Academy Sports and Outdoors just posted record third quarter results. This success was fueled by strong relationships with key vendors such as Nike, Adidas, Under Armour, The North Face and Colombia.
Academy posted a net sales increase of 18.1% to $1.59 billion, a third quarter record. Comparable sales grew for the 9th consecutive quarter and merchandise inventories were up 22.4% year over year to $1.3 billion. As a result of the strong numbers, Academy raised its full year sales and earnings guidance.
Shares of Academy were up at least 7% by early afternoon on Friday.
Despite supply chain slowdowns and record-high inflation, the company managed to achieve its strongest inventory position in two years. In explaining the success, executives pointed to the company’s “status as a preferred vendor partner” and its “extensive vendor base,” said Academy CFO Michael Mullican in a call with investors.
In a year where leading brands such as Nike, Adidas, and Under Armour ended certain retail partnerships in favor of focusing on DTC channels, retailers that remain important channels for these brands are seeing major wins. For example, Dick’s Sporting Goods, FN’s 2021 retailer of the year, has maintained a strong connection with Nike via a beneficial supplier relationship and a new digital partnership. Hibbett Sports leverages a strong relationship with Nike and Adidas by focusing on selling to “underserved markets,” where there is less competition.
Likewise, Academy has proven itself to be an important channel for these brands, thanks to a few key advantages and strategies.
“They want to make sure that they’re partnering with people who who celebrate the brand, both in brick and mortar and digital stores and really stand for whatever they’re they’re standing for,” said Academy CMO Steve Lawrence in an interview with FN. He explained that Academy represents products according to a brand’s vision both online and in stores. This means that brand identity is preserved, even when it is distributed to stores.
As an outdoor retailer, Academy also puts leading brands in front of people that might not shop directly on a brand’s website, such as a cash-only consumer or someone that likes to shop in person. Hibbett and Dick’s, also preferred partners of key brands, offer similar benefits.
“We give them access to a customer base that they probably don’t reach through their own marketing and through their own site,” Lawrence explained.
But overall, Academy has proven itself to be a top choice for outdoor products as well as footwear and apparel. And when more people come to shop and discover, brands are satisfied.
“I think we’ve proven that over the past couple of years, we’re definitely a destination for active young families in our marketplace, where they come to for sports and outdoors, recreation, back to school, etc.” Lawrence said.