Academy Sports and Outdoors, Inc.

Good morning, ladies and gentlemen, and welcome to the Academy Sports and Outdoors third quarter of fiscal year 2021 earnings conference call. At this time, this call is being recorded and all participants are in a listen-only mode. Following the prepared remarks, there will be a brief question and answer session. Questions will be limited to analysts and investors. Please limit yourself to one question and one follow-up. To ask your question during the call, please press star 1. If you require any operator assistance during the call, please press star zero. I will now turn the call over to Matt Hodges, Vice President of Investor Relations for Academy Sports and Outdoors. Matt, please go ahead.

Good morning, everyone, and thank you for joining the Academy Sports and Outdoors third quarter 2021 results call today. Participating on the call are Ken Hicks, Chairman, President, CEO, Michael Mulliken, Executive Vice President, CEO, and Steve Lawrence. Executive Vice President and Chief Merchandising Officer. As a reminder, statements in today's earnings release and the comments made by management during this call may be considered forward-looking statements. These statements are subject to risk and uncertainties that could cause our actual results to differ materially from our expectations and projections. These risks and uncertainties include but are not limited to the factors identified in the earnings release and in our filings with the SEC. The company undertakes no obligation to revise any forward-looking statements Today's remarks refer to certain non-GAAP financial measures. Reconciliations to the most comparable GAAP measures are included in today's earnings release, which is provided on our investor relations website, investors.academy.com. I will now turn the call over to Ken Hicks, CEO. Thank you, Matt.

Good morning, and thank you all for joining us today. I want to start by the call by thanking all of the Academy sports and outdoor team members for their continued hard work and commitment to our vision and mission to become the best sports and outdoors retailer in the country by providing fun for all. You have met our challenges and raised expectations for the company. One year ago, we hosted our first earnings call as a public company. Since that time, we've improved our balance sheet and made tremendous progress against our key business priorities of building a stronger omnichannel business, enhancing the customer shopping experience in-store and online, improving our merchandise planning and allocation capabilities, increasing targeted marketing, and strengthening our supply chain. These efforts have resulted in enormous success in 2021, and we believe there is much more to come as we continue to improve our merchandise processes develop new capabilities, and open new stores to drive growth and profits. We appreciate your support as we continue on this exciting journey. Now I'll provide a high-level overview of the third quarter, and then Michael and Steve will present more details about the results and our expectations for the fourth quarter. During the third quarter, the team was resilient and delivered record financial results in the face of numerous challenges. including supply chain constraints, transportation bottlenecks, and two severe storms in our market. Consumer demand was strong across all of our major product categories as our customers are still centered on making healthy, lasting lifestyle changes and having fun experiences with friends and family. We are well positioned to meet their needs with our broad and diverse assortment of high-quality, value products from leading brands. Total sales for the third quarter increased 18.1% to a record $1.59 billion, with comparable sales of 17.9%. On a two-year basis, sales grew 39.1%. These outstanding results represent nine consecutive quarters of positive comparable sales and are a direct outcome of the work done against our priorities. The quarter included a robust back-to-school season in August and broad-based growth in September and October, led by apparel, field, team sports, and athletic footwear sales. We saw continued strength in our customer base as they shopped more frequently, across more categories, and spent more per trip. This resulted in growth in our transactions, average ticket size, and selling price compared to last year. Overall, each of our product divisions and regions grew more than 20% compared to Q3 2020, and we gained market share in each of our four product divisions across our entire footprint. E-commerce sales grew 25.9%. which was significantly faster than the stores. On a two-year basis, e-comm sales increased 146.6%. We continue to enhance the site's capabilities, both from a back-end functionality and a consumer-facing perspective, and expect Omnichannel to continue to grow faster than the stores over time. We're especially pleased by the early traction of our Academy app, which is now available to both Apple and Android users. We feel the customer will further leverage this new feature over the holiday selling season. By operating more efficiently and effectively in a tempered promotional environment, we achieved record gross margin of $560.8 million. Like most retailers, we saw an increase in freight costs, but were able to absorb the majority of them with higher merchandise margins while maintaining our everyday value proposition for our customers. As a result of our efforts for the third quarter, we reported adjusted net income of $164.1 million and adjusted earnings per share of $1.75. A significant milestone during the quarter was KKR completing a secondary offering selling its remaining shares of Academy Sports and Outdoors common stock. As part of this offering, we repurchased and retired 4.5 million shares for approximately $200 million as part of the company's $500 million share repurchase program. We also purchased approximately $50 million worth of shares in the open market during the third quarter, which signifies that returning capital to shareholders is one of our capital allocation priorities in addition to growing the business. Year-to-date, Academy has repurchased and retired 8.9 million shares for approximately $350 million. Looking ahead to the fourth quarter, the team's persistent hard work with our key vendors such as Nike, Adidas, Under Armour, The North Face, and Columbia has put us in a strong position to meet the expected demand for the holiday season. We're also in good shape in our private label business which makes up roughly 20% of our total sales. Overall, our inventory is 22.4% higher than prior year quarter and up 18.9% from last quarter. From a customer perspective, our stores and e-commerce platform are prepared for holiday shoppers. We've improved the in-store shopping experience, making it more fun and engaging and easier to shop with more local, tailored products and the appropriate staffing levels. We've also added features and functionality to our website and mobile app to create faster, more seamless transactions that improve conversion and customer satisfaction. We're pleased with the results of the quarter thus far, but there's still a tremendous amount of business to be done over the next several weeks. Our store teams and websites are ready to serve our customers during this final push to Christmas. Altogether, our best-in-class team, healthy inventory position, convenient and engaging sales channels paired with strong consumer demand and a rational promotional environment give us optimism about the fourth quarter. Therefore, we're raising our full-year sales and earning guidance. I'll now turn the call over to Michael to review our Q3 results and share our updated outlook. Michael?