Analyst lowers Academy Sports earnings forecast amid demand concerns

In the recent report from Truist Securities on June 11, 2025, analysts expressed a cautious outlook on Academy Sports and Outdoors, Inc., primarily due to ongoing economic challenges impacting consumer demand. Analyst Joseph Civello reiterated a Hold rating on the company, raising the price target to $47 from $45, reflecting a balance between the company's successful business transformation and the persistent pressures on its key middle-income demographic. Civello acknowledged the operational improvements seen since 2019, while warning that macroeconomic conditions could suppress demand for a longer duration than the market currently anticipates. For the first quarter, Academy Sports reported adjusted earnings per share of 76 cents, which fell short of the analyst consensus estimate of 90 cents. Furthermore, net sales figures of $1.35 billion were below the expected $1.37 billion. This slight decline in sales (by 0.9%) was accompanied by a deeper drop in comparable sales, which fell by 3.7%. Analysts noted a decline in customer traffic during this period, recording a mid-single-digit decrease, with additional low-single-digit declines in May, further aggravated by a volatile macroeconomic environment. Such conditions have led to a considerable impact on sales performance. The report also pointed to promising trends from expanded collaborations with major brands like Nike, particularly highlighting new Jordan collection lines that have surpassed initial expectations. However, as Academy Sports navigates significant tariff pressures and fluctuating consumer sentiment, optimism is tempered by the understanding that macroeconomic volatility remains a significant hurdle. Despite some positive indicators in brand performance, overall traffic to stores has felt the strain, leading analysts to maintain a cautious stance. Looking ahead, analyst projections suggest a modest uptick in earnings for FY25, with estimates sitting at $6.00. Conversely, the FY26 earnings estimate was adjusted downward from $6.80 to $6.60, indicative of the analysts' skepticism regarding the rebound of the core customer base in the near future. As the second half of the year approaches, continued scrutiny on tariff impacts and overall demand is expected to shape the company's performance outlook and strategic response.