Dive Brief:
- Academy Sports and Outdoors is utilizing Manhattan Associates’ warehouse management platform at its Jeffersonville, Georgia, distribution center in an effort to improve production, according to its fiscal Q1 2024 earnings call.
- CEO Steve Lawrence told investors the implementation of the system is “foundational” to the retailer’s pursuit of store growth and a “more powerful omnichannel” model.
- According to CFO Carl Ford, 9% of Academy’s Q1 2024 merchandise sales came via omnichannel avenues, up from 8.2% in the same quarter a year prior.
Dive Insight:
Academy is investing heavily in new stores and its omnichannel capabilities as it combats sales and income declines. The retailer reported a 1.4% year-over-year decrease in net sales in Q1 and an 18.6% dip in net income. In 2023, the company experienced year over year drops of 17% and 4% in net income and net sales, respectively, despite stronger performance in Q4.
A major element of the retailer’s attempt to be more omnichannel-focused is modernizing its supply chain, according to Ford. At the warehouse level, Academy’s Twiggs County facility — one of three distribution centers in the company’s network — had previously been its least productive, according to Ford.
“We're happy with what we're seeing coming out of there in terms of productivity,” Ford said. “And so we think that getting out of, you know, the quarter of implementation, if you will, that there's upside potential associated with DC operations.”
Lawrence said the retailer plans to convert its other two distribution centers in Katy, Texas, and Cookeville, Tennessee, to the Manhattan system as well.
“I would tell you that the Manhattan system within the distribution center space is a lot more methodical than our previous warehouse management system, and we do carry a fair amount of inventory in our distribution centers,” Lawrence told investors.
Improving production at the Georgia distribution center “is one of several supply chain initiatives” underway at Academy as it seeks to improve omnichannel capabilities, according to Lawrence.
“We expect to continue to invest in expanding and enhancing our omnichannel capabilities, including our mobile app, optimizing the web site experience and upgrading our fulfillment capabilities, which will continue to require further investments by us,” Lawrence said.
Earlier this year, Academy appointed new leaders to support its omnichannel push, naming Robert Howell its next chief supply chain officer while adding Alphabet executive Monique Picou, a 30-year industry veteran, to its board of directors. The retailer also formed a partnership with DoorDash in June for on-demand delivery to customers, further strengthening its omnichannel prowess.
Academy has also made strides in inventory handling and demand planning via recently deployed systems, according to a May 4 securities filing.
“We have coupled these tools with the data we have been able to collect from our Academy Credit Card program, our customer database and targeted customer surveys, so that we can better estimate future inventory requirements,” the filing said.
The retailer also shaved down its supply chain finance liabilities from $8.9 million at the end of Q1 2023 to $3.2 million at the end of Q1 2024.
