722,892 | 9,999,704 | 8,952,866 | |||
Stock repurchased and retired during period, price per share (in dollars per share) | $ 43.52 | $ 30.96 | |||||||
Repurchase of common stock for retirement | $ 195,800 | $ 100,000 | $ 100,824 | $ 200,111 | $ 88,501 | $ 245,837 | $ 100,000 | $ 389,400 | $ 345,800 |
Subsequent Events (Details) - $ / shares |
3 Months Ended | |||
---|---|---|---|---|
Dec. 06, 2022 |
Oct. 29, 2022 |
Jul. 30, 2022 |
Apr. 30, 2022 |
|
Subsequent Event [Line Items] | ||||
Cash dividends declared (in dollars per share) | $ 0.075 | $ 0.075 | $ 0.075 | |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Cash dividends declared (in dollars per share) | $ 0.075 |
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