Q2 2020 U.S. Retail Scorecard – Update August 19, 2020

Seventy-six percent of companies in our Retail/Restaurant Index have reported Q2 2020 EPS. Of the 157 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 -47.6%.

 The Q2 2020 blended revenue growth estimate is -4.0%. 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

In our note yesterday, the SmartEstimate data showed that investors could expect positive surprises from both Target and Lowe’s. The Refinitiv data was right. Likewise, for Q2, the SmartEstimate data shows investors can expect positive surprises from Dick’s Sporting Goods, Hibbett Sports and Dollar General next week.

Health and wellness are a top priority for consumers. They are not just only shopping at discounters and fixing their homes. Dick’s Sporting Goods currently has a 6.6% SSS estimate, and an EPS mean forecast of $1.10 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. Analysts don’t usually stick out their necks like this. The analyst polled by Refinitiv expects DKS to report earnings of $2.23 a share, more than a dollar above the mean.

Target and Lowe’s smashed their financial estimates. Target and Walmart are giving Amazon competition with growing e-commerce sales. Target gained $5 million in market share from department and apparel stores, two sectors that are expected to see negative earnings for the year. Meanwhile, Target saw growth in apparel sales boosted by stimulus checks.

Exhibit 2: Same Store Sales and Earnings Estimates/results – August 2020

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