Academy Sports and Outdoors, Inc.

Good morning, ladies and gentlemen, and welcome to the Academy Sports and Outdoors second quarter fiscal 2022 results 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 question. To ask your question during the call, please press star one on your telephone keypad. If you require any operator assistance during the call, please press star zero on your telephone keypad. 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 second quarter 2022 financial results call. Participating on the call are Ken Hicks, Chairman, President, and CEO, Michael Mulliken, Executive Vice President and 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 SEC filings. The company undertakes no obligation to revise any forward-looking statements. Today's remarks also refer to certain non-GAAP financial measures. Reconciliations to the most comparable GAAP measures are included in today's earnings release, which is available at investors.academy.com. Unless otherwise noted, comparisons are to 2021, with 2019 comparisons also provided where appropriate to benchmark performance given the impact of the pandemic in 2020 and 2021. I will now turn the call over to our CEO, Ken Hicks.

Thank you, Matt. Good morning, and thank you all for joining us today. Our performance this quarter was in line with our expectations. We remain confident that the durability of our strong assortments and everyday value model positions us well to deliver consistent sales and profitability growth going forward. This growth is supported by operational excellence, healthy inventory levels, a strong balance sheet, new store expansion, and omnichannel advancement. The Academy team remains focused on executing our priorities to achieve our vision of becoming the best sports and outdoors retailer in the country, while delivering a great experience for our customers and creating value for our stakeholders. Part of our plan to achieve this vision is by expanding our footprint and bringing more fun to the rest of the country. I'm excited to announce we opened our second store of 2022 in Panama City, Florida, during the second quarter. It is our first location in this market and our 13th store in Florida. So far in the third quarter, we've opened two additional stores, one in Richmond, Virginia, a new market for us, and another one in Atlanta, Georgia, an existing market we continue to build out. These stores bring our total open so far this year to four stores, with five more expected to come in 2022. While it is early, the new stores open in 2022 are overall exceeding our initial sales expectations, which is a good indication that customers are drawn to our broad assortment of top national and high-quality private brands at an everyday value. thanks to all of the team members who helped execute these highly successful store openings. We're excited to be in a growth mode and expect to open nine new stores this fiscal year and 80 to 100 stores over the next five years. Academy stores have the highest store productivity in our peer group, making our new stores a compelling use of our capital with a high return on investment. As I mentioned on the last call, our expansion plans consist of three distinct opportunities. First is building scale in existing, fast-growing markets like Atlanta, Georgia, where we've opened two new stores in the past four months and now have 12 locations. Second is expanding into adjacent markets like Panama City, Florida, where we just opened, and Lexington, Kentucky, where we will open a store later this fall. And third, is opening in new markets such as Richmond, Virginia, where we open in mid-August, and West Virginia later this year. As we continue to expand the store base over time, we believe this will increase brand awareness, leading to market share gains as well as omnichannel growth due to our high penetration of buy online, pick up in store sales. I'll now provide a high-level overview of our second quarter results. The quarter presented similar macroeconomic challenges as the first quarter, and the team demonstrated once again their ability to perform in a tough environment. Our reported sales and negative 6% comp versus last year's were in line with our expectations. These results were a strong 36% sales increase versus 2019 through the second quarter as the business continued to substantially outperform our pre-pandemic levels of sales and profits. Our best customers have remained resilient throughout the challenging economic environment, while our value offering continues to resonate. We expect the sales trend compared to 2019 to hold for the remainder of 2022. While each of our four merchandise divisions, sports and recreation, footwear, apparel, and outdoors saw a decrease in their year-over-year sales when compared to the second quarter of 2019. Each merchandise division grew by at least 20%, with outdoors and sports and recreation each increasing by more than 45% over 2019. This highlights the fact that each of our merchandise divisions remains substantially higher than pre-pandemic levels. Steve will discuss our merchandise results in more detail later in the call. During the quarter, we were very pleased with our positive e-commerce sales performance, which grew 12% versus last year. We continue to invest in technology to accelerate our omnichannel growth and create a seamless, engaging customer experience. For example, we've added new mobile payment options like Google Pay and Apple Pay and 4, and we will be launching store wayfinding on our app later this year. We will continue to invest in and deploy technology across our stores, omnichannel and supply chain to enhance the customer experience. These investments are yielding strong results as we continue to see our omnichannel business grow, store productivity increase, inventory assortment and in-stocks improve, and our customer survey scores at record levels. Our adjusted earnings per share were $2.30. This was driven by our ability to sustain our gross margin rate above 35% and effectively control cost. Our gross margin rate is expected to remain in line with our full year guidance, leading to strong cash flow generation and profit growth. Looking ahead to the third quarter and the remainder of the year, we had a good back-to-school season, and expect comparable sales to continue to sequentially improve as we go through tailgating, hunting, and fall sports and move into the holidays. As I have stated before, Academy Sports and Outdoors is a different company from four years ago and is poised to utilize its operational excellence and strong balance sheet to profitably grow through new store expansion and omnichannel growth. I'll now turn the call over to Michael to provide more details on our second quarter financial results, discuss our capital allocation efforts, and provide an update on our 2022 guidance. Michael?