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Specialty Retail Stocks Q1 Teardown: Leslie's (NASDAQ:LESL) Vs The Rest


Max Juang /
2024/07/09 3:39 am EDT

Looking back on specialty retail stocks' Q1 earnings, we examine this quarter's best and worst performers, including Leslie's (NASDAQ:LESL) 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 Q1; on average, revenues missed analyst consensus estimates by 1.7%. while next quarter's revenue guidance was 0.5% above consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and specialty retail stocks have had a rough stretch, with share prices down 5.9% on average since the previous earnings results.

Slowest Q1: 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 $188.7 million, down 11.4% year on year, falling short of analysts' expectations by 6.1%. It was a weak quarter for the company, with a miss of analysts' gross margin estimates.

Leslie's Total Revenue

Leslie's achieved the highest full-year guidance raise but had the weakest performance against analyst estimates and weakest performance against analyst estimates of the whole group. The stock is down 31% since the results and currently trades at $3.23.

Read our full report on Leslie's here, it's free.

Best Q1: 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 $1.53 billion, down 1.7% year on year, outperforming analysts' expectations by 1.1%. It was a decent quarter for the company, with optimistic earnings guidance for the next quarter but a miss of analysts' earnings estimates.

Petco Total Revenue

Petco achieved the biggest analyst estimates beat among its peers. The stock is up 34.1% since the results and currently trades at $3.3.

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

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 $542.5 million, up 4.2% year on year, falling short of analysts' expectations by 1.8%. It was a slower quarter for the company, with underwhelming earnings guidance for the full year and a miss of analysts' gross margin estimates.

National Vision pulled off the fastest revenue growth in the group. The stock is down 27.8% since the results and currently trades at $12.91.

Read our full analysis of National Vision'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 $3.39 billion, up 2.9% year on year, falling short of analysts' expectations by 0.1%. It was a mixed quarter for the company, with a miss of analysts' gross margin estimates and underwhelming earnings guidance for the full year.

Tractor Supply had the weakest full-year guidance update among its peers. The stock is up 1.1% since the results and currently trades at $261.02.

Read our full, actionable report on Tractor Supply here, it's free.

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