This Sporting Goods Store's CEO Flagged Slower Traffic Decline Among Low-Income Shoppers Stock Down 9% After Q2 Earnings

Academy Sports and Outdoors (ASO) CEO Steven Lawrence said on Tuesday that the company is experiencing traffic erosion among lower-income cohorts that earn less than $50,000 a year, but the pace of these declines is less than that of the first quarter.

“Consumers are clearly looking for ways to navigate the current inflationary environment and are seeking out ways to stretch their spending power,” Lawrence said on a post-earnings call.

Retail sentiment on Academy Sports and Outdoors improved to 'extremely bullish' from 'bullish' territory, with message volumes at 'extremely high' levels, according to data from Stocktwits.

Shares of Academy Sports and Outdoors were down nearly 9% during midday trading. The company's second-quarter adjusted earnings per share (EPS) came in at $1.94, compared with Wall Street expectations of $2.15, according to data compiled by Fiscal AI. It reported a quarterly revenue of $1.60 billion, compared with analysts' estimates of $1.61 billion.

“We continue to see strong double-digit growth in foot traffic and share gains from customers in the top two income quintiles, which are households making more than $100,000 a year,” Lawrence said, adding that the company saw flat traffic share in the middle-income consumer, whose households make $50,000 to $100,000 a year.

Academy Sports and Outdoors now expects its adjusted EPS to be between $5.60 and $6.30, up from the earlier forecast of $5.45 to $6.25. The firm forecasts net sales to come between $6.0 billion and $6.27 billion, compared with its previous expectation of $5.97 billion to $6.27 billion.

Telsey Advisory Group's analyst, Cristina Fernandez, said that the company's annual forecast raises reflect improved visibility regarding the impact of tariffs and better mitigation positioning.

Shares of the company declined by over 14% this year and have fallen by more than 11% in the last 12 months.

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