Hi, everyone. We're about to start our second session with Academy Sports, which everybody probably knows is a sporting goods and outdoor retailer with 270 total stores in 18 states. Today, we have with us Steve Lawrence, Chief Executive Officer. Steve has been in the role and on the board of directors since June 2023. We also have Carl Ford, Executive Vice President and Chief Financial Officer at Academy, and Mike Mullican, President of Academy. So thank you, everybody, for joining us today.
Thanks for having us.
Congratulations, by the way, on all the promotions to all of you. But all three of you have been with the company for a good amount of time, but I thought maybe we could start with discussing, you know, what we could expect that could change under the new leadership.
Well, you know, I think the good thing about Academy is, we worked really hard on our succession planning, and building our bench strength over the last couple of years, certainly under Ken's leadership as the prior CEO. The management team that we have has been together for a long time, and we've been—we managed through the pandemic together. So most of us have been together at least five years. So we were instrumental in creating the long range plan that we just presented back in April. So I don't see any big fundamental changes from a long range plan that we presented. You know, I think our strategy is gonna be the same.
you know, we've got three main focuses for growth: opening new stores, second is, is getting our dot com penetration up to a more reasonable level at around 15%, and then driving productivity average existing stores. That's not gonna change. I think you're gonna see us, lean into, you know, maybe, some more finite tactics around how we do some of those things. We've learned a lot around new store openings in terms of how we pace them out, what time of year works better, marketing needed for each store, et cetera. So I think you'll just see us lean more into those strategies and fine-tune those, but I don't see any big fundamental change.
Okay. Thank you for that. Maybe we could start talking about industry trends before we go into Academy-specific questions. Could you maybe talk about what you see in the sporting goods industry today, maybe versus relative to before the pandemic? And as we move beyond, you know, what we've seen in the last few years, do you think the higher level of demand for the category is sustainable over time?
Yeah, I mean, obviously, our industry went through a pretty, pretty big upheaval during 2020, 2021. And we saw elevated demand for all the categories that we carry, sports and outdoors. And, you know, we've seen it contract a little bit since coming out of the pandemic. You know, certainly when we looked at 2022, we saw it as more of a rebaselining year. And, you know, our plan was, as we got into this year, that we would- we'd see growth come back, and I think we probably didn't quite have a good beat on what's happening to the customer. And obviously, there's, there's some softness in the customer out there that, you know, the previous panel talked about. But it's still way above where it was in 2019. I mean, we're, we're tracking up about 27% versus 2019.
So we think a lot of these activities are sticky. We think people started enjoying the sports and outdoor during the pandemic, and they're, some have gone back on some of those hobbies, and we've got some categories like fishing, which are closer to where they were in 2019, still above, but, you know, closer to it. And we've got other categories like team sports, which are way outpacing where they were in 2019. So I think in general, we're gonna hold on to a lot of the volume, and I think the industry is seeing great participation, and that's gonna continue forward.
One question that we asked in the last session was, one area that we continue to see a lot of pressure on is big ticket discretionary, whether it's because the big ticket was already bought, whether it's because the consumer maybe is under a little bit of pressure. I know there's a lot of big ticket that you guys sell. Could you maybe talk about any trends that you're seeing that might be changing? If the decreases are maybe decelerating, can we expect to see any kind of stabilization there in the near term?
Yeah, you know, it's really interesting because we have a lot of categories to your point that fall in the big ticket. You know, so we've got some long replacement cycle businesses like fitness equipment, right? So if somebody bought a treadmill during the pandemic, it's not likely they're gonna come out and buy another treadmill anytime soon. And so that business has continued to be soft. We've seen other categories like kayaks and things like that start to stabilize this year. And then we've got some big ticket categories like outdoor grilling, which have been some of our best businesses. And I think there, what's really driving that is a lot of newness and innovation. So, you know, I don't think you can paint you know with one brush what's going on with big ticket. It's really different by different categories.
But one of the consistent things we've seen, this year, kind of two things that have really played out. First, customers gravitating towards value, which, you know, certainly plays in our sweet spot. We're the value provider in our space. But second, newness. If there's newness and innovation out there, and it's something that the customer doesn't have, they'll spend up for it and almost agnostic to price. And so, you know, that's what we're looking at in some of these big ticket categories that have been a little more sluggish, is how do we inject more newness in there? And obviously, we need the industry's help with that in some cases. But, newness is a way to kind of reinvigorate those categories.
Service. The service we provide there is—we've, we've added service to those areas in the store. And so we haven't waved the white flag on big ticket. If you merchandise it well, you buy it well, you provide good service, and you give great value, we've got some big ticket categories that are still growing.
Okay, that's helpful. Thank you. You mentioned value, and so I thought maybe we could talk about that a little bit since I do think it differentiates you in the marketplace. And one thing I think during your Investor Day that you talked a lot about was addressing your depth of product offerings. So the best example I heard to kind of brought my mind about what you guys were doing were in baseball gloves. That was the example where you were very good at introducing that introductory glove, but then as the child got older or got more expertise, maybe you weren't offering the same amount of product.
Curious at how you balance the idea of value with that strategy, and maybe what inning are you in in terms of this initiative, in terms of introducing new price points?
Yeah, this is something we actually started on pre-pandemic. And you know, one thing we talked with our Investor Day, that what Academy has been good at is the good level of the assortment. You know, I have three kids, and when my son started out, playing baseball, you know, T-ball, Academy's the place in our marketplace. You come buy the basketball, the gloves, you can get all that for under $100. And then the next month, when he decided, "Do you want to play baseball? I want to play soccer," I'd come in and buy the shin guards and the ball. And we're always good at that opening level, but, we didn't have the better, best end of the assortment that could really take that customer on that journey through sport.
We started building that out pre-pandemic. In the past, you know, we're talking about fielding gloves. We probably didn't sell a fielding glove over $100. Now we sell fielding gloves upwards of $300. You know, the base of the business, though, is still the value component. That's still the, the big chunk of our business. But what it's allowed us to do is kind of take that customer on that journey and not lose them or have them go to another competitor to find their goods. Now, you know, that being said, we're still, you know, not where that elite athlete's gonna look for a baseball glove, right?
We'll take you through starting out T-ball to playing in a rec league, maybe even in high school ball or traveling ball, but if you're going to play college ball, pro ball, we're probably not the place to find a baseball glove. But you know, that's the middle chunk of the business, which is the biggest piece of the business. You know, in terms of where we're at, you know, I would say middle innings, no pun intended. You know, we have different categories at different levels, right? So certainly we've built out the baseball and sporting goods assortment to a pretty good degree. Fishing is another one we've really leaned into, grilling. But other categories, like firearms, you know, are we're still, I think, building out that better-best level.
So we've got some categories that we're still working on, on that, and we think there's still opportunity there.
Maybe if we can shift to how your relationship is with the vendors, maybe with regards to this initiative or just, you know, in terms of how you think things will settle out between brands going direct versus distributing through retailers. Can you talk about what differentiates you from other retailers that may be getting back some brand distribution from the athletic brands?
Yeah, you know, I would, I would say that, I think the vendors have, you know, certainly during the pandemic with the rise in dotcom, I think vendors fell in love with the D2C business in some cases. But I think they've realized that they need a good wholesale partner as part of the mix. So we've seen a reversion to more of that. That being said, we never lost access to a lot of these brands. And I think one of the reasons for that is when you think about our positioning in the space, you know, being the value provider and being that entry point to sport, you know, a lot of our, our core, core customer is active young families.
When you talk to a Nike or an Under Armour, an Adidas, one of the reasons they really value us is because we're that place where that kid finds his first glove or gets his first soccer ball. And that, that entry point to sport and the belief that if, if the kid starts out with that brand, he's gonna take it through his life, is a very powerful thing for these brands. And so that's what we really represent to a lot of these, these companies, and that's why they really value our partnership. The other thing we also can do that a lot of other retailers can't, is we can sell them the basketball, the glove, the cleats, right? They can't, they can find the apparel, they can find everything in our store, and a lot of places don't do that.
So that's really been helpful for us. You know, it's also helped us open up inroads with new emerging brands, right? We've got, you know, big positions in brands like OOFOS that we've talked about, or Hurley, which is a smaller regional brand. You know, and we're continuing to build those out. We're, you know, always launching with new ideas like Bogg Bags. And so I think, kind of the relationship and the position we have with the market, with the vendors has been very attractive for them, and I think we're getting more and more vendors coming to us with new ideas.
That leads us to a question about market share. I think at your investor day, you talked about a $175 billion TAM. How do you think about Academy's market share position today, and the opportunity going forward? And are there any particular areas where you might be looking to gain more share?
We've consistently gained share, you know, for the past four or five years across most of our categories, really all of our categories since 2019. And look, I don't, I don't know ultimately the size of the TAM and what it'll be. We're a more diversified business, I think, than most people realize with, you know, equal parts, footwear, apparel, outdoors, sports and recreation. So, the good thing about our strategy is, with the unit growth, wherever we go, we're gonna take share. We just opened stores, a store in Indianapolis. We have two more coming in the next few months. We've got a store we just opened in Illinois. That's our second store in Illinois. So all of our new stores will create market share opportunities for us.
I'd also say we're seeing, you know, the outdoor category has been the tougher category, right?
Mm-hmm.
It's contracted back. You know, that being said, it's still way above where it was in 2019. We shared, I think, on our last earnings call, you know, our ammo business has been challenging, but it's still up almost 100% versus where it was in 2019. So it's still a very big business for us. And, we're seeing competitors pull back on that space. So we think that having that true diversified assortment, when you think about it, it's in our name. We're sports and outdoor, right?
Mm-hmm.
When you think about how many retailers really support all those categories, there's not a lot. We think having that diversified assortment and staying in the outdoor business degree we have, I think, makes us a great place to pick up more share. I think we have a really good opportunity there.
Okay, great. Michael, you mentioned unit growth as a way to capture some market share, but this is definitely, I guess, a more aggressive, newer part of your strategy, where you just announced that you're going to open 120-140 stores by 2027 with a long-term opportunity of 800 locations. So could you maybe talk to us about how prepared Academy is to embark upon this new initiative? What do you think will make Academy's offerings successful in other regions? And when entering a new region, how do you introduce the Academy brand?
Well, we're off to a pretty good start, and you asked if we're prepared for it. We've been preparing for this for many, many years. You know, we had a real estate department that we disbanded prior to the pandemic, when the company, you know, we needed to invest in, you know, improving the overall health of business, and so we disbanded the real estate department. We started building it back really in 2020 and 2021. We've been able to get talent from all over the country to come work for Academy because we're one of the few retailers that has the unit growth opportunity that we have. And for those of you in the room that aren't terribly familiar with us, we're doing well over $6 billion in revenue out of 270 stores.
We're only in 18 states. A couple of-
Two seventy-one.
271. 271, that's right. On Friday. I forgot we just opened one on Friday. That was a good opening for us. In a couple of those states, we're not even really in. Our northernmost store is Peoria, Illinois, Illinois, which we just opened a couple of weeks ago. We don't go any further west than Texas, no more further in the northeast than Virginia, which we've only got one store. So we've got an incredible unit growth opportunity. We're able to fund that growth with, with existing cash flow, which is fantastic. So even in a down year, we've been able to invest in the business and grow the business. We opened 9 stores last year. 6 of those stores aren't even a year old yet, and we're already contributing to positive cash flow. And so this is a good model.
We want to do more of it. You know, we're looking at the return on invested capital. The stores that we opened last year, we have a 20% hurdle. They'll clear that relatively easily. And so, you know, we're gonna go slow and learn as we go. This year, we've got 14 that we believe will hit 13-14. I don't see any reason why we won't get there this year, and then next year we'll accelerate from there.
And you mentioned this before, you're funding it with internal cash flow. But if it were to be a more difficult macro backdrop as we get into the next year or two, should we expect to see any kind of change in unit growth, or it was just any other-
Look, it's hard to see us slowing that down just because-
Yeah
The stores are so profitable and successful. We always evaluate as we go. That's why we're doing it at a very measured pace. But we're not investing for the next six months or the next year or the next two years. We're opening stores to be there for 15-20 years. And so we're pretty committed to the plan.
Thank you. Shifting over to inventory. A key topic has been elevated levels of inventory. Again, we talked about high-ticket discretionary categories. I think we just heard from another competitor about high inventories and outdoor that had to be worked through. You mentioned on your second quarter call that your inventory position is well positioned to support the business heading into fall and holiday. Could you maybe characterize that a little bit more for us, you know, in terms of how you're positioned? Are you happy with your in-stocks? Do you have room to chase? How should we think about that going into the end of the year?
I think we'll tag-team this one. You know, I think at a total level, we're very happy. You know, our inventory was flattish, from a dollar perspective, down 2% units. And then when you look at it on a per store basis, down 5%. Because that's one of the things, a lot of the inventory investment we put out there is to fund the new stores, right, as we're opening them up the back half of the year. But I would say inventory management has been kind of a strong suit of the team throughout the pandemic, and I think Carl's got some points on that.
I would agree. Yeah. I think if you look at what the company has done with inventory management, since all the way back to 2019, Steve got the company in February of 2019. We did our first open-to-buy together. When I look at, you know, how we manage inventory compared to then, it's really night and day. It's structural differences that that it's built on. If you look at how the category role and intents, you know, the merchandising and planning systems that we've put in place, the open-to-buy discipline, you know, seasonal product markdown, you know, discipline around that, we feel solid about where we are from an inventory position.
I think, you know, through the pandemic, we were able to keep, you know, inventory in front of the customers when there were supply chain challenges associated with the movement of goods. The same management team feels solid about where we are with inventory. You know, we're opening six new stores in the third quarter, so that per store, I think, is the way to look at it as we're ramping up units and feel good about where we are going into holiday.
It's the first time since I've been at Academy, been here almost seven years. I would say the bed's not too hard, it's not too soft, it's just right.
Mm-hmm.
You know, in 2019, we were overbought. The next two years, we were underbought as we were chasing. I think we're in the perfect spot. We're very comfortable with our inventory levels.
Okay, great. And I can't ask about inventory without bringing up a question about shrink, because that definitely, I think, in the last two quarters, has emerged as a real theme, a negative theme in retail. I think you guys were a little bit early in terms of flagging it. So maybe you could walk us through what you're seeing in terms of shrink, what's baked into your full year guide, and just any other thoughts on the subject?
Yeah, it's a topic that we get a lot of conversation about, a lot of questions about. So we started seeing elevated shrink levels in the third quarter of 2022. We take our inventories throughout the year for the stores. So really, in spring of last year, didn't see it elevated. In third quarter, there was a pronounced increases of about 40 basis points in the third quarter of last year. So, you know, how do we deal with that? You know, there's some analytics that we've leaned into. There's some technology packages, a very strong partnership with law enforcement. As it relates to going into fall... Well, first quarter was up significantly.
It was above last year, where we didn't see that elevated level of increase. It improved sequentially about 42 basis points in the second quarter compared to that first quarter. Now we're beginning to anniversary some of the things that we saw pop in the third quarter of last year, and so I don't think it's gonna be a huge tailwind, a huge headwind associated with. You know, when we take the physical inventories, we adjust the accruals going forward. We think we've got that baked into the guide, but recognizing that fall, we're up against where we already started to see it go up a bit.
I'll just, I'll expand on that. I think shrinks, you know, obviously, it's a growing problem for the industry. You know, it's insidious. It hits a couple different ways, right? It certainly, you have to write off the inventory as you lose it. We spend a lot of money and energy trying to defend against it, and then you lose sales, right? If you don't own the goods that you think you own. So, you know, we've been really focused on a kind of multi-pronged effort there. You know, Carl has shrink as one of his responsibilities, and we've been really smart about where we position high shrink categories in highly visible places. We do a lot of off-cycle counts, so that at least even if something is gone, we can replace it and get the sale back.
But, you know, it's something we really think a lot about because we don't wanna lock everything down and turn our stores into, you know, a museum where people can't touch the product, feel the product, because a lot of what we sell is experiential. So there's kind of a balance there. We will, in some cases, maybe, you know, lock some cable down if we have to. But really, having people on the floor and having people visible is kind of the antidote to that, and that's something that we're gonna focus on, is providing great customer service and making sure we got somebody there to help the customer. And that really kind of, I think, helps tamp down shrink in our stores.
And that was gonna be my final question on shrink, just as we think about... You've had the cost of just the loss of the product, but is there, you know, the incremental cost of maybe having to put more people on the floor? It sounds like maybe not, because you've already-
Well-
You have that customer service piece.
Yeah, that initiative was in place-
Yeah
You know, three or four years ago, and what we've done is removed kind of these meaningless tasks out of the store that don't have a return to them. You know, Steve comes from a merchant background, and merchants are quick to just move things around the store. If something's not working, move the sock from the back wall to the end cap, and we took a lot of that stuff out of.
We're a little more thoughtful than that.
I know you are. I know you are. I know you are. But, the point is, anything we do in the store has to have a return to it. And we took a lot of that meaningless stuff out of the store. When we schedule trucks, we make sure the trucks are on schedule and people are there to unload the truck. And when the truck's not coming, we take the labor out of the store. We've been able to invest that labor to customer-facing hours. And so our total store hours in the store are down, you know, roughly 20%-25%. We've run a 30% increase since 2019, and we've given more hours, actual more hours to the customer. And that, to your point, is the best way to control shrink-
Yeah.
is to have people out there selling and interacting with the customer. We got ahead of this a year ago. We saw the train coming down the tracks. We added all the stuff that Carl said. So we think we've taken most of the pain on shrink from a financial standpoint. You know, knock on wood, I hope we've got... That's actually brass, but that'll work, too. But I, I think from a financial standpoint, we've got this one covered, again, through all the actions that we've taken.
Okay.
But labor for us is, management of the labor has absolutely been a source of strength.
Mm-hmm. Again, just still on the topic of inventory, I think there is some concern out there that there might be some inventory build in certain pockets of sporting goods retail right now, whether it's more on the lifestyle side of footwear or maybe some softening in apparel that we've heard about during the second quarter. Academy's EDLP, could you maybe talk to us about how you manage promotions? And I think, Steve, you had said earlier that you're seeing a good response between promotions and newness, just how you balance that in the face of-
Yeah. So, what I said was value is, is kind of what they're responding to, so promotions can be a value.
Mm-hmm.
So we're, for those who are not familiar with us, we're everyday value. So about 75% of our sales come from our everyday value proposition at regular price. We take our private labels, which is about 20% of our business, and we price those at really sharp prices day in and day out. We also take some of our national brand partners, and we price those goods, T-shirts, shorts, things like that, about $5 below where the MSRP is. So we provide a great value every day on national brands as well as the private brands. We do promote.
We tend to promote around kind of the big market share time periods when, you know, you're trying to win that driveway decision and customers are coming in to shop for Mother's Day or Father's Day or back to school or holiday. That's really where we, we target a lot of our promotions. We did see promotions creep up a little bit. Starting last year, I mean, I would say through the first half of 2022, it was a pretty benign promotional environment. You know, as we got into holiday and people got back into stock, we saw promotions creep back in. That being said, it's still not back to 2019 or prior levels. That continued into spring, and we anticipate that's gonna continue through the, continue through the back half of this year.
We've got that baked in our forecast and feel like we've got a pretty good grip on it. But you'll see us be promotional and offer value that way, during holiday on a lot of those categories that are, you know, kind of in-and-out categories. You think things like game tables, ride-ons, and stuff like that, that we sell. Those tend to be the things where we're leaning into more promotion, and we lean into everyday value on more the everyday assortment we carry year-round.
Okay, I always talk about three types of promotions. The first type is where you get overbought, and you don't do your job very well, and now you've got to clear merchandise. We don't have that problem, and we've been really diligent around that. The second type is the promotions that you plan for, and we buy to those, and we've got some of those coming in the back half. Those are built into our plan. You buy for them specifically to run them. And the third is where you've got a counterpunch where, you know, other people's problems become your problems. We haven't seen, frankly, a lot of that.
We do have the flexibility in the financial plan for the rest of the year to, you know, if we see the environment becoming more promotional, we've got the flexibility to match others and do that.
Okay. That's very helpful. Thank you. I wanted to ask about margins, since Academy has seen such significant gross margin expansion, and you have this long-term goal of EBIT margins of 13.5% by 2027. A lot, I think-
We've achieved that goal, by the way.
Yeah.
We've achieved that.
You're already there. Yeah, you're already there. But could you maybe talk to us about, you know, the strategies that maybe were employed before, you know, when you were embarking on turning Academy or improving Academy before the pandemic? And what still lays ahead in terms of, again, trying to get margins higher?
Yeah. I think the things that I rattled off associated with inventory management, the flip side of that is-
... margin. So, if you, if you compare back to 2019, our margins are up about 500 basis points. If you looked at the second quarter that we just finished, our gross margin rate was about 30 basis points above last year. All of those disciplines that the leadership team put in place, I really think is the special sauce associated with the margin profile and the inventory positioning of the company. So again, a lot of systems work, a lot of localization of what we're carrying, a lot of, you know, price optimization, especially in the reg space. Prior to the leadership team getting here, you know, markdown discipline wasn't in place. So the seasonal goods, you would be carrying those in to try to sell aqua socks at a really odd time period.
And so, and it degraded the margin profile and the whole promotionality associated with needing to promote because you were overbought and because those disciplines weren't in place, I think was something that the team's been very diligent about. So from a margin profile standpoint, we just feel like those structural improvements that we've made are gonna be the discipline that carries the team. And we sit monthly with all the merchants and open to buy, and we talk really specifically about what's over the horizon associated with their business and how they're carrying their inventory.
And so, those are real structural changes that we've made, and we feel good with it, and we're happy that it's paying off now in the form of, you know, no type of reversion that we're seeing in the margin profile and actually up year over year.
I just wanna reiterate something, Carl said, because I think sometimes we get these questions where I think people associate the margin gain, because it happened during the pandemic, with the pullback in promotions across the industry. And for us, that's really not the case for us. What drove it was all the structural enhancements that Carl talked about. I mean, you know, it ends and begins with inventory management, you know, and, and we were not good managers of inventory before. We always carried way too much inventory. We're always chasing the markdowns on the backside. So putting in place better upfront buy quantifications, better markdown discipline, better allocation disciplines, all those things which are structural and, and kind of built into the DNA of the company now, is what drove that 500 basis points of improvement.
We're a different company today, right? We don't plan on going backwards against that.
Okay. And, my last question before we go into a quick lightning round. On the Q2 call, you called out strength in key back-to-school areas. As we're now in mid-September, is there any update or can you characterize the back-to-school season so far?
I'll stick with the comments I made on the call. You know, our back-to-school in the South starts a little earlier, so we did see... Generally, our back-to-school starts kinda the last two weeks of July and carries into August. You know, at the same time, what we also recognize is, and behavior we've seen this year so far, is customers coming out during those time periods when they have to shop, and they're kind of pulling back in the lulls in between.
And so once we get past back to school and start a hunt season and tailgating, you know, we kinda go into a lull until we get to holiday, and then we expect them to come back and shop again for holiday. And that's how we've modeled our forecasts and plans, and we think it's gonna play out that way.
Okay, thank you. We're asking four questions to each company, so we can get just a sense of what's going on in the world. And the first question is on the health of the consumer. Just do you see the consumer facing more headwinds or less next year compared to 2023?
I'm just trying to get through 2023.
I know.
You know, we haven't given guidance for 2024 yet. You know, I think with what we're seeing, it certainly... I don't think they're gonna have less headwinds than they're facing currently. I mean, I think inflation is still gonna be out there, although it feels like it's mitigating a little bit. I think household debt is still very high. I don't see that coming down, and you've got the added impact of potential student loan repayments, although I think it's still up in the air whether, you know, people punt on that and start paying, you know, deferring for a year. So, I think those things are all gonna be challenges. That being said, you know, we look at our value positioning in our space, and we think we're in a great place for trade-down customer, right?
We haven't seen a lot of that yet so far. We've maybe seen a little bit of us trading our customer down in lower-income customers, consulting trips, but we haven't seen trade down from other retailers into us yet, and we think we're well positioned for that. So we think that could definitely be a tailwind, particularly with our value position that we have out there.
Okay, and the second question is on share of wallet. Again, we talked about this when we were talking about big-ticket items, but is there one more important factor to drive higher spending in discretionary, specifically next year?
I think the big unlock for us is gonna be our CDP. We talked a little bit about that on our call. You know, we've had a database, a customer database. It was our customer data right now had, in the past, it resided across multiple platforms. It wasn't real time. We really couldn't speak to the customer on a one-to-one basis. And so we just implemented, at the end of Q2, a new database, and it's already giving us a lot better visibility in terms of file segmentation. We can see migration across the different segments. And I think it's really opening up our ability to be able to target market and drive more traffic into our stores and be much more personalized with our marketing messages in real time.
I mean, in the past, it would take us... You know, we could create an audience, and it might take us weeks or even months in some cases, to ask, you know, say, "Okay, we want everybody who bought a grill in the past, you know, six months to, you know, give us that list, and then we can send them a, you know, to buy some spices and rubs or a cover for the grill." It might take two months to get that back. We're getting that real time now. So I think that's gonna be a big unlock for us in terms of getting the customer to come back and shop us regularly.
Okay. Our third question is on pricing. Do you anticipate prices to be higher, lower, or just maintained next year?
Yeah, I will tell you that we, because of our value positioning in the marketplace, we really study pricing a lot and have fought very hard to maintain pricing on, we call them, KVIs, key value items. So these are touchstones for value, where customers can compare what our price is relative to the marketplace. So, you know, kind of the poster child for us, we talk about a lot, is we've got a collapsible folding chair that people take to the sidelines, right? You've probably seen those if you've ever gone to a soccer match, and it has our name on the back of it. That chair is priced at $5.99. It's been at $5.99 for at least 5 years. We've had cost pressure there. We've held onto that and have not raised that price.
We found other places to raise prices. We sell over 2 million of those a year. So, you know, we're looking at those kind of items and saying: We're not gonna raise price on those. We're looking for ways to add other new items into that. So, we launched the $99.99 gas grill this past year that we ran from Memorial Day through Fourth of July to great success. We're also looking at ways to even add new value items to that. So I think you'll see us protect price and hold price on a lot of those categories and items, and the customer knows us for. Then to Carl's point, we do have a pretty robust regular price optimization model that we can run on certain things that are less visible and less easy to kind of discern price on.
You know, if we take a crate of water up $0.20, you know, that's really not gonna stop somebody from shopping us because they're not coming in to buy the water. It's an add-on purchase at the end. But being very thoughtful about how we manage that, protecting value is gonna be key, and we're not gonna raise our prices on those visible items that are... You know, where the customer is looking to us for value.
Okay, thank you. Our last question's on destocking, which doesn't really apply to Academy, just given what you talked about with inventory before, so we can skip that one.
Okay.
With that, we are done with our fireside chat. Thank you for joining us today.
Well, thank you for having me.
Thank you for coming.
Thank you to everyone in the room.