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 satisfactory Q1. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Luckily, specialty retail stocks have performed well with share prices up 15.3% 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 $3.17 billion, up 5.2% year on year. This print exceeded analysts’ expectations by 0.7%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but full-year EPS guidance missing analysts’ expectations.
Dick's delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 18.5% since reporting and currently trades at $206.23.
Is now the time to buy Dick's? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $249.1 million, up 2% year on year, outperforming analysts’ expectations by 4.6%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Sportsman's Warehouse delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 48.3% since reporting. It currently trades at $3.47.
Is now the time to buy Sportsman's Warehouse? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Academy Sports (NASDAQ: ASO)
Founded in 1938 as a tire shop before expanding into fishing equipment, Academy Sports & Outdoor (NASDAQ: ASO) sells a broad selection of sporting goods but is still known for its outdoor activity merchandise.
Academy Sports reported revenues of $1.35 billion, flat year on year, falling short of analysts’ expectations by 1.5%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates and a miss of analysts’ EPS estimates.
Interestingly, the stock is up 6.4% since the results and currently trades at $47.25.
Read our full analysis of Academy Sports’s results here.
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 $732.4 million, down 16.9% year on year. This print lagged analysts' expectations by 2.9%. Taking a step back, it was still a strong quarter as it logged a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ gross margin estimates.
GameStop had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 21.8% since reporting and currently trades at $23.59.
Read our full, actionable report on GameStop here, it’s free.
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 $1.42 billion, up 2.9% year on year. This number was in line with analysts’ expectations. Aside from that, it was a slower quarter as it logged EPS guidance for next quarter missing analysts’ expectations significantly and full-year EPS guidance missing analysts’ expectations.
The stock is up 8.8% since reporting and currently trades at $33.14.
Read our full, actionable report on Bath and Body Works here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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