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 Academy Sports (NASDAQ: ASO) 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% on average since the latest earnings results.

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. This print fell short of analysts’ expectations by 1.5%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.

“During the first quarter we saw continued progress across our strategic initiatives, including the opening of five new stores, and the biggest brand launch in the Company's history with the addition of the Jordan Brand,” said Steve Lawrence, Chief Executive Officer.

Interestingly, the stock is up 14% since reporting and currently trades at $50.64.

Read our full report on Academy Sports 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 an impressive beat of analysts’ EBITDA estimates.

Sportsman's Warehouse pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 43.2% since reporting. It currently trades at $3.35.

Is now the time to buy Sportsman's Warehouse? Access our full analysis of the earnings results 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, in line with analysts’ expectations. It was a slower quarter as it posted EPS guidance for next quarter missing analysts’ expectations significantly and full-year EPS guidance missing analysts’ expectations.

Interestingly, the stock is up 8.5% since the results and currently trades at $33.06.

Read our full analysis of Bath and Body Works’s results here.

Best Buy (NYSE: BBY)

With humble beginnings as a stereo equipment seller, Best Buy (NYSE: BBY) now sells a broad selection of consumer electronics, appliances, and home office products.

Best Buy reported revenues of $8.77 billion, flat year on year. This number met analysts’ expectations. Overall, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ EBITDA estimates.

Best Buy delivered the highest full-year guidance raise among its peers. The stock is flat since reporting and currently trades at $71.66.

Read our full, actionable report on Best Buy here, it’s free.

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 missed analysts’ expectations by 2.9%. Zooming out, it was actually a strong quarter as it produced an impressive beat of analysts’ EPS estimates and a solid 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 22.5% since reporting and currently trades at $23.40.

Read our full, actionable report on GameStop 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 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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