GameStop (NYSE:GME) Q2 Earnings: Leading The Specialty Retail Pack

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at specialty retail stocks, starting with GameStop (NYSE:GME).

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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 3% while next quarter’s revenue guidance was in line.

Thankfully, share prices of the companies have been resilient as they are up 7.5% on average since the latest earnings results.

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 $972.2 million, up 21.8% year on year. This print exceeded analysts’ expectations by 18.1%. Overall, it was a stunning quarter for the company with a beat of analysts’ EPS estimates.

GameStop achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. Unsurprisingly, the stock is up 18.3% since reporting and currently trades at $27.91.

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

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 $2.79 billion, up 9.3% year on year, outperforming analysts’ expectations by 4.2%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA and gross margin estimates.

Ulta achieved the highest full-year guidance raise among its peers. The market seems content with the results as the stock is up 4.8% since reporting. It currently trades at $555.99.

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

Weakest Q2: 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 $1.55 billion, up 1.5% year on year, in line with analysts’ expectations. It was a softer quarter as it posted EPS guidance for next quarter missing analysts’ expectations.

As expected, the stock is down 18.1% since the results and currently trades at $25.80.

Read our full analysis of Bath and Body Works’s results here.

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 $1.6 billion, up 3.3% year on year. This result lagged analysts' expectations by 0.5%. It was a slower quarter as it also logged a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.

Academy Sports had the weakest performance against analyst estimates among its peers. The stock is down 2.4% since reporting and currently trades at $52.30.

Read our full, actionable report on Academy Sports here, it’s free.

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 $3.65 billion, up 5% year on year. This number surpassed analysts’ expectations by 1.1%. Zooming out, it was a satisfactory quarter as it also produced a solid beat of analysts’ EBITDA estimates but full-year revenue guidance slightly missing analysts’ expectations.

Dick's had the weakest full-year guidance update among its peers. The stock is up 3.4% since reporting and currently trades at $233.75.

Read our full, actionable report on Dick's 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% in November), 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 potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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