As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the specialty retail industry, including National Vision (NASDAQ: EYE) 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 4 specialty retail stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.8%.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.2% since the latest earnings results.

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 $487.3 million, up 7.9% year on year. This print exceeded analysts’ expectations by 3%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ revenue estimates but full-year EPS guidance missing analysts’ expectations.

"Our strong performance this quarter demonstrates that our team’s focused execution on our initiatives is delivering results," said Alex Wilkes, National Vision’s CEO.

National Vision pulled off the fastest revenue growth and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 11.7% since reporting and currently trades at $28.60.

Read our full report on National Vision here, it’s free for active Edge members.

Best Q3: 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 $1.46 billion, down 3.1% year on year, in line with analysts’ expectations. The business performed better than its peers, but it was unfortunately a mixed quarter with a beat of analysts’ EPS estimates but EBITDA guidance for next quarter missing analysts’ expectations.

The market seems content with the results as the stock is up 3.5% since reporting. It currently trades at $3.08.

Is now the time to buy Petco? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: 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 $389.2 million, down 2.2% year on year, exceeding analysts’ expectations by 4.2%. Still, it was a slower quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and a significant miss of analysts’ EPS estimates.

Leslie's delivered the biggest analyst estimates beat but had the weakest full-year guidance update in the group. As expected, the stock is down 39.7% since the results and currently trades at $2.17.

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 $3.72 billion, up 7.2% year on year. This print was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it also recorded EPS in line with analysts’ estimates but a slight miss of analysts’ EBITDA estimates.

The stock is down 4.2% since reporting and currently trades at $52.51.

Read our full, actionable report on Tractor Supply here, it’s free for active Edge members.

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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