The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how specialty retail stocks fared in Q1, starting with Bath and Body Works (NYSE:BBWI).
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 6.7% on average since the previous earnings results.
Bath and Body Works (NYSE:BBWI) Spun off from L Brands (NYSE:BBWI) 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 $1.38 billion, flat year on year, exceeding analysts' expectations by 1.3%. Overall, it was an ok quarter for the company with an impressive beat of analysts' earnings estimates but underwhelming earnings guidance for the full year.
Gina Boswell, CEO of Bath & Body Works, commented, “We delivered a better-than-expected start to the year with net sales and earnings per share above the high-end of our guidance range. We are particularly excited with the success of our product introductions and newness, which drove the performance of both our core business and new adjacencies. Our focus on building strong brand awareness and engagement is delivering greater customer retention and loyalty. With our strong start to the year, we are pleased to narrow our full-year guidance range while raising the midpoint for both the top- and bottom-lines. I am proud of the way our team is executing on our strategic initiatives, and looking ahead, we remain confident in our ability to deliver long-term profitable growth.”
The stock is down 25% since reporting and currently trades at $38.88.
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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 pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 10.8% since reporting. It currently trades at $215.99.
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 estimates.
As expected, the stock is down 37.9% since the results and currently trades at $2.36.
Sally Beauty (NYSE: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, in line with analysts' expectations. Overall, it was a slower quarter for the company with a miss of analysts' earnings estimates.
The stock is up 6.2% since reporting and currently trades at $11.49.
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 $2.73 billion, up 3.5% year on year, in line with analysts' expectations. Taking a step back, it was a slower quarter for the company with underwhelming earnings guidance for the full year and full-year revenue guidance missing analysts' expectations.
Ulta had the weakest full-year guidance update among its peers. The stock is up 1.9% since reporting and currently trades at $393.25.
This content was originally published on Stock Story
