Academy Sports and Outdoors, Inc.

Good morning, ladies and gentlemen, and welcome to the Academy Sports and Outdoors third 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. 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 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 relief 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 risk and uncertainties include, but are not limited to, the factors identified in the earnings relief 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. As we anniversary our second year as a public company, I'm proud of the operational and organizational initiatives we've undertaken that have transformed the company and helped drive our solid financial performance. Our talented team of retail leaders have improved every aspect of our company when compared to pre-IPO Academy. including improving our merchandise planning and allocation processes, building an outstanding assortment of good, better, best products for our customers while maintaining our focus on value, significantly enhancing our e-commerce capabilities, increasing customer loyalty through the launch of the Academy credit card, modernizing our marketing along with our store experience, and meaningfully improving our financial stability. We are in excellent financial health, capable of self-funding all of our capital priorities, which include new store expansion, omnichannel growth, technology enhancements, increasing supply chain capacity, and rewarding shareholders through share repurchase and dividends. The third quarter was challenging and our reported net sales of 1.49 billion and negative 7.2% comparable sales were below our expectations. We saw sales increases in footwear and apparel, but experienced sales decline in outdoors and sports and recreation. Steve will discuss our sales results in more detail later in the call. When comparing third quarter sales to 2019, we maintain the 30% growth trend, which is in line with what we've seen year to date. We believe this is a strong indicator that our business is baseline at a much higher level post pandemic, and there is ongoing durable consumer demand for the sports and outdoors category. Looking at our third quarter profitability, Adjusted earnings per share were $1.69, which is below last year but in line with our expectations. We maintain a 35% gross margin rate with an improved mix of products, increasing merchandise margin rates, and controlling cost. We also held a double-digit EBIT margin and for the second year in a row expect to end the fiscal year with an annualized EBIT margin rate above 10%, which is one of our long-term financial goals. The freshness and in-stock position of our inventory across most of our categories is in very good shape. We believe we have the right amount of product from key partners like Nike, Adidas, and Under Armour to offer customers what they are looking for this holiday. There will likely be more promotional activity in the marketplace this holiday season, but we are prepared to be competitive with our own plan promotions as well as our everyday value positioning, which is in our plans. While we know that our customers have been under inflationary pressure and do not have the stimulus money they had last year, they are still focused on health and wellness, pursuing their hobbies, and wanting their kids to participate in their sports and activities. Our good, better, best assortment of top national brands and strong private brands available at everyday value prices allows them to continue to do that at an affordable price. As a reminder, the majority of our customers are in the middle three quintiles ranging from $50,000 to $150,000 in annual household income. There's also an ongoing population migration to our base in the South and Southeastern United States. We currently operate in some of the fastest growing markets in the country, such as Austin, Texas, Atlanta, Georgia, and Raleigh, North Carolina. We are uniquely positioned to benefit from this shift and intend to capitalize on it by executing our growth plan of opening 80 to 100 new stores between 2022 and the end of 2026. During Q3, we opened four stores in Richmond, Virginia, Atlanta, Georgia, Lexington, Kentucky, and Jeffersonville, Indiana. We have also opened three stores in Q4, one here in Houston, one in Tampa Bay, Florida, and one in a new state for us, Barbersville, West Virginia. These store openings were a mix of locations and existing adjacent, and new markets. We are measuring and analyzing the different market types and all aspects of the opening process, marketing, merchandising, localization, seasonality, and staffing to gain a better understanding of our approach and optimize our process as we open even more stores in 2023 and beyond. I want to give a big thanks to all of the team members who helped execute these successful store openings. The Academy team remains focused on executing our priorities to achieve our vision to become the best sports and outdoors retailer in the country while providing fun for all through assortment, value, and by delivering a great experience for our customers and creating value for our stakeholders. I will now turn the call over to Michael to provide more detail on our third quarter financial results, new stores, and provide an update on our 2022 guidance. Michael? Thanks, Ken, and good morning, everyone.