Financial Analysis

Commitments and Contingencies Technology Related and Other Commitments As of August 1, 2026, we have obligations under technology-related, construction and other contractual commitments in the amount of $208.1 million. Of such commitments, approximately $97.9 million is payable in the next 12 months. Other Contingencies During 2025, the Company entered into an agreement to sell a portion of the rights to potential tariff relief claims (the Participation Agreement), which was determined to be accounted for under ASC 470. In February 2026, the Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (the IEEPA Tariffs). The Company applied the gain contingency model in accordance with ASC 450-30, to account for the potential refund of previously incurred costs for IEEPA Tariffs. Under this model, the gain contingency is not recognized until the gain is realized or realizable. Accordingly, the Company recognized tariff refunds as payments were received. In the 2026 second quarter, the Company received refunds of $83.7 million from CBP related to the IEEPA Tariffs, excluding interest, which were recorded as a reduction to Cost of Goods Sold on the Condensed Consolidated Statements of Income. As a result of the refunds received, $72.2 million was paid to the buyer, which is presented in Other Expense (Income), net on the Condensed Consolidated Statements of Income. The Company also recognized the $10.5 mil …

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The following table sets forth the approximate amount of sales by merchandise divisions for the periods presented (amounts in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Merchandise division sales Outdoors $ 468,630 $ 448,937 $ 895,981 $ 831,488 Sports and recreation 393,144 369,791 749,089 704,837 Apparel 451,857 451,121 800,206 783,802 Footwear 319,926 323,243 620,736 615,918 Total merchandise sales (1) 1,633,557 1,593,092 3,066,012 2,936,045 Other sales (2) 13,728 6,746 23,276 15,202 Net Sales $ 1,647,285 $ 1,599,838 $ 3,089,288 $ 2,951,247 (1) E-commerce sales represented 12.1% and 11.6% of merchandise sales for the thirteen and twenty-six weeks ended August 1, 2026, respectively, and 10.9% and 10.5% for the thirteen and twenty-six weeks ended August 2, 2025, respectively. (2) Other sales consisted primarily of credit card income from our agreement for co-branded and private label credit cards, shipping income, gift card breakage income, sales return allowance and other items.

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Share-Based Compensation On September 29, 2020, the ASO, Inc. Board of Directors adopted the 2020 Omnibus Incentive Plan (the 2020 Omnibus Incentive Plan), which provides for the grant of certain equity incentive awards (each, an Award) and became effective on October 1, 2020. The plan reserved a total of 5,150,000 shares of common stock for issuance. On June 1, 2023, our stockholders approved the First Amendment to the 2020 Omnibus Incentive Plan, which, among other changes, increased the number of shares available for issuance thereunder by 2,600,000 shares. As of August 1, 2026, there were 2,889,110 shares that were authorized and available for future issuance under the 2020 Omnibus Incentive Plan. On September 29, 2020, the ASO, Inc. Board of Directors adopted the 2020 Employee Stock Purchase Plan (the ESPP), which became effective on October 1, 2020. We have reserved a total of 2,000,000 shares and as of August 1, 2026, there were 1,271,482 shares authorized and available for future issuance under the ESPP. Equity compensation expense was $9.3 million and $20.4 million for the thirteen and twenty-six weeks ended August 1, 2026 and $7.6 million and $15.1 million for the thirteen and twenty-six weeks ended August 2, 2025, respectively. These costs are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Income. For Award grants during the periods presented, for team members that meet the age and service requirement for retire …

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Fair Value Measurements Fair value is defined as an exit price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Authoritative guidance establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of the assets and liabilities. The fair value measurements are classified as either: Level 1 which represents valuations based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 which represents valuations based on quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 which represents valuations based on prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy in which the fair value measurement is classified in i …

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Long-Term Debt Our debt consisted of the following (amounts in thousands) as of: August 1, 2026 January 31, 2026 August 2, 2025 ABL Facility, due May 2031 $ $ $ Term Loan (repaid May 2026) 85,750 87,250 2020 Notes (redeemed May 2026) 400,000 400,000 Notes, due May 2031 (issued May 2026) 500,000 Total debt 500,000 485,750 487,250 Less current maturities (3,000) (3,000) Less unamortized discount on Term Loan (227) (294) Less deferred loan costs (1) (5,842) (1,730) (2,218) Long-term debt, net $ 494,158 $ 480,793 $ 481,738 (1) Deferred loan costs are related to the Notes, Term Loan and 2020 Notes. ABL Facility Academy, Ltd., as borrower, and certain of the Companys wholly-owned subsidiaries, as guarantors, entered into an amendment to its asset-based revolving $1 billion credit facility, dated May 14, 2026 (as amended to date, the ABL Facility), with JPMorgan Chase Bank, N.A., as the administrative agent and collateral agent and other lenders party thereto. Borrowings, if any, under the ABL Facility bear interest, at our election, at the term secured overnight financing rate plus a margin of 1.25% to 1.50% or the alternative base rate plus a margin of 0.25% to 0.50%. The ABL Facility also provides a fee applicable to the unused commitments of 0.25% to 0.30%. The ABL Facility matures on May 14, 2031; however, so long as the Notes (as defined below) are outstanding and mature on or prior to the latest maturity date of the ABL Facility, the agent under the ABL Facility is permitted …

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In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. The Company is evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which requires removal of all references to prescriptive and sequential software development stages. The new guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, and should be applied on a prospective transition approach, a modified transition approach, or a retrospective transition approach. The Company is evaluating the impact of adopting ASU 2025-06 on its consolidated financial statements. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic …

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Net Sales Revenue from merchandise sales is recognized, net of sales tax, when the Companys performance obligation to the customer is met, which is when the Company transfers control of the merchandise to the customer. Store merchandise sales are recognized at the point of sale and e-commerce sales are recognized upon delivery to the customer. The following table sets forth the approximate amount of sales by merchandise divisions for the periods presented (amounts in thousands): Thirteen Weeks Ended Twenty-Six Weeks Ended August 1, 2026 August 2, 2025 August 1, 2026 August 2, 2025 Merchandise division sales Outdoors $ 468,630 $ 448,937 $ 895,981 $ 831,488 Sports and recreation 393,144 369,791 749,089 704,837 Apparel 451,857 451,121 800,206 783,802 Footwear 319,926 323,243 620,736 615,918 Total merchandise sales (1) 1,633,557 1,593,092 3,066,012 2,936,045 Other sales (2) 13,728 6,746 23,276 15,202 Net Sales $ 1,647,285 $ 1,599,838 $ 3,089,288 $ 2,951,247 (1) E-commerce sales represented 12.1% and 11.6% of merchandise sales for the thirteen and twenty-six weeks ended August 1, 2026, respectively, and 10.9% and 10.5% for the thirteen and twenty-six weeks ended August 2, 2025, respectively. (2) Other sales consisted primarily of credit card income from our agreement for co-branded and private label credit cards, shipping income, gift card breakage income, sales return allowance and other items. We sell gift cards in stores, online and in third-party retail locations. The gift car …

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Segment Information The Companys retail operations represent one operating segment and one reportable segment, which derives revenues from customers by selling full-line sporting goods and outdoor recreational products. The Companys retail stores and online selling channels sell similar products and services, use similar selling processes, and sell to similar classes of customers. See Note 1 to the consolidated financial statements for information related to the products and services offered as well as business operations. The accounting policies of the Companys single reportable segment are the same as those described in the summary of significant accounting policies in Note 2 to the consolidated financial statements. All intercompany transactions within the single reportable segment are eliminated upon consolidation. The Companys chief operating decision maker (the CODM) is the Chief Executive Officer. The CODM allocates resources and assesses performance at a Company level using consolidated net income, which is a GAAP measure, as reported on the Condensed Consolidated Statements of Income. The CODM evaluates the Company's assets as reported on the Company's Condensed Consolidated Balance Sheets. The CODM evaluates significant segment expenses and makes decisions about the retail business based on the cost of goods we sell and the selling, general, and administrative expenses needed to sell those goods as reported on the Condensed Consolidated Statements of Income. See the …

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Summary of Significant Accounting Policies The accompanying unaudited financial statements of the Company have been prepared as though they were required to be in accordance with Rule 10-01 of Regulation S-X for interim financial statements, however, they do not include all information and footnotes required by United States generally accepted accounting principles (GAAP) for complete financial statements. Certain information and footnote disclosures normally included in our annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. However, we believe that the disclosures included herein are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in the Companys Annual Report on Form 10-K for the fiscal year ended January 31, 2026, as filed with the Securities and Exchange Commission (the SEC) on March 17, 2026 (the Annual Report). The information furnished herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results of operations for the thirteen and twenty-six weeks ended August 1, 2026 are not necessarily indicative of the results that will be realized for the fiscal year ending January 30, 2027 or any other period. The balance sheet as of J …

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Subsequent Events Our management evaluated events or transactions that occurred after August 1, 2026 through September 9, 2026 (the date the consolidated financial statements were issued), and identified the following events: Quarterly Dividend On September 2, 2026, the Company's Board of Directors declared a quarterly cash dividend with respect to the fiscal quarter ended August 1, 2026, of $0.15 per share of the Company's common stock, payable on October 14, 2026, to stockholders of record as of the close of business on September 16, 2026.

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