Q3 2020 U.S. Retail Scorecard – Update November 18, 2020

Seventy six percent of companies in our Retail/Restaurant Index have reported Q3 2020 EPS. Of the 156 companies in the index that have reported earnings to date, 89% have reported earnings above analyst expectations and 11% reported earnings below analyst expectations. The Q3 2020 blended earnings growth estimate is -10.1%.

The Q3 2020 blended revenue growth estimate is 4.4%. Seventy-eight percent have reported revenue above analyst expectations, and 22% reported revenue below analyst expectations.

Exhibit 1: Refinitiv Earnings Dashboard

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

Retail earnings this week

Target and Lowe’s posted impressive triple digit e-commerce sales. This is in line with the October retail sales results, which were primarily driven by strong online sales growth. The retailers reporting Q3 earnings this week have been strongly suggesting that this online trend will remain permanent.

For the first half of 2020, U.S. e-commerce sales jumped 29.6% YoY, and are projected to grow even further to 43.6% YoY in the second half of the year, as per Refinitiv IFR. Target said its PickUp, Drive Up and Shipt services grew over 200% in Q3, and retailers are telling us that consumers continue to consolidate trips, suggesting that consumers want a fast, efficient, safe and contactless way of shopping.

When looking at the overall retail picture, brick-and-mortar sales could continue to deteriorate. Winter weather will hurt outdoor dining, unemployment is still high and several government income support programs are scheduled to end soon.

As another wave of COVID-19 looms in the United States, the Refinitiv U.S. Retail and Restaurant Q3 earnings index is expected to show a -10.1% change, but then decline further to -23.2% in Q4.

Exhibit 2: Earnings and Same Store Sales Estimates/Results – Q3 2020

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