Q2 2021 U.S. Retail Scorecard – Update August 25, 2021

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

Source: Refinitiv I/B/E/S

Despite difficult comparisons from a year ago, both dollar stores are expected to see stronger sales than their 2019 pre-pandemic levels.

Exhibit 3: Revenue and Net Income: 2019 – 2021

Source: Refinitiv I/B/E/S

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

Source: Refinitiv Eikon

Here are this week’s Q2 2021 earnings and same store sales estimates:

Exhibit 5: Same Store Sales and Earnings Estimates–Q2 2021

Source: Refinitiv I/B/E/S estimates