A Look Back at Specialty Retail Stocks' Q3 Earnings: Petco (NASDAQ:WOOF) Vs The Rest Of The Pack

Max Juang /
2024/01/15 1:26 am EST

Earnings results often give us a good indication of what direction a company will take in the months ahead. With Q3 now behind us, let’s have a look at Petco (NASDAQ:WOOF) 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 Inflation (despite slowing) has investors prioritizing near-term cash flows, but specialty retail stocks held their ground better than others, with the share prices up 5.2% on average since the previous earnings results.

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. Petco missed analyst expectations on nearly every key metric we track: revenue growth, same-store sales growth, gross margin, adjusted EBITDA, EPS, and free cash flow. We note its steep drop in GAAP operating income and EPS was thanks to a one-time $1.22 billion goodwill impairment charge.

Petco Total Revenue

The stock is down 25.9% since the results and currently trades at $2.84.

Read our full report on Petco 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 Total Revenue

National Vision scored the fastest revenue growth and highest full-year guidance raise among its peers. The stock is up 23% since the results and currently trades at $20.71.

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

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, exceeding analyst expectations by 3.1%. It was a weak quarter for the company, with underwhelming earnings guidance for the full year.

Leslie's pulled off the biggest analyst estimates beat but had the slowest revenue growth and slowest revenue growth in the group. The stock is up 11.3% since the results and currently trades at $6.48.

Read our full analysis of Leslie's'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 $3.41 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.

Tractor Supply had the weakest performance against analyst estimates among its peers. The stock is up 12.5% since the results and currently trades at $222.75.

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

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The author has no position in any of the stocks mentioned