Q4 Earnings Review: Specialty Retail Stocks Led by Sportsman's Warehouse (NASDAQ:SPWH)

Let’s dig into the relative performance of Sportsman's Warehouse (NASDAQ:SPWH) and its peers as we unravel the now-completed Q4 specialty retail earnings season.

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 mixed Q4. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.5% below.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.8% since the latest earnings results.

Best Q4: 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 $340.4 million, down 8.1% year on year. This print exceeded analysts’ expectations by 3.6%. Overall, it was a stunning quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

“We were pleased that our quarterly trends continued to improve, with same store sales down slightly at 0.5% in the fourth quarter on a year-over-year comparable 13-week basis,” said Paul Stone, President and Chief Executive Officer of Sportsman’s Warehouse.Sportsman's Warehouse Total Revenue

Sportsman's Warehouse scored the biggest analyst estimates beat of the whole group. The stock is up 52.3% since reporting and currently trades at $1.47.

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

Ulta (NASDAQ:ULTA)

Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ:ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.

Ulta reported revenues of $3.49 billion, down 1.9% year on year, outperforming analysts’ expectations by 0.8%. The business had a strong quarter with an impressive beat of analysts’ EBITDA and EPS estimates.

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Ulta Total Revenue

The market seems happy with the results as the stock is up 14% since reporting. It currently trades at $358.

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

Weakest Q4: Bath and Body Works (NYSE:BBWI)

Spun off from L Brands in 2020, Bath & Body Works (NYSE:BBWI) is a personal care and home fragrance retailer where consumers can find specialty shower gels, scented candles for the home, and lotions.

Bath and Body Works reported revenues of $2.79 billion, down 4.3% year on year, in line with analysts’ expectations. It was a slower quarter as it posted full-year EPS guidance missing analysts’ expectations.

As expected, the stock is down 30.9% since the results and currently trades at $28.42.

Read our full analysis of Bath and Body Works’s results here.

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 $1.28 billion, down 28.5% year on year. This result missed analysts’ expectations by 13.2%. All in all, it was a mixed quarter for the company.

GameStop had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 7.2% since reporting and currently trades at $27.27.

Read our full, actionable report on GameStop 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 $13.95 billion, down 4.8% year on year. This number surpassed analysts’ expectations by 2%. Aside from that, it was a satisfactory quarter as it also logged a solid beat of analysts’ EBITDA estimates but full-year EPS guidance missing analysts’ expectations.

The stock is down 28.6% since reporting and currently trades at $62.

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

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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