Let’s dig into the relative performance of Sportsman's Warehouse (NASDAQ: SPWH) and its peers as we unravel the now-completed Q2 specialty retail earnings season.
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.
Thankfully, share prices of the companies have been resilient as they are up 6.6% on average since the latest earnings results.
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 print exceeded analysts’ expectations by 0.8%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
“I’m encouraged by the progress our team is making as we advance our transformation strategy. In the second quarter, we delivered 2.1% same store sales growth—our second consecutive quarter of positive comps—despite ongoing consumer headwinds and a tough June comparison,” said Paul Stone, President and Chief Executive Officer of Sportsman’s Warehouse.
Interestingly, the stock is up 4% since reporting and currently trades at $3.11.
Is now the time to buy Sportsman's Warehouse? Access our full analysis of the earnings results here, it’s free.
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.
GameStop delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 9.8% since reporting. It currently trades at $25.92.
Is now the time to buy GameStop? Access our full analysis of the earnings results here, it’s free.
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.
As expected, the stock is down 16.3% since the results and currently trades at $26.39.
Read our full analysis of Bath and Body Works’s results here.
Ulta (NASDAQ: ULTA)
Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ: ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.
Ulta reported revenues of $2.79 billion, up 9.3% year on year. This number topped analysts’ expectations by 4.2%. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ gross margin estimates.
Ulta scored the highest full-year guidance raise among its peers. The stock is up 1.3% since reporting and currently trades at $536.95.
Read our full, actionable report on Ulta here, it’s free.
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 $1.6 billion, up 3.3% year on year. This result lagged analysts' expectations by 0.5%. It was a slower quarter as it also logged a significant miss of analysts’ EBITDA and EPS estimates.
Academy Sports had the weakest performance against analyst estimates among its peers. The stock is down 10.1% since reporting and currently trades at $48.15.
Read our full, actionable report on Academy Sports 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.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
