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Specialty Retail Stocks Q1 Teardown: GameStop (NYSE:GME) Vs The Rest


Petr Huřťák /
2024/06/28 4:52 am EDT

As the Q1 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers in the specialty retail industry, including GameStop (NYSE:GME) 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 9 specialty retail stocks we track reported a slower Q1; on average, revenues missed analyst consensus estimates by 1.4%. 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 8.2% on average since the previous earnings results.

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 $881.8 million, down 28.7% year on year, falling short of analysts' expectations by 11.4%. From a fundamental perspective, this was a bad quarter for GameStop. Its revenue and EPS missed analysts' expectations, and it didn't share an outlook for the rest of the year.

GameStop Total Revenue

GameStop delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 45.5% since the results and currently trades at $25.34.

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

Best Q1: 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 $3.02 billion, up 6.2% year on year, outperforming analysts' expectations by 2.7%. It was a strong quarter for the company, with optimistic earnings guidance for the full year and a decent beat of analysts' earnings estimates.

Dick's Total Revenue

Dick's achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 11.8% since the results and currently trades at $217.9.

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

Weakest Q1: 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 $244.2 million, down 8.7% year on year, falling short of analysts' expectations by 1.6%. It was a weak quarter for the company, with a miss of analysts' earnings and gross margin estimates.

The stock is down 30.5% since the results and currently trades at $2.64.

Read our full analysis of Sportsman's Warehouse'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 $908.4 million, down 1.1% year on year, falling short of analysts' expectations by 0.3%. It was a slower quarter for the company, with a miss of analysts' earnings estimates.

The stock is down 1.8% since the results and currently trades at $10.63.

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

Best Buy (NYSE:BBY)

With humble beginnings as a stereo equipment seller, Best Buy (NYSE:BBY) now sells a broad selection of consumer electronics, appliances, and home office products.

Best Buy reported revenues of $8.85 billion, down 6.5% year on year, falling short of analysts' expectations by 1.3%. It was an ok quarter for the company, with a decent beat of analysts' earnings estimates but underwhelming earnings guidance for the full year.

Best Buy delivered the highest full-year guidance raise among its peers. The stock is up 17.4% since the results and currently trades at $84.37.

Read our full, actionable report on Best Buy here, it's free.

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