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 Petco (NASDAQ: WOOF) 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 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 8.8% since the latest earnings results.

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. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a beat of analysts’ EPS estimates but EBITDA guidance for next quarter missing analysts’ expectations.

"Once again, we delivered on Petco's profitability goals as we continue to execute on our multi-phased transformation," said Joel Anderson, Petco's Chief Executive Officer.

Petco delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Interestingly, the stock is up 2.2% since reporting and currently trades at $3.04.

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

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, outperforming analysts’ expectations by 3%. The business performed better than its peers, but it was unfortunately a mixed quarter with an impressive beat of analysts’ revenue estimates but full-year EPS guidance missing analysts’ expectations.

National Vision delivered the fastest revenue growth and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 10.9% since reporting. It currently trades at $28.40.

Is now the time to buy National Vision? 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 46.1% since the results and currently trades at $1.94.

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 met analysts’ expectations. Zooming out, it was a mixed quarter as it also produced EPS in line with analysts’ estimates but a slight miss of analysts’ EBITDA estimates.

The stock is down 2.4% since reporting and currently trades at $53.50.

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.

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