Academy’s prior-year inventory purchases were pulled forward at pre-tariff prices. That detail helped produce a much stronger six-month cash-flow comparison, even though sales barely moved.
Revenue rose 3.0% to $1.6 billion for the six months ended Aug. 1. Gross profit climbed 15.5% to $665.9 million, pushing gross margin from 36.0% to 40.4%; operating income rose 42.9% to $246.4 million.
The catch is that the margin improvement was not entirely a regular retail operating gain. Academy said a one-time tariff refund supplied 270 basis points of gross-margin help, while tariffs still pressured merchandise margin by 120 basis points. Shrink and freight added another 40 basis points.
"The increase of 200 basis points in gross margin was primarily attributable to 270 basis points of favorability from the one-time benefit of IEEPA tariff refunds, 20 basis points of favorability related to shrink, and 20 basis points of favorability related to decreased freight, partially offset by 120 basis points of unfavorability in merchandise margin primarily as a result of tariffs and the reinvestment of tariff refunds into strategic pricing."
Academy, 10-Q filed Sept. 9, 2026.
In plain English: Academy kept more of each sales dollar, but one of the largest pieces of that improvement was a refund that does not repeat on the same terms. Management also says the company put some of that refund back into pricing, which limited the merchandise-margin benefit.
Cash generation improved more dramatically than sales. Operating cash flow rose 47.9% to $349.0 million, and the company said working capital contributed $62.7 million as last year’s inventory purchases had been pulled forward at pre-tariff rates. Income taxes payable added another $39.5 million, partly because of payment timing and a prior-year tax refund.
"The increase in cash flows from operating assets and liabilities was primarily attributable to: $62.7 million increase in cash flows from working capital due to the pull-forward of inventory purchases in the prior year period at pre-tariff rates; and $39.5 million increase in income taxes payable primarily due to deductions in the prior year period resulting from the One Big Beautiful Bill Act, timing of payments, and a tax refund received in the prior year period; partially offset by $34.3 million decrease in prepaid expenses and other current assets largely driven by litigation settlements received in the prior year period and timing of construction reimbursement payments received."
Academy, 10-Q filed Sept. 9, 2026.
That makes the cash-flow jump useful, but not a clean measure of the sales engine. Inventory reached $1.7 billion, up 4.4%, ahead of revenue growth, while accounts receivable rose 19.7%. Academy does not disclose a single cause for the receivables increase.
The balance sheet is also carrying a smaller share count into the result. Diluted shares fell 6.1%, helping diluted EPS rise 17.3% to $2.17 even as net income increased only 9.9% to $137.9 million. Interest expense also fell 5.7% for the six months after refinancing and lower rates.
The company’s longer record gives the current filing some context: annual revenue reached $6.8 billion in fiscal 2022 before falling to $5.9 billion in fiscal 2025, then recovering to $6.1 billion in fiscal 2026. The latest six-month result shows margin recovery arriving faster than top-line growth, with tariff policy sitting inside that improvement rather than outside it.
At the latest close, Academy had a $3.0 billion market capitalization and traded at 8.1 times earnings. That valuation sits beside a filing in which the earnings improvement is visible, but some of the cash and margin support comes from timing, refunds, and a smaller share base.
Academy’s next quarterly report will put the current $1.7 billion inventory balance against the next period’s sales and cash flow, which is the specific comparison this filing leaves open.
Source: Academy Sports and Outdoors 10-Q filed Sept. 9, 2026.