by Jharonne Martis.
Eighty five percent of companies in our Retail/Restaurant Index have reported Q2 2021 EPS. Of the 174 companies in the index that have reported earnings to date, 86% have reported earnings above analyst expectations, 2% matched and 12% reported earnings below analyst expectations. The Q2 2021 blended earnings growth estimate is 157.9%.
The Q2 2021 blended revenue growth estimate is 24.0%. Eighty-four percent have reported revenue above analyst expectations, and 16% reported revenue below analyst expectations.
Exhibit 1: Refinitiv Earnings Dashboard
Source: I/B/E/S data from Refinitiv
Q2 2021 retail earnings
The dollar stores are facing very difficult comparisons from a year ago. As a result, Q2 2021 Same Store Sales estimates are below last year’s level but suggest that business volume is holding up well. The consumer remains value-oriented, which has benefited the discounters in Q2. The dollar stores are also a favorite destination for the back-to-school season.
Exhibit 2: Q2 2021 Same Store Sales Estimates
Despite difficult comparisons from a year ago, both dollar stores are expected to see stronger sales than their 2019 pre-pandemic levels.
Moreover, our StarMine’s SmartEstimate show that positive surprises for Dollar General might be in the offing. The SmartEstimate is a weighted average of analyst estimates, with more weight given to more recent estimates and more accurate analysts. Our studies have shown that when the SmartEstimate differs from the consensus (I/B/E/S mean) by more than 2%, the company is likely to post subsequent earnings surprises directionally correct 70% of the time. This percentage difference is referred to as Predicted Surprise (PS%).
For Q2, the SmartEstimate data shows investors can expect positive surprises from Dollar General(Exhibit below). The discounter currently has an EPS mean forecast of $2.59 a share. However, analysts polled by Refinitiv are bullish on recent initiatives the discounter has taken to add more assortment to its stores, which has resonated well with consumers.
Exhibit 4: Dollar General StarMine SmartEstimate
Here are this week’s Q2 2021 earnings and same store sales estimates:
Source: Refinitiv I/B/E/S estimates