Specialty Retail Stocks Q3 Recap: Benchmarking Tractor Supply (NASDAQ:TSCO)
Looking back on specialty retail stocks' Q3 earnings, we examine this quarter's best and worst performers, including Tractor Supply (NASDAQ:TSCO) 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 weaker Q3; on average, revenues were in line with analyst consensus estimates Valuation multiples for growth stocks have reverted to their historical means after reaching highs in early 2021, but specialty retail stocks held their ground better than others, with the share prices up 5% on average since the previous earnings results.
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 $3.41 billion, up 4.3% year on year, falling short of analyst expectations by 1.7%. It was a slower quarter for the company, with full-year revenue guidance missing analysts' expectations.
“We delivered solid growth in both net sales and earnings in the third quarter, although our sales performance was softer than our expectations. Given this environment, we have updated our outlook for the year to reflect continued unfavorable seasonal category performance and discerning consumer spending. Our consistent market share expansion and positive customer trends underscore the enduring strength of our business. We are confident in our ability to navigate in the near-term and remain as excited as ever about our bright future. I would like to thank our team for their dedication to our Mission and Values, as this continues to be the key to our customers’ strong loyalty,” said Hal Lawton, President and Chief Executive Officer of Tractor Supply.
Tractor Supply delivered the weakest performance against analyst estimates of the whole group. The stock is up 16% since the results and currently trades at $229.64.
Is now the time to buy Tractor Supply? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $532.4 million, up 6.6% year on year, outperforming analyst expectations by 1.1%. It was a strong quarter for the company, with an impressive beat of analysts' earnings estimates and optimistic earnings guidance for the full year.
National Vision pulled off the fastest revenue growth and highest full-year guidance raise among its peers. The stock is up 16.4% since the results and currently trades at $19.61.
Is now the time to buy National Vision? Access our full analysis of the earnings results here, it's free.
Weakest 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 $1.49 billion, down 0.5% year on year, falling short of analyst expectations by 1.3%. It was a weak quarter for the company, with underwhelming earnings guidance for the full year and a miss of analysts' gross margin estimates.
The stock is down 31.4% since the results and currently trades at $2.63.
Read our full analysis of Petco's results here.
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 $432.4 million, down 9.1% year on year, surpassing analyst expectations by 3.1%. It was a weak quarter for the company, with underwhelming earnings guidance for the full year and a miss of analysts' gross margin estimates.
Leslie's scored the biggest analyst estimates beat but had the slowest revenue growth and slowest revenue growth among its peers. The stock is up 19.1% since the results and currently trades at $6.93.
Read our full, actionable report on Leslie's here, it's free.
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The author has no position in any of the stocks mentioned
