Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Academy Sports (NASDAQ: ASO) and its peers.

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 8 specialty retail stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 0.9% below.

While some specialty retail stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.5% since the latest earnings results.

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 $1.55 billion, down 2.2% year on year. This print fell short of analysts’ expectations by 1.8%. Overall, it was a slower quarter for the company with full-year EPS and revenue guidance missing analysts’ expectations.

"Academy continues to make progress against our strategic initiatives demonstrated by the opening of nine new stores this upcoming quarter, new omni-channel enhancements, such as Door Dash, and leveraging customer excitement around the launch of our new loyalty program. In addition, our inventory discipline drove gross margin expansion of 50 basis points and a 5% reduction in units per store," said Steve Lawrence, Chief Executive Officer.

Unsurprisingly, the stock is down 11.7% since reporting and currently trades at $46.50.

Read our full report on Academy Sports here, it’s free.

Best Q2: 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 $3.47 billion, up 7.8% year on year, outperforming analysts’ expectations by 1.1%. The business had a strong quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ gross margin estimates.

Dick's delivered the 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 15% since reporting. It currently trades at $197.26.

Is now the time to buy Dick's? Access our full analysis of the earnings results here, it’s free.

Slowest Q2: 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 $288.7 million, down 6.7% year on year, exceeding analysts’ expectations by 1.3%. Still, it was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates.

Interestingly, the stock is up 10.5% since the results and currently trades at $2.32.

Read our full analysis of Sportsman's Warehouse’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 $798.3 million, down 31.4% year on year. This print came in 10.9% below analysts' expectations. More broadly, it was actually a strong quarter as it recorded 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 up 11.8% since reporting and currently trades at $26.22.

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

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 $9.29 billion, down 3.1% year on year. This number was in line with analysts’ expectations. It was a strong quarter as it also put up an impressive beat of analysts’ EBITDA and EPS estimates.

Best Buy delivered the highest full-year guidance raise among its peers. The stock is flat since reporting and currently trades at $88.57.

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

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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