Q2 Earnings Outperformers: Sportsman's Warehouse (NASDAQ:SPWH) And The Rest Of The Specialty Retail Stocks

November 19, 2024 at 05:10 AM EST

SPWH Cover Image

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Sportsman's Warehouse (NASDAQ: SPWH) 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.

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. This print exceeded analysts’ expectations by 1.3%. Despite the top-line beat, it was still a softer quarter for the company with a significant miss of analysts’ EBITDA and gross margin estimates.

“We continued to make substantial progress on our initiatives to reset the business and improve our overall operations; however, we were disappointed that sales and margins came in below our expectations,” said Paul Stone, Chief Executive Officer and President.

Sportsman's Warehouse pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 10.5% since reporting and currently trades at $2.32.

Read our full report on Sportsman's Warehouse 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 a solid beat of analysts’ EBITDA and gross margin estimates.

Dick's scored 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.

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 $2.55 billion, flat year on year, falling short of analysts’ expectations by 2.3%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations.

Ulta delivered the weakest full-year guidance update in the group. As expected, the stock is down 4.5% since the results and currently trades at $351.

Read our full analysis of Ulta’s results here.

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 result came in 1.8% below analysts' expectations. Overall, it was a slower quarter as it also logged full-year EPS and revenue guidance missing analysts’ expectations.

The stock is down 11.7% since reporting and currently trades at $46.50.

Read our full, actionable report on Academy Sports 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 $798.3 million, down 31.4% year on year. This result missed analysts’ expectations by 10.9%. Taking a step back, it was still a strong quarter as it logged a solid beat of analysts’ EPS estimates and an impressive 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.

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, a quarter in November) have kept 2024 stock markets frothy, 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.

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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