Specialty Retail Stocks Q2 Recap: Benchmarking Tractor Supply (NASDAQ:TSCO)

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Tractor Supply (NASDAQ:TSCO) 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.

Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating 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.

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 print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with optimistic earnings guidance for the full year but a miss of analysts’ gross margin estimates.

“We are pleased with our second quarter EPS results that were in line with our outlook. My sincere appreciation goes out to our more than 50,000 Team Members for living our Mission and Values every day as we focus on taking care of our customers and each other. The team continued to execute extremely well, upholding the high standards we set for ourselves every day. At the halfway point of the year, we have made significant progress on our Life Out Here strategy. We continue to create more separation between us and our competition, thanks to our Team Members and the meaningful relationships they have with our customers,” said Hal Lawton, President and Chief Executive Officer of Tractor Supply.

Tractor Supply delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 13.2% since reporting and currently trades at $297.22.

Is now the time to buy Tractor Supply? Access our full analysis of the earnings results 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.

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.

Slowest Q2: 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, in line with analysts’ expectations. It was a mixed quarter as it posted a decent beat of analysts’ earnings estimates but underwhelming earnings guidance for the next quarter.

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

Read our full analysis of Petco’s results here.

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. This result was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it also recorded underwhelming earnings guidance for the full year.

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

Read our full, actionable report on Leslie's here, it’s free.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.