Specialty Retail Stocks Q3 Recap: Benchmarking Dick's (NYSE:DKS)

December 26, 2024 at 04:04 AM EST

DKS Cover Image

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Dick's (NYSE: DKS) and the rest of the specialty retail stocks fared in Q3.

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 satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.5% while next quarter’s revenue guidance was in line.

Thankfully, share prices of the companies have been resilient as they are up 7% on average since the latest earnings results.

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 $3.06 billion, flat year on year. This print exceeded analysts’ expectations by 0.9%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts’ gross margin estimates but a slight miss of analysts’ EBITDA estimates.

Interestingly, the stock is up 5% since reporting and currently trades at $225.99.

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

Best Q3: 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 $324.3 million, down 4.8% year on year, outperforming analysts’ expectations by 7.9%. The business had a stunning quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Sportsman's Warehouse delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 6.1% since reporting. It currently trades at $2.30.

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

Slowest Q3: 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 $1.34 billion, down 3.9% year on year, falling short of analysts’ expectations by 2.9%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.

Academy Sports delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 15.6% since the results and currently trades at $58.21.

Read our full analysis of Academy Sports’s results here.

Sally Beauty (NYSE: SBH)

Catering to both everyday consumers as well as salon professionals, Sally Beauty (NYSE: SBH) is a retailer that sells salon-quality beauty products such as makeup and haircare products.

Sally Beauty reported revenues of $935 million, up 1.5% year on year. This result met analysts’ expectations. It was a satisfactory quarter as it also put up a decent beat of analysts’ EBITDA estimates.

The stock is down 10.1% since reporting and currently trades at $11.25.

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

Ulta (NASDAQ: ULTA)

Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ: ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.

Ulta reported revenues of $2.53 billion, up 1.7% year on year. This result topped analysts’ expectations by 1.3%. Overall, it was a very strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.

The stock is up 10.7% since reporting and currently trades at $434.80.

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

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

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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