Let’s dig into the relative performance of National Vision (NASDAQ:EYE) 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 4 specialty retail stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates.
While some specialty retail stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.5% since the latest earnings results.
Best Q2: National Vision (NASDAQ:EYE)
Operating under multiple brands, National Vision (NYSE:EYE) sells optical products such as eyeglasses and provides optical services such as eye exams.
National Vision reported revenues of $486.4 million, up 7.7% year on year. This print exceeded analysts’ expectations by 3.5%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS and EBITDA estimates.
“Our strong performance this quarter reflects the continued successful execution of our transformation program and the dedicated efforts of our entire National Vision team,” said Alex Wilkes, National Vision’s CEO.
National Vision pulled off the biggest analyst estimates beat and fastest revenue growth, but had the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is up 12.4% since reporting and currently trades at $27.92.
Is now the time to buy National Vision? Access our full analysis of the earnings results here, it’s free for active Edge members.
Petco (NASDAQ:WOOF)
Historically known for its window displays of pets for sale or adoption, Petco (NASDAQ:WOOF) is a specialty retailer of pet food and supplies as well as a provider of services such as wellness checks and grooming.
Petco reported revenues of $1.49 billion, down 2.3% year on year, in line with analysts’ expectations. The business had a very strong quarter with a beat of analysts’ EPS and EBITDA estimates.
The market seems happy with the results as the stock is up 18% since reporting. It currently trades at $3.81.
Is now the time to buy Petco? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Leslie's (NASDAQ:LESL)
Named after founder Philip Leslie, who established the company in 1963, Leslie’s (NASDAQ:LESL) is a retailer that sells pool and spa supplies, equipment, and maintenance services.
Leslie's reported revenues of $500.3 million, down 12.2% year on year, falling short of analysts’ expectations by 4.7%. It was a softer quarter as it posted full-year EBITDA guidance missing analysts’ expectations and a significant miss of analysts’ revenue estimates.
Leslie's delivered the highest full-year guidance raise but had the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 38.8% since the results and currently trades at $4.48.
Read our full analysis of Leslie’s results here.
Tractor Supply (NASDAQ:TSCO)
Started as a mail-order tractor parts business, Tractor Supply (NASDAQ:TSCO) is a retailer of general goods such as agricultural supplies, hardware, and pet food for the rural consumer.
Tractor Supply reported revenues of $4.44 billion, up 4.5% year on year. This number topped analysts’ expectations by 0.9%. It was a satisfactory quarter as it also produced a narrow beat of analysts’ revenue estimates.
The stock is down 9.5% since reporting and currently trades at $53.95.
Read our full, actionable report on Tractor Supply 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.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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