Specialty Retail Stocks Q2 In Review: Petco (NASDAQ:WOOF) Vs Peers

As the Q2 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 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 satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.6% below.

The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

Luckily, specialty retail stocks have performed well with share prices up 10.4% on average since the latest earnings results.

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 $1.52 billion, flat year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a decent beat of analysts’ earnings estimates but underwhelming earnings guidance for the next quarter.

Interestingly, the stock is up 54.5% since reporting and currently trades at $4.76.

Read our full report on Petco here, it’s free.

Best Q2: 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 $451.7 million, up 4.6% year on year, in line with analysts’ expectations. The business had a strong quarter with an impressive beat of analysts’ earnings estimates and full-year revenue guidance exceeding analysts’ expectations.

National Vision scored the biggest analyst estimates beat and 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 22.9% since reporting. It currently trades at $10.77.

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 $569.6 million, down 6.8% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted underwhelming earnings guidance for the full year.

The stock is down 3.3% since the results and currently trades at $2.66.

Read our full analysis of Leslie’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 $4.25 billion, up 1.5% year on year. This number met analysts’ expectations. Zooming out, it was a satisfactory quarter as it also produced optimistic earnings guidance for the full year but a miss of analysts’ gross margin estimates.

Tractor Supply had the weakest performance against analyst estimates among its peers. The stock is up 13.2% since reporting and currently trades at $297.22.

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

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