Q2 2020 Retail Scorecard – Update August 18, 2020

Seventy-four percent of companies in our Retail/Restaurant Index have reported Q2 2020 EPS. Of the 153 companies in the index that have reported earnings to date, 78% have reported earnings above analyst expectations, and 22% reported earnings below analyst expectations. The Q2 2020 blended earnings growth estimate is -51.5%.

 The Q2 2020 blended revenue growth estimate is -5.0%. Seventy-three percent have reported revenue above analyst expectations, and 27% reported revenue below analyst expectations.

Exhibit 1: Refinitiv Earnings Dashboard

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

Retail earnings this week

For Q2, the StarMine SmartEstimate data shows investors can expect positive surprises from both Target and Lowe’s. Target has an EPS mean forecast of $1.62 a share. However, there’s a five-star rated analyst with a historically accurate rating that published a Bold Estimate, calling for Target to report earnings of $2.04 a share, well above the mean.

The same can be said for Lowe’s. The home improvement retailer currently has an EPS mean forecast of $2.95 a share. However, there’s a five-star rated analyst with a very accurate rating that published a Bold Estimate, which is different (in this case higher) than the consensus estimate. The analyst expects Lowe’s to report earnings of $3.87 a share, almost a dollar above the mean.

Exhibit 2: Same Store Sales and Earnings Estimates/results – Week of Aug. 18, 2020

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

Meanwhile, Walmart beat its Q2 earnings, revenue and SSS estimates. The results are even more impressive when you take into consideration that it’s hired about half a million new employees, and spent about $1.5 billion on costs related to Covid-19. Its e-commerce sales grew 97% and the company is planning on launching Walmart + in order to compete with Amazon Prime.

Exhibit 3: Walmart E-commerce Sales

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