Academy Sports & Outdoors, Inc.ASO
Academy Sports & Outdoors, Inc. Income Taxes Disclosure
Income Taxes
The income tax provision consists of the following (amounts in thousands):
| Fiscal Year Ended | ||||||||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | ||||||||||||||||||
| Current expense: | ||||||||||||||||||||
| Federal | $ | 10,680 | $ | 62,162 | $ | 125,325 | ||||||||||||||
| State | 9,369 | 19,717 | 22,869 | |||||||||||||||||
| Foreign | 431 | 64 | 19 | |||||||||||||||||
Total current expense (a) | 20,480 | 81,943 | 148,213 | |||||||||||||||||
| Deferred expense (benefit): | ||||||||||||||||||||
| Federal | 83,590 | 36,750 | (3,395) | |||||||||||||||||
| State | 5,219 | 1,085 | (817) | |||||||||||||||||
| Foreign | — | — | (35) | |||||||||||||||||
Total deferred expense (benefit) (a) | 88,809 | 37,835 | (4,247) | |||||||||||||||||
| Income tax expense | $ | 109,289 | $ | 119,778 | $ | 143,966 | ||||||||||||||
(a) | The Company purchased $47.7 million of energy credits under the Inflation Reduction Act related to the tax year ending January 31, 2026 for a total purchase price of $44.1 million, resulting in a net tax benefit of $3.6 million during fiscal year 2025. During fiscal year 2024, the Company purchased $38.1 million of energy credits under the Inflation Reduction Act related to tax years ending February 3, 2024 and February 1, 2025 for a total purchase price of $35.8 million, resulting in a net tax benefit of $2.3 million. | |||||||||||||||||||
Income before income taxes includes the following components (amounts in thousands):
| Fiscal Year Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||||
| United States | $ | 483,419 | $ | 537,444 | $ | 662,980 | |||||||||||
| Non-U.S. | 2,638 | 781 | 176 | ||||||||||||||
| Total income before income taxes | $ | 486,057 | $ | 538,225 | $ | 663,156 | |||||||||||
A reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate is as follows (dollar amounts in thousands):
| Fiscal Year Ended | |||||||||||||||||||||||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||||||||||||||||||||||
| U.S. federal statutory tax rate | $ | 102,072 | 21.0 | % | $ | 113,027 | 21.0 | % | $ | 139,263 | 21.0 | % | |||||||||||||||||||||||
State and local income taxes, net of federal income tax rate (a) | 11,683 | 2.4 | 16,936 | 3.1 | 17,511 | 2.5 | |||||||||||||||||||||||||||||
| Foreign tax effects | |||||||||||||||||||||||||||||||||||
| Other | 735 | 0.1 | 1,751 | 0.3 | (17) | — | |||||||||||||||||||||||||||||
| Effect of cross border tax laws | (4,100) | (0.8) | (233) | — | — | — | |||||||||||||||||||||||||||||
| Tax credits | |||||||||||||||||||||||||||||||||||
| Research and development tax credits | (2,025) | (0.4) | (3,958) | (0.7) | (2,543) | (0.4) | |||||||||||||||||||||||||||||
| Other | (4,764) | (1.0) | (3,218) | (0.6) | (739) | (0.1) | |||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Share-based payment awards | 353 | 0.1 | (1,946) | (0.4) | (7,697) | (1.1) | |||||||||||||||||||||||||||||
| Other | 5,335 | 1.1 | (2,581) | (0.4) | (1,812) | (0.2) | |||||||||||||||||||||||||||||
| Effective income tax rate | $ | 109,289 | 22.5 | % | $ | 119,778 | 22.3 | % | $ | 143,966 | 21.7 | % | |||||||||||||||||||||||
(a) State taxes in Texas, Louisiana, Georgia, and Tennessee made up the majority (greater than 50 percent) of the tax effect in this category. | |||||||||||||||||||||||||||||||||||
Components of deferred tax assets and liabilities consist of the following (amounts in thousands):
| January 31, 2026 | February 1, 2025 | ||||||||||
| Deferred tax assets: | |||||||||||
| Accounts receivable | $ | 417 | $ | 643 | |||||||
| Accrued liabilities and reserves | 24,666 | 19,824 | |||||||||
| Lease liabilities | 327,724 | — | |||||||||
| Equity compensation | 8,350 | 9,934 | |||||||||
| Other | 2,146 | 1,389 | |||||||||
| Total deferred tax assets | 363,303 | 31,790 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Inventory | (6,068) | (21,199) | |||||||||
| Prepaid items | (17,318) | (15,551) | |||||||||
| Property and equipment | (49,865) | (2,048) | |||||||||
| Right-of-use assets | (287,144) | — | |||||||||
| Intangible assets | (303,615) | (249,804) | |||||||||
| Other | 53 | (3) | |||||||||
| Total deferred tax liabilities | (663,957) | (288,605) | |||||||||
| Net deferred tax liability | $ | (300,654) | $ | (256,815) | |||||||
Management evaluates the realizability of the deferred tax assets and the need for additional valuation allowances annually. As of January 31, 2026, based on current facts and circumstances, management believes that it is more likely than not that the Company will realize benefit for its gross deferred tax assets.
As of January 31, 2026, we had no unrecognized tax benefits and we do not anticipate that unrecognized tax benefits will significantly increase or decrease over the next twelve months. The Company files a consolidated federal income tax return and files tax returns in various state and local jurisdictions. The statute of limitations is open for federal and state tax audits for the tax fiscal years 2023 through 2025, and 2022 through 2025, respectively.
On July 4, 2025, an Act to provide for reconciliation pursuant to title II of H. Con. Res. 14, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was enacted into law in the United States. The OBBBA introduces significant changes to U.S. tax law, including full deductibility of qualified capital expenditures, full deductibility of domestic research and development expenditures, changes to the business interest limitation, and modifications to the international tax framework. For the fiscal year ending January 31, 2026, the Company recognized a material decrease to the current tax expense and corresponding increase to deferred tax expense that results in no net impact to the effective tax rate.
Cash paid for income taxes, net of refunds, consists of the following (amounts in thousands):
| Fiscal Year Ended | ||||||||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | ||||||||||||||||||
| U.S. federal | $ | 21,633 | $ | 69,000 | $ | 110,328 | ||||||||||||||
| U.S. state and local: | ||||||||||||||||||||
| Texas | 3,928 | 3,775 | 3,838 | |||||||||||||||||
| Tennessee | 3,143 | 2,315 | 2,131 | |||||||||||||||||
| Other | 9,099 | 13,300 | 15,820 | |||||||||||||||||
| Total U.S. state and local | $ | 16,170 | $ | 19,390 | $ | 21,789 | ||||||||||||||
| Non-U.S. | 18 | 11 | 9 | |||||||||||||||||
| Total cash paid for income taxes (net of refunds) | $ | 37,821 | $ | 88,401 | $ | 132,126 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 17, 2026 | Showing above |
| 2025 | Mar 20, 2025 | |
| 2024 | Mar 21, 2024 | |
| 2023 | Mar 16, 2023 | |
| 2022 | Mar 29, 2022 | |
| 2021 | Apr 7, 2021 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.