Specialty Retail Stocks Q1 Teardown: Petco (NASDAQ:WOOF) Vs The Rest

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Petco (NASDAQ:WOOF) and the best and worst performers in the specialty retail industry.

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 mixed Q1. As a group, revenues missed analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was in line.

Luckily, specialty retail stocks have performed well with share prices up 10.5% on average since the latest earnings results.

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 $1.49 billion, down 2.3% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

"We are pleased to deliver first quarter earnings results ahead of our guidance and to reaffirm our outlook for fiscal 2025 which now incorporates the impact of tariffs. This performance is a testament to the execution of our nearly 30,000 team members and the resilience of the category in which we operate," said Joel Anderson, Petco's Chief Executive Officer.

Unsurprisingly, the stock is down 18.1% since reporting and currently trades at $2.99.

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

Best Q1: 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 $510.3 million, up 5.7% year on year, outperforming analysts’ expectations by 1.5%. The business had a very strong quarter with full-year EPS guidance exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.

National Vision scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 90.9% since reporting. It currently trades at $25.45.

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

Weakest Q1: 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 $3.47 billion, up 2.1% year on year, falling short of analysts’ expectations by 1.9%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and full-year EPS guidance missing analysts’ expectations significantly.

Tractor Supply delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 12% since the results and currently trades at $56.73.

Read our full analysis of Tractor Supply’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 $177.1 million, down 6.1% year on year. This number missed analysts’ expectations by 4%. Overall, it was a slower quarter as it also recorded a miss of analysts’ EBITDA estimates and a slight miss of analysts’ gross margin estimates.

Leslie's had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 42.9% since reporting and currently trades at $0.40.

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

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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

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