Q3 2019 U.S. Retail Scorecard – Update

Seventy one percent of the U.S. companies in our Retail/Restaurant Index have reported Q3 2019 EPS. Of the 148 companies in the index that have reported earnings to date, 70% have reported earnings above analyst expectations, 6% reported earnings in line with analyst expectations and 24% reported earnings below analyst expectations. The Q3 2019 blended earnings growth estimate is 3.2%.

The Q3 2019 blended revenue growth estimate is 5.7%. Fifty-five percent have reported revenue above analyst expectations, and 45% reported revenue below analyst expectations.

Exhibit 1: Refinitiv Earnings Dashboard

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

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. 14, 2019

Walmart

Walmart beat earnings expectations and U.S. same store sales, while its revenue grew 2.5%. Its e-commerce sales also grew by 41%, its strongest quarter this year. The retailer raised full-year earnings guidance and continues to do a great job tying together its physical and digital stores and luring the consumer in through grocery sales.

Exhibit 3: Walmart Ecommerce Sales

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

Guidance

Walmart reported another stellar quarter, and raised its earnings guidance — a bold move in a time when most retailers are providing negative guidance.  Retailers reporting Q3 earnings are worried about Chinese tariffs and warning us not to expect much from them in the upcoming quarters. To date, there have been 22 negative EPS pre-announcements for Q4 2019 compared to 7 positive pre-announcements. Accordingly, analysts polled by Refinitiv have been lowering Q4 estimates.

Exhibit 4: Q4 2019 Guidance

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