Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Dick's (NYSE: DKS) and the best and worst performers in the specialty retail industry.
Some retailers try to sell everything under the sun, while others—appropriately called Specialty Retailers—focus on selling a narrow category and aiming to be exceptional at it. Whether it’s eyeglasses, sporting goods, or beauty and cosmetics, these stores win with depth of product in their category as well as in-store expertise and guidance for shoppers who need it. E-commerce competition exists and waning retail foot traffic impacts these retailers, but the magnitude of the headwinds depends on what they sell and what extra value they provide in their stores.
The 9 specialty retail stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 1.9% on average since the latest earnings results.
Dick's (NYSE: DKS)
Started as a hunting supply store, Dick’s Sporting Goods (NYSE: DKS) is a retailer that sells merchandise for traditional sports as well as for fitness and outdoor activities.
Dick's reported revenues of $3.65 billion, up 5% year on year. This print exceeded analysts’ expectations by 1.1%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ EBITDA estimates but full-year revenue guidance slightly missing analysts’ expectations.
Dick's delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 2% since reporting and currently trades at $230.50.
Is now the time to buy Dick's? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: GameStop (NYSE: GME)
Drawing gaming fans with demo units set up with the latest releases, GameStop (NYSE: GME) sells new and used video games, consoles, and accessories, as well as pop culture merchandise.
GameStop reported revenues of $972.2 million, up 21.8% year on year, outperforming analysts’ expectations by 18.1%. The business had a stunning quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.
GameStop scored the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.5% since reporting. It currently trades at $23.01.
Is now the time to buy GameStop? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Bath and Body Works (NYSE: BBWI)
Spun off from L Brands in 2020, Bath & Body Works (NYSE: BBWI) is a personal care and home fragrance retailer where consumers can find specialty shower gels, scented candles for the home, and lotions.
Bath and Body Works reported revenues of $1.55 billion, up 1.5% year on year, in line with analysts’ expectations. It was a softer quarter as it posted EPS guidance for next quarter missing analysts’ expectations significantly and a miss of analysts’ EBITDA estimates.
As expected, the stock is down 18.3% since the results and currently trades at $25.75.
Read our full analysis of Bath and Body Works’s results here.
Sally Beauty (NYSE: SBH)
Catering to both everyday consumers as well as salon professionals, Sally Beauty (NYSE: SBH) is a retailer that sells salon-quality beauty products such as makeup and haircare products.
Sally Beauty reported revenues of $933.3 million, flat year on year. This result met analysts’ expectations. It was a very strong quarter as it also logged a solid beat of analysts’ EBITDA and EPS estimates.
Sally Beauty had the slowest revenue growth among its peers. The stock is up 45.1% since reporting and currently trades at $14.46.
Read our full, actionable report on Sally Beauty here, it’s free for active Edge members.
Sportsman's Warehouse (NASDAQ: SPWH)
A go-to destination for individuals passionate about hunting, fishing, camping, hiking, shooting sports, and more, Sportsman's Warehouse (NASDAQ: SPWH) is an American specialty retailer offering a diverse range of active gear, equipment, and apparel.
Sportsman's Warehouse reported revenues of $293.9 million, up 1.8% year on year. This number beat analysts’ expectations by 0.8%. Overall, it was a very strong quarter as it also put up an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
The stock is flat since reporting and currently trades at $2.99.
Read our full, actionable report on Sportsman's Warehouse here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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