November 19, 2019

Q3 2019 U.S. Retail Scorecard – Update Nov. 19, 2019

by Jharonne Martis.

Seventy four percent of companies in our Retail/Restaurant Index have reported Q3 2019 EPS. Of the 154 companies in the index that have reported earnings to date, 69% have reported earnings above analyst expectations, 6% reported earnings in line with analyst expectations and 25% reported earnings below analyst expectations. The Q3 2019 blended earnings growth estimate is 3.4%.

The Q3 2019 blended revenue growth estimate is 5.7%. 54% have reported revenue above analyst expectations, and 46% reported revenue below analyst expectations.

Exhibit 1: Refinitiv Earnings Dashboard

Source: I/B/E/S data from Refinitiv

Retail Earnings This Week

Home Depot beat its Q3 earnings estimate, but missed on revenue and SSS. The retailer said it continues to see a strong and engaged customer, and that both ticket and transaction were up from last year. They lowered guidance because of significant and long-term investments. Online sales grew 22% for Q3 from a year-ago, and over 50% of their online U.S. orders were picked up in our store – underlining the importance for the retailer to “serve customers in an interconnected way.” (Source: Home Depot Inc. earnings call, 11/19/19).

Meanwhile, Kohl’s missed Q3 expectations because of warmer than usual weather, and an increasing competitive promotional environment. This underlines that the value proposition is key to the consumer right now. Hence, TJX’s strong Q3 results as they continue to offer designer clothing for less. TJX also raised their full-year guidance.

Here are the Same Store Sales and Earnings estimates for retailers reporting earnings this week:

Exhibit 2: Same Store Sales and Earnings Estimates/Results – Week Of Nov 18, 2019

 

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