Specialty Retail Stocks Q2 Results: Benchmarking Best Buy Co (NYSE:BBY)
The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Best Buy Co (NYSE:BBY) and the rest of the specialty retail stocks fared in Q2.
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 7 specialty retail stocks we track reported a weaker Q2; on average, revenues were in line with analyst consensus estimates, while on average next quarter revenue guidance was 15.5% under consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable and specialty retail stocks have not been spared, with share prices down 12% since the previous earnings results, on average.
Best Buy Co (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 Co reported revenues of $9.58 billion, down 7.22% year on year, in line with analyst expectations. It was a mixed quarter for the company, with full year same-store sales and revenue guidance lowered from the company's previous outlook. However, Best Buy's profitability outlook is better, resulting in a higher full year operating margin guidance compared to the previous.
“Today we are reporting second quarter sales results that are at the high-end of the outlook we shared in May and profitability that was better than expectations,” said Corie Barry, Best Buy CEO.
Best Buy Co delivered the weakest full year guidance update of the whole group. The stock is down 6.18% since the results and currently trades at $69.5.
Best Q2: 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 $1.16 billion, up 2.45% year on year, beating analyst expectations by 1.97%. It was a decent quarter for the company, with revenue and EPS exceeding Wall Street's expectations.
GameStop scored the strongest analyst estimates beat among its peers. The stock is down 8.68% since the results and currently trades at $17.14.
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Weakest Q2: 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 $309.5 million, down 11.8% year on year, missing analyst expectations by 5.06%. It was a weak quarter for the company, with revenue and EPS coming in below Wall Street's estimates. Its full-year revenue guidance also came in significantly below analysts' expectations.
Sportsman's Warehouse had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 24.1% since the results and currently trades at $3.43.
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 $2.53 billion, up 10.1% year on year, beating analyst expectations by 1.28%. It was a good quarter for the company, with revenue and EPS exceeding analysts' estimates, driven by outperformance in same-store sales growth.
Ulta achieved the fastest revenue growth and highest full year guidance raise among the peers. The stock is down 5.87% since the results and currently trades at $398.
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 $1.56 billion, down 3.65% year on year, missing analyst expectations by 0.3%. It was a decent quarter for the company, with EPS coming in ahead of expectations and next quarter's earnings guidance also exceeding Wall Street's estimates.
The stock is down 5.32% since the results and currently trades at $33.1.
The author has no position in any of the stocks mentioned