Academy Sports and Outdoors, Inc.

Good morning, ladies and gentlemen, and welcome to the Academy Sports and Outdoors fourth quarter fiscal 2021 results conference call. At this time, this call is being recorded and all participants are in 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 from your telephone keypad. If you require any operator assistance during the call, please press star zero. I'll 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 fourth quarter and fiscal 2021 results call. Participating on the call are Ken Higgs, Chairman, President, CEO, Michael Mulligan, Executive Vice President, CFO, 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 risks 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. Ken?

Thank you, Matt. Good morning, and thank you all for joining us today. I'm very proud to announce that Academy Sports and Outdoors delivered extraordinary results in 2021. We were able to build on the momentum of 2020 and establish a new level of sales and profitability that will be our foundation for future growth. Our ability to meet our customers' needs and achieve record results came from our multi-year strategy that will drive long-term growth and sustainable profitability. In 2021, we achieved our highest sales and profits in the company's history, while successfully navigating what has been a very dynamic environment in retail. We could not have achieved this level of success without the steadfast dedication of all the Academy Sports team members. So I want to thank and congratulate all of them for their accomplishments. Heading into the holiday quarter, we had a strong plan in place but knew we would have to execute at a high level and be adaptable to win the quarter. Our team did just that and delivered record sales with growth of 13.2% in the fourth quarter and 19.1% for fiscal 2021. Comparable sales for the fourth quarter were 13.1% and 18.9% for the full year. E-commerce sales grew 22.7% in the fourth quarter and 6.2% for the full year. All four geographical regions and our four major merchandise divisions, apparel, footwear, sports and recreation, and outdoors had positive growth during the fourth quarter and all posted double-digit sales growth for the full year. We also grew market share across all of our regions as our stores continued to attract and retain a broader and more diverse customer base. Over the past two years, millions of people have purchased home fitness and outdoor equipment, such as bikes, pickleball, fishing rods, barbecue grills, or they started hiking or camping. We believe that many people made lasting changes to their lifestyle priorities during the pandemic and will continue to enjoy these new activities and hobbies they started for many years to come. They want to have more fun. and fun is what we sell. In addition, as consumers get out to our stores and shop us more frequently, we are benefiting from the compounding effect as they discover and purchase different product categories from us. This behavior led to more transactions, higher ticket, and ultimately record sales. This is confirmation that our broad selection, price and value offering, An assortment of top brands and quality private label products is attracting and retaining customers. Steve will discuss our divisional results in more detail later in the call. We also made tremendous progress against our 2021 key business priorities. I would like to highlight a few of our notable accomplishments. For Omnichannel, we implemented improved search capabilities, increased checkout speed, added more payment options, and launched a new mobile app. We focused on delivering a seamless and fully connected omnichannel experience via phone, mobile app, and academy.com, in-store, curbside, and buy online, pick up in-store. The early results of these improvements have driven increased conversion and sales penetration rates. Approximately half of our e-commerce sales are buy online, pick up in-store, and 75% of all e-commerce sales are fulfilled through our stores, giving us a growing and profitable omnichannel business. To enhance the customer shopping experience, we focused on better service, better-looking stores, and better products. We increased our proportion of customer-facing hours in stores, reset the store layout, and improved assortments with more localized products with an emphasis on important categories and items. We also created more relevant, targeted marketing ads to increase customer engagement. In addition, as a preferred partner for many great brands, we were able to offer a wide assortment of their best-selling items for the year. Sales of each of our top three largest national brands grew approximately 25%. Overall, we increased the sales of nine of our top ten national brands double digits. These shopping enhancements led to our team members earning the highest customer service scores in Academy's history. We also continued to enhance our merchandise planning and allocation capabilities to increase our inventory efficiency and optimize our markdown strategy to increase sales, expand gross margins, We have seen significant results as over the past two years, our gross margin rate has increased by more than 500 basis points. The investments we've made in our data-driven learning systems will continue to improve our capabilities in the future for pricing and replenishment. In addition, we've taken measures to protect and strengthen our supply chain. Today, our supply chain is more flexible from stronger relationships with shipping companies and better processes that we've put in place, allowing us to get the right product in stock at the right time. The enhancements we've made across the organization help drive net earnings of $142 million in the fourth quarter and $671 million for fiscal 2021. During 2021, we also significantly improved our balance sheet by reducing our adjusted net leverage by one turn and decreasing our net share count by approximately 5% through $411 million in share repurchases. On March 3rd, 2022, we announced the initiation of a quarterly cash dividend. This marks a milestone for Academy resulting from our efforts to strengthen the balance sheet and the company's ability to generate sustainable cash flow. This dividend and existing stock repurchase program demonstrate the confidence that our board and management team have in our ability to support our growth initiatives and the future performance of our business, as well as our commitment to increasing total shareholder value. Throughout 2021, We continue to serve the communities we operate in by supporting local nonprofits and responding to crises when needed, such as providing essential supplies and monetary support when Hurricane Ida impacted communities in our footprint. We maximize our impact by supporting numerous partnerships with nonprofit and community-based organizations, including first responders and military organizations. youth sports leagues, college and professional sports teams, major outdoor associations, as well as our Academy Gives initiative. All this great work leads us into 2022 with a much higher foundation with very strong momentum as we begin an exciting new growth phase in our existing stores, omnichannel, and adding new stores and new markets. I will now turn it over to Michael to review our fourth quarter and full year financial results and to provide our outlook for 2022. Michael.