Q3 Rundown: Best Buy (NYSE:BBY) Vs Other Specialty Retail Stocks

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Best Buy (NYSE:BBY) 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 satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was in line.

Thankfully, share prices of the companies have been resilient as they are up 5.3% on average since the latest earnings results.

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 $9.45 billion, down 3.2% year on year. This print fell short of analysts’ expectations by 2%. Overall, it was a slower quarter for the company with a miss of analysts’ EBITDA estimates and full-year EPS guidance missing analysts’ expectations.

“In the third quarter, our teams delivered an in-line non-GAAP operating income rate on sales that were a little softer than expected,” said Corie Barry, Best Buy CEO.

Unsurprisingly, the stock is down 8.9% since reporting and currently trades at $84.76.

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

Best Q3: 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 $324.3 million, down 4.8% year on year, outperforming analysts’ expectations by 7.9%. The business had a stunning quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Sportsman's Warehouse pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 18.4% since reporting. It currently trades at $2.

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

Slowest Q3: Academy Sports (NASDAQ:ASO)

Founded in 1938 as a tire shop before expanding into fishing equipment, Academy Sports & Outdoor (NASDAQ:ASO) sells a broad selection of sporting goods but is still known for its outdoor activity merchandise.

Academy Sports reported revenues of $1.34 billion, down 3.9% year on year, falling short of analysts’ expectations by 2.9%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates and a miss of analysts’ EPS estimates.

Academy Sports delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 11.7% since the results and currently trades at $56.26.

Read our full analysis of Academy Sports’s results here.

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 $1.61 billion, up 3.1% year on year. This number beat analysts’ expectations by 1.9%. It was a strong quarter as it also logged EPS guidance for next quarter topping analysts’ expectations and a decent beat of analysts’ EBITDA estimates.

The stock is up 16.9% since reporting and currently trades at $35.90.

Read our full, actionable report on Bath and Body Works here, it’s free.

Warby Parker (NYSE:WRBY)

Founded in 2010, Warby Parker (NYSE:WRBY) designs, manufactures, and sells eyewear, including prescription glasses, sunglasses, and contact lenses, through its e-commerce platform and physical retail locations.

Warby Parker reported revenues of $192.4 million, up 13.3% year on year. This result topped analysts’ expectations by 1.2%. Overall, it was a strong quarter as it also recorded a decent beat of analysts’ EPS and EBITDA estimates.

Warby Parker pulled off the fastest revenue growth among its peers. The stock is up 37.1% since reporting and currently trades at $25.98.

Read our full, actionable report on Warby Parker here, it’s free.

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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