Paul Lejuez — Manager Director, Citi
Hey, thanks, guys. I'm curious if we could start with the average ticket increase of 3.3%, if you could talk about AUR versus UPT, the build-up to get to that ticket, and then I'm curious what sort of price increases were taken in the third quarter relative to the costs that were running through the P&L. I know you brought in some inventory early, so I'm wondering if there was a temporary mismatch between the prices that you took benefiting the gross margin versus how those tariff costs run through the P&L, and what is the dynamic for 4Q and even beyond as we look out to first half of 2026? Thanks.
Steve Lawrence — CEO, Academy Sports and Outdoors
Hey, thanks for the question, Paul. Carl and I will probably tag team this from an AUR perspective. It played out as we thought. AURs for the quarter were up mid- to high-single digits as we progressed through the quarter, which is what we had outlined on our last call. UPT was down mid-single digits, so we did see some trade-off between AUR and unit sales as we progressed through the quarter in terms of pricing. We've talked about there's a lot of different ways we've been trying to raise AURs. A lot of that's through clearance management, promotion management, and of course, the last resort was taking up tickets. We did a little bit of that in the quarter, which resulted in the higher margin. We do feel pretty good about where we sit from a pricing architecture perspective at this point in time heading into holiday.
So it played out about as we thought in terms of the flow through from a tariff perspective. I'll turn it over to Carl.
Carl Ford — CFO, Academy Sports and Outdoors
Yeah. So within that 170 basis points of gross margin, 120 basis points was growth related to merchandise margin. That's inclusive of the tariff burden. And then we had 30 basis points of freight good news and 20 of shrink. As it relates to the 120 basis points of merchandise margin growth, you're right. We're on weighted average cost. So to the extent that we're moving AURs up in anticipation of tickets positioning, you'll get a little bit of a bump associated with that in the initial quarter. We're beginning to see that as it relates to the fourth quarter, which was kind of the last part of yours. We've got the midpoint of our guidance at flat gross margin, and I think that's appropriate for the environment that we're in.
Paul Lejuez — Manager Director, Citi
And just a follow-up. What sort of price increases should we expect to see in the fourth quarter relative to the third? And will that be the peak of the price increases, or does it get even higher as we look out to the first half?
Steve Lawrence — CEO, Academy Sports and Outdoors
Yeah. Our expectation from an AUR perspective is up high single, low double digits for Q4. We'd expect that to kind of plateau at that level and carry into Q1 and Q2 of next year. And as we lap kind of the accelerated tariffs in the back half of the year, settle in at more of a flattish level. But certainly, what we're going to see for Q4, we think, will carry forward into Q1 and Q2.
Paul Lejuez — Manager Director, Citi
Thank you, guys. Good luck.
Carl Ford — CFO, Academy Sports and Outdoors
Thank you.
Steve Lawrence — CEO, Academy Sports and Outdoors
So I'll start with, yeah, we continue to be really pleased with the contribution that Jordan and increased access to better Nike product has had on our stores, as we cited on the prepared remarks. If you combine those two brands, we don't have a last year for Jordan, right? But if you combine the two brands, they were up high single-digit comp. So that's pretty exciting considering Nike is our biggest brand already. So that's a meaningful contribution. We've rolled out elements to all stores, as we noted in the prepared remarks, things like cleats, slides, some sporting goods like basketballs and things like that. We're going to roll more apparel and footwear out into more doors in spring. So we expect it to be a growth driver for us into next year as well. In terms of new brands, listen, it's not just about apparel and footwear.
We're really focused on making sure we have a lot of new exciting things across the whole footprint. So some of the things we called out, when you look at what we've done with brands like Burlebo, we've rolled out other brands more deeply into the store, such as Birkenstock in footwear. We've got some new hot trading cards that have come in. We've got a lot of new fun, innovative brands that we brought in this year. We'll continue to do that. It's not just about apparel and footwear. It's looking for those things across the store, and I think we're looking at not just tried-and-true brick-and-mortar brands, but things that are digitally native and looking for ways to partner with them and bring them into retail as well.
Great. Thank you, guys. Good luck.
Thanks.
Steve Lawrence — CEO, Academy Sports and Outdoors
Yeah. I would say it's meeting our expectations and doing better in some categories. So we're very, very pleased with how this is playing out for us. If you go back and look at the quarter, actually, if you take ammo out, we would have run a positive comp. I have a boss who, whenever I've said things like that in the past, and I'd say, "Hey, if you take ammo out, we run a positive comp," he would say, "Well, yeah, if you take the Eagles out of the Super Bowl last year, the Chiefs would have won five Super Bowls." So we try not to do that too often. But generally, we were pretty pleased with the performance of all the different categories. All categories ran an increase last quarter.
Ammo was probably the one drag, and that's really, we believe, a reflection of anniversary in the run-up to the election last year. We saw a big surge in demand, and as we noted in the prepared comments, once we got past that in November, we saw the ammo business stabilize, so I feel like the initiative is playing out as we thought. We're seeing acceleration in our dot-com business, acceleration in our new store business. It really was. Ammo was the drag.
That makes sense. Our follow-up question is on the implied Q4 comp guide. Our math, we're getting about a down 3.5% to an up 3.5%, which is a wide range for the fourth quarter. We were curious why the range is so wide and what the puts and takes are of hitting the high and low end.
Carl Ford — CFO, Academy Sports and Outdoors
It is a wide range. We're not national. We've got some localized stuff that's going on from a weather perspective. The midpoint of the guidance is flat, and Jolie, your ranges are about right. From a puts and takes standpoint, look, AURs are elevated. That's a load on the consumer. The price of poker has gone up with tariffs, and so what we're seeing is that the AUR is largely offset with unitary degradation, whether in the form of traffic or UPTs. And so the downside implies that that elasticity worsens, and the upside is basically just how the consumer responds to that, so that's really the difference between the high and the low is the unitary offset of AURs going up.
Great. Thank you.
Steve Lawrence — CEO, Academy Sports and Outdoors
Thank you.
Emily Ghosh — Equity Research Associate, Goldman Sachs
Hi. This is Emily Ghosh for Kate McShane. We were wondering, how would you characterize the health of the Academy customer, and how does the level of trade-in that you saw again from upper-income customers compare to what you saw in the second quarter?
Steve Lawrence — CEO, Academy Sports and Outdoors
Yeah. So I think that's an interesting question. I think there's a lot of talk out there amongst different pundits around this K-shaped economy. I believe that that's a real thing. I think that at the high end, we're seeing continued growth. The consumer's making over $100,000 a year annually. We saw that growth continue into this quarter being in the high single digits. As we noted in the prepared remarks, that's a little lower than we saw in Q2 and Q1, where it was up in the double-digit range. But that being said, we're starting to lap that trend that we started to see happen a year ago. So we're pleased that we're continuing to see it build on top of double-digit growth from last year. The middle-income consumer continues to be fairly steady and shopping pretty regularly.
The lower-income consumer continues to pull back and be very thoughtful about where they're shopping. We've seen declines there in the mid-single digits. That being said, that trend also got better versus where it was in Q2 and Q1. We're adding more customers in at the top end faster than we're shedding at the low end. That being said, we like all the shoppers to come shop with us this holiday, and we've got great deals and great values to try to attract them. Certainly, the lower-income consumer continues to be under pressure with inflation and what's going on in the economy.
Carl Ford — CFO, Academy Sports and Outdoors
We talked a little bit, Emily, about this on the last call. But if I think about the last year at Academy, I think there's been an exceptional de-risking of the consumer portfolio. And by that, I mean, look, we don't want people who make below 50,000, quintiles 1 and 2, to stop shopping with us. But I think not just at Academy, but overall prices in the marketplace have gone up. And in some cases, they're not shopping in the category anymore. If you think about that being more than offset with households that make over 100,000, if I compare the average customer now versus a year ago, they're significantly healthier. But I think it's because of the trade into Academy and those quintiles 4 and 5.
Steve Lawrence — CEO, Academy Sports and Outdoors
Yeah. This is Steve. We'll probably tag team this one. I would say the dot-com business being up 22% was above where we had planned it. I think the team's done a really, really good job there. I'd love to point to one thing that's driving it. I think it's a combination of all the efforts the team has made over the past year in terms of improving navigation and filtering a product, improved site functionality and search, more personalized experiences, expanded assortment options through drop ship. It's all that work that's really helped. And as we said, there's definitely a symbiotic relationship between adding a new store into a new market and then us seeing a surge in dot-com demand as we build brand awareness in that new market. So we expect that to continue as we move into new markets.
Pivoting to kind of the mix between existing and new markets, we're going to move back next year to about 80/20 new and existing. So if you look at it, legacy and existing, I'm sorry, it'll be about 80%, new will be 20. What we found as we've been going on this journey is that while we've been opening up and primarily focused on new markets, there's been a lot of population growth in our core legacy markets. As a matter of fact, there was a stat we were looking at the other day that I think over a third of all commercial real estate being developed in the U.S. is in Texas right now. And so we've got a lot more opportunity than maybe we initially thought to open up stores in kind of our legacy footprint.
We tend to find those stores more in those mid-sized markets where our always-game family lives. And they're a little underserved in terms of other retail outlets. And so we think that's a really big opportunity for us. In terms of the economics of the new stores opening up in a new market versus an existing market?
Carl Ford — CFO, Academy Sports and Outdoors
Yeah. I think from a build-out standpoint, we're still at the $4-$5 million. And that's all in. That's inclusive of net inventory. As I think about the run costs, from a brand awareness standpoint, the brand awareness within our legacy or existing footprint around Academy is exceptionally high. And so I think from a marketing standpoint, we're not going to have to introduce the brand as much as I think about some of the new states that we've opened over the last two or three years. I think from a rent perspective, rents are going up in the U.S. as we look at some of these small to mid-sized marketplaces, really attractive rents and landlords and municipalities that really want us there. So I think the overall ROIC proposition and payback period would be better as it relates to legacy and existing marketplaces.
But with that being said, we're not going to stop planting seeds and growing the brand. We're just seeing some really compelling opportunities within our space. And I do want to just speak directly to cannibalization. We're seeing very low levels of cannibalization when we look at our pro formas at how these stores will operate. We look at drive times to existing stores. If it's an hour away, there's going to be some level of overlap. We model that in the net ROIC. And we're actually pretty pleased. I think some of that is because of the population demographics that Steve spoke to.
That's great, guys. I appreciate it. Thank you so much.
Steve Lawrence — CEO, Academy Sports and Outdoors
Thank you.
Dan Silverstein — Analyst, UBS
Hi. Good morning. This is Dan Silverstein on for Michael. Thanks so much for taking our question. Maybe just to start with merchandise margins up 120 basis points in 3Q. Inventory units sound like they're in a healthy position. What are the potential pressure points for the fourth quarter gross margin outlook?
Steve Lawrence — CEO, Academy Sports and Outdoors
I think it comes down to just the health of the consumer, right? I think the word everybody's using is choiceful. And so what we've seen is that that is really demonstrated by the customer coming out when promotions are happening and pulling back when they're not aggregating sales around promotions. And that's really what's going to drive it, right? At the end of the day, it's going to be we've got a lot of thoughtful promotions that we've built out there that hopefully will resonate with the consumer. But I think the biggest probably wildcard will be how they react to those promotions and what's the take rate on those as we progress throughout the holiday. I think we're in a pretty good place from a seasonal perspective. We really don't think there's going to be a big seasonal liability carryover from that perspective.
But I think it's more just the customer's appetite to buy and how much they buy in promotion.
Dan Silverstein — Analyst, UBS
Very helpful, and then just our follow-up. As your recent vintages of store openings have continued to get more productive, does this help provide a floor for what you think is achievable from a comp perspective next year? I think you cited a high single-digit comp for those recent store openings, a very healthy level, so just wondering how that evolves from here.
Carl Ford — CFO, Academy Sports and Outdoors
Yeah. I'm very fired up about how the new stores are performing. I think we have a high degree of precision of how year one will come out based off of whether there's market awareness. And that $12 million-$16 million is playing out kind of like we thought as it relates to the high single-digit comp once they're in the base. And again, we treat things that once they on the 14th month, they fall into the comp set. Something that I think is really meaningful, there's 26 stores in the third quarter that are in that comp set. And it provided about a 50 basis points comp tailwind if you think about it from a waterfall standpoint. We'll have 50 stores this time this year that are in that comp base.
I think the things that you guys have seen in the marketplace and we've seen in the marketplace as it relates to building up that retail pipeline, it's going to play out that way here. I think we'll like the way that that matures long term.
Dan Silverstein — Analyst, UBS
Thank you so much.
Steve Lawrence — CEO, Academy Sports and Outdoors
Yeah. I would say promos were roughly in line with where they were last year for Black Friday. Things we've looked at as we've been trying to look at raising AURs is how do we promote? How broad is that promotion? How long do we run it? But if you look at the absolute level of promos for us, and it looks like across the industry, I would say it was fairly consistent with last year. I think as we go through the holiday, I think the wildcard continues to be, as I said earlier, just what is the customer's take rate on those promos? What we've seen happen a lot in Q3 and in Q4 is if we run the same promotion as we did a year ago, same level, etc., more customers are taking advantage of that.
So I think that's going to be a thing that we're going to see continue as we make our way through the rest of the holiday. In terms of Foot Locker promotions, I would tell you our assortment versus theirs, there's not much overlap. They certainly carry Jordan and a lot of basketball shoes. We tend to be more game shoes. They tend to be more limited edition releases and things like that. So we don't expect that to have a big impact on us. Certainly, that's more of a mall-based customer. Most of our stores are off mall. So I don't think it's going to have a lot of impact on us.
Great. Thank you. Appreciate it. And can you talk about where you're raising price within your assortment versus where you might have seen some unit degradation?
I'd say in general, prices have gone up a little bit almost across the board. Certainly, it's more pronounced in the hardgoods side of the business than the apparel side of the business based off where that sourcing base is. But once again, as we're looking at raising AURs, there are multiple tactics we're looking at, right? Step one is being better in how we manage clearance. And so taking less goods to clearance and being more thoughtful about when and how we clear goods. We're looking at promotions. In a lot of cases, maybe shortening the length of promotions or maybe not being as broad, including everything within a brand. Maybe it's just key categories. In some cases, it may be reducing the depth of promotions. And so we look at all those things first.
And then the last thing we try to look at would be actually physically raising prices, the tickets on goods. Certainly, some of that's happened as the national brands have passed on price increases and raised their MSRPs. We've tried to keep in lockstep with that with our private brands. But I would say it's pretty broad-based. It's not any one area, but it's more pronounced in the hardgoods side of the business.
Understood. Thank you.
John Heinbockel — Managing Director, Guggenheim
Hey, guys. I wanted to start with year two and year three comps on the new stores. How much do they tick down from high single digit, if at all? I don't know if they kind of land mid-single digit. And if I think about the traffic ticket composition of that, how does that look, right, in those new stores? And then clearly, World Cup will be a positive next year. How significant do you think that is? And obviously, that's something you can lean into, I would imagine, pretty hard.
Steve Lawrence — CEO, Academy Sports and Outdoors
I think we'll tag team this one. I'll take the World Cup piece of it first. Listen, I think it's going to be significant, right? We have a lot of games and matches that are going to be played within our footprint between Dallas and Houston. We already have some World Cup jerseys on the floor as well as the soccer ball, the Tiro soccer ball at various levels. And the initial reads on both are very, very good. I think we're excited about it. We're not going to give guidance next year, but certainly, we think it could be a tailwind for us through the summer months as the World Cup plays out, but really, what we think is that the impact will be more long-lasting than that.
The last time the World Cup was in the United States, the real benefit was not the actual bump you got from tourism or selling jerseys. It was the participation in soccer after the fact. And we really think that's going to provide a big tailwind for the soccer business for us for many years to come, not only in 2026, but 2027 and 2028.
Carl Ford — CFO, Academy Sports and Outdoors
Yeah. And John, as it relates to the kind of the year two comp, the only thing that I would call out as being a bit different is that 14th month tends to be a negative comp. So there's still some grand opening anniversary and some marketing hoopla and the neatness of having a new store in my location drives a lot of activity. They positive comp in their first quarter, but that first month is a little bit different. And then as it relates to year two and year three, we're seeing pretty good strength across the board associated with that. I think the only thing to call out there would literally be that 14th month just tends to be negative.
John Heinbockel — Managing Director, Guggenheim
All right. And my follow-up, when you look at population growth in a lot of your markets, Florida looks incredibly underdeveloped. What's your thought when you kind of do your long-term real estate plan on that state? And is there real estate availability cost? Is there anything holding that back or just that's kind of how the availability has fallen?
Carl Ford — CFO, Academy Sports and Outdoors
I love the Florida marketplace. I think it plays out exceptionally well associated with our fishing assortment. I think the demographics of the state line up pretty well with getting outside and having fun. The one thing I would call out is the state is proud of the land and they're proud of the rents that they charge in some of these locations. We're committed to having a ROIC of 20% and a four-year payback, so I think we're very selective associated with where we go in, and we love to partner with landlords who want to make that worth our while, but I love the demographics. I love the people that are moving to the state of Florida. We got to make sure it's a win-win opportunity and we don't degrade the ROIC of the company associated with where we put stores.
Steve Lawrence — CEO, Academy Sports and Outdoors
Just to be clear, when we're talking about 80% of the new stores next year kind of in legacy and existing markets, Florida would be an existing market for us, and we think that there's a lot of opportunity, particularly in these middle-sized markets with underserved consumers there. We think that that definitely aligns with who our customer is and you're going to continue to see us grow in Florida.
John Heinbockel — Managing Director, Guggenheim
Thank you.
Carl Ford — CFO, Academy Sports and Outdoors
Thank you.
Anna Glaessgen — Analyst, B. Riley
Hey, good morning. Thanks for taking my question. I'd like to turn back to the ammunition commentary. I believe that ammo and firearm together are less than 10% of sales. So surprised by the magnitude of impact that I guess ammo had on the quarter. So maybe if you could expand on that, maybe there's a seasonal aspect because 3Q captures the hunt season. And then secondly, as we've seen some stabilization in ammo post-election, is it possible at this new stable level but still negative you can drive a positive comp? Thanks.
Steve Lawrence — CEO, Academy Sports and Outdoors
Yeah, absolutely. So you're right. We've cited in the past that ammo and firearms combines about 10% of the business. So you can assume ammo is roughly 5%. It does, at certain time periods, have outsized impact. What we'd attribute the sluggishness or slowness we saw in the ammo sales in Q3 was really a reflection on the election run-up from a year ago. If you go back, and this is something we see traditionally in front of a lot of different presidential elections, there's a run-up in advance of that as people are trying to better figure out what's happening one way or the other in terms of who's going to get elected. And we saw that right at the tail end of October last year.
And so as we came up against that, it certainly put us in a place where we're having a hard time comping those comps. We did see it stabilize as we got past that time period, which leads us to believe it was really the election run-up that was driving that. Yeah, we do believe that ammo, if it can run even where it is today in mid-single or actually, it's high single digits negative right now, we should be able to post comps if we can keep it at that level. It's only when it starts running much more negative that that becomes a bigger headwind.
Carl Ford — CFO, Academy Sports and Outdoors
I want to be real specific. Ammo in the third quarter was a negative 130 basis points headwind to comp. So if you bump that up against our negative 90 basis points, we would have been plus 40 without it and for all the reasons that Steve just said.
Anna Glaessgen — Analyst, B. Riley
That's super helpful. Thanks, guys.
Steve Lawrence — CEO, Academy Sports and Outdoors
Thank you.
Joseph Civello — Analyst, Truist
Hey, guys. Thanks so much for taking my questions. First off, how should we be thinking about the potential growth contribution from Nike and Jordan in 2026 versus 2025? I know you'd be lapping a tougher brand-specific comp, but offsetting that, you'll have a broader assortment for the full year, incremental doors, and the World Cup.
Steve Lawrence — CEO, Academy Sports and Outdoors
Yeah, so I would tell you that I think, depending upon the quarter, we've seen the combined Nike-Jordan grow in the high single and low double digits. I think you should expect that, and we expect that to happen again next year based off of further rollout of Jordan into more doors and continued access and rollout of more fashion product within Nike. It's going to be a growth driver for us, similar to what we saw this year.
Joseph Civello — Analyst, Truist
Got it. Thanks. And then also, can you just give any color on the margin benefits you're seeing from the inventory pulled forward prior to tariffs?
Steve Lawrence — CEO, Academy Sports and Outdoors
Yeah. I mean, I wouldn't say we've seen a huge margin benefit from it. What I would tell you is that it's allowed us to hold pricing on a lot of categories going through the holiday. The goal was when we first learned of these accelerated tariffs is we were looking at it saying, "Okay, there's a lot of inventory on this side of the water at those pre-accelerated tariff prices. If we can pull those into our warehouses in DC, that should allow us to be priced at last year's level on a lot of these items going into holiday." And we think that would give us an advantage. And that's how we planned it and played it out. So we really didn't see it as a huge margin uptick.
We saw it more as a way to protect sales and to offer value to the consumer going through the holiday.
Carl Ford — CFO, Academy Sports and Outdoors
I do want to echo. It was sweaty knuckles in the first part of the year with that inventory pull forward. I think our units per store were up 6.5% in the first quarter, like 4.5% in the second quarter. Now they're down 0.3%. We have no regrets associated with that pull forward. As we do our pricing scrapes to look at how like-to-like product or similar private brand products are selling, we feel really good about our ability to hold that inventory to lower cost and offer that to our consumers, and that's resonating from a value perspective.
Joseph Civello — Analyst, Truist
Got it. Thanks so much.
Steve Lawrence — CEO, Academy Sports and Outdoors
Thank you.
Angus Kelleher — Equity Research Associate, Barclays
Hi, this is Angus Kelleher on for Adrienne Yih. I wanted to ask about the % of product price increases implemented in fall 2025 and expected price increases for spring 2026. Then just curious, since you cited AUR running mid-high single digits and transactions down 4%, where are you seeing the elasticity thresholds by category?
Steve Lawrence — CEO, Academy Sports and Outdoors
If I understand your question correctly, you're asking around prices and AUR increases. As we said earlier, our AUR increases in Q2 were up mid-single digits. We expected Q3 to be up mid to high single digits. That's exactly what we saw. That's a combination of some price increases as well as promotional rationalization and better clearance management. We expect those to be up, AURs to be up high single, low double digits in Q4 and hold through Q1 and Q2 of next year. I don't see that necessarily changing. The question we got around elasticity was, what were we seeing from a UPT perspective? We saw UPTs be down about mid-single digits. We saw AURs in the quarter up mid to high single digits. So it's almost a one-to-one offset. It really varies by category.
We've got some categories in front end where I would say that it's been fairly inelastic. We've taken prices up, and there's been no resistance to that. I think if a customer is standing in line and wants a bottle of water, they're going to buy a bottle of water even if it costs $0.10 more. On the flip side, we've seen other categories that are highly elastic based off the price increases. So it's not a one-size-fits-all. It really varies by category.
Carl Ford — CFO, Academy Sports and Outdoors
Angus, one thing I would add to that is changing prices is very disruptive on the store floor, and it's very disruptive in a distribution center. And so how we thought about it is we want to go ahead and make those price changes and not have that be a perpetual activity. Nobody knows what tariffs is going to what's going to come out, but we've made those price changes, and they're costly to do on the floor. So our goal in all of the actions we've talked about with growing AUR, the last of which is changing tickets, we feel that if there's no significant changes to the tariff structure, we've reset the floor, reset the inventory in the distribution center so we can run a little bit more efficiently next year.
Angus Kelleher — Equity Research Associate, Barclays
That's great color. Thank you.
Steve Lawrence — CEO, Academy Sports and Outdoors
Thank you.
Carl Ford — CFO, Academy Sports and Outdoors
Yeah. From an SG&A standpoint, at the midpoint, it's basically 100 basis points of leverage. I don't have an SG&A going down, but it's close. I think some of the things that we're focused on is we've been you were kind of comparing it not to last year, but to the third quarter. There's price changes that are going on. I will tell you, last year in the fourth quarter, we had a sale-leaseback of a property. We always have first right of refusals on our leases, and in some cases, our landlords are looking to not be landlords and sell to another landlord. So in some cases, we'll step into that. That's a component of it. But I would just say overall, the team's set up to run efficiently. We've gotten rid of taking a bunch of price changes.
We're not trying to do those in November and December, so there's some good news there. From a buyback perspective, while my words said that we weren't going to get back at it, I do want to highlight that the guidance that we put out there does not have buybacks embedded in it as it relates to capital allocation philosophy. First, it's stability, hold cash, have the ABL. Second is invest in ourselves, and I would include inventory management in that category, and then third is give the rest back to shareholders with a nominal dividend and buybacks. I think from an order of magnitude standpoint, not going to get into the specifics since it's not included in the guidance, but we think our stock is attractively priced and we do cash flow well.
Great. Thanks, Carl. I'll pass it on.
Eric Cohen — VP, Gordon Haskett
Hi. Thanks for taking the question. I want to ask about the income cohort. Because on our previous calls, you had said that it was a sort of third, third, third, a third breakdown of the high, middle, low income. And today you said the high income is now 40%. So what do you think you can do to keep that higher income consumer since it seems to have a comp benefit? And do you think this is just a natural structural change in the customer base, or is this more of just higher income consumers are trading down and the lower income consumers just under pressure?
Steve Lawrence — CEO, Academy Sports and Outdoors
Yeah. I think it's a combination of both, Eric. I think that if you look at it, the reason we cited that 40%, because that's a pretty meaningful change for us from the third, and we've seen that happen over the past four quarters, so I wanted to call that out. I think what's driving that is two things. Number one, I do think that the higher income consumer is looking for value. And I think in some cases, we are the value leader in the space, and they're finding us and discovering us, and I think second, the work we've done around the assortment. If you think about where we are today versus where we were even four or five years ago in terms of layering on better, best brands across the category.
That could be baseball bats north of $100 or running shoes north of $100. I think we're in a different place today, so I think the work the merchants have done around building out that better, best assortment, adding brands like Jordan or Burlebo or Turtlebox or Ray-Ban Meta, all those things, I think, give that customer a reason to come shop with us and permission to continue to shop with us, and we're not going to stop assorting those brands, right? We're going to continue to look to build those. That doesn't mean we've lost focus on the value end of our assortment either, but we see this as additive, and so I think if we continue to do this work of bringing in new innovative brands, I think we'll keep that customer shopping with us and continue to grow share there.
Eric Cohen — VP, Gordon Haskett
Great. Great. And you called for 2025 stores next year. I thought the messaging earlier was that store growth should be accelerating sequentially each year. So is this any change in sort of how you're thinking about store growth going forward, or is 2025 sort of the right run rate in 2026 and beyond?
Steve Lawrence — CEO, Academy Sports and Outdoors
Yeah. I think what we're focused on each year is coming up with a list of new stores and locations that we feel really confident about. If you remember, we said about midway through the year that we were kind of pausing new stores and weren't giving a lot of guidance around what we're doing in Q1 because we wanted to see how the tariffs played out. We feel really good about the 20-25 stores we've identified for next year. We feel really good about the pipeline we're building. We'll share more information in our next call around 2026 guidance, and then we're looking to do an analyst day probably somewhere in early April. We'll share more details around what the long-range plan in terms of store growth looks like.
Eric Cohen — VP, Gordon Haskett
Sounds good. Appreciate the color.
Cristina Fernández — Analyst, Telsey Advisory Group
Hi, good morning. I wanted to ask about that high-income consumer that's coming to Academy. Do you have a sense of where they previously shopped or where those market shares gains are coming from? And then my second question is around private brands. How are those performing? And are you seeing consumers trade into or trade down to private brands as pricing has increased for national brands?
Carl Ford — CFO, Academy Sports and Outdoors
Yeah. On an income cohort standpoint, I can't speak to specific nameplates that they're coming from. A lot of this information is in our CDP. In that case, I don't see where they're coming from, our customer database platform. But as it relates to Placer, we're big users of Placer.ai. I can see shift. I would say, generally speaking, they're seeking value. They can't afford their lifestyle. They're seeing value offered at Academy, and they're intrigued by some new brands that we have.
Steve Lawrence — CEO, Academy Sports and Outdoors
I would say that when they come in, our private brands represent probably our best expression of value to our consumer. We're seeing them trade into those brands. I mean, we've talked about the strength we saw in Magellan during the quarter or Freely. I think that's a direct result of this customer coming in, maybe shopping for something that they saw at another store and thinking we have a better price on it, and then trading into one of our private brands. That's definitely a behavior we're seeing happen right now.
Thank you.
Thank you. Okay. So go ahead. I'm sorry.
Steve Lawrence — CEO, Academy Sports and Outdoors
I was taking it over before you're going to turn it over to me. So we're proud to close out this year by giving back to communities across our footprint. Throughout this holiday season, we posted more than 40 local give-back events, partnered with local organizations, and gifted $120,000 directly to families in need, embodying our company's commitment to making a positive impact on our communities. I'd also like to express gratitude to our 22,000-plus associates who work tirelessly to provide our customers with an outstanding experience when they shop at Academy. As I mentioned earlier, while we are now past the Thanksgiving kickoff of the season, we still have the lion's share of the holiday business ahead of us.
Having been in a lot of stores over the last month, I can honestly tell you that I feel we're in the best position we've been in since I joined the company to take care of our customers' holiday needs. With a strong inventory position and the most desirable and trend-right gift ideas, our associates are ready to help the customer, and our position as the value leader in the space is clearly resonating with consumers. Before I sign off, we're also excited to announce that we'll be hosting an analyst event in New York on April 7th to provide an update on our long-range plan that will be webcast to the public. In addition, to Carl and myself, we've been joined by other members of the executive team, so you can hear directly from the people executing all the initiatives you've been hearing about over the past year.
Thank you all for joining our call today, and have a very happy holiday season.
The call is now concluded. You may now disconnect. Thank you.