by Jharonne Martis.
Seventy-six percent of companies in our Retail/Restaurant Index have reported Q3 2021 EPS. Of the 153 companies in the index that have reported earnings to date, 76% have reported earnings above analyst expectations, 1% matched and 23% reported earnings below analyst expectations. The Q3 2021 blended earnings growth estimate is 29.7%.
The Q3 2021 blended revenue growth estimate is 14.6%. Sixty-seven percent have reported revenue above analyst expectations, and 33% reported revenue below analyst expectations.
EXHIBIT 1: Refinitiv Earnings Dashboard
As predicted by our StarMine data, Target and Lowe’s smashed their Q3 earnings, revenue and same store sales estimates (Exhibit 2). Still, discounters are not immune to rising inflation. Target’s costs of goods sold rose 17.4%, above expectations of 10%. However, as consumers try to avoid paying higher prices, they will more likely continue to gravitate to the discounters, a trend that will continue to benefit Walmart and Target.
For Q3, the StarMine SmartEstimate data also shows investors can expect positive surprises from Macy’s, Kohl’s, Bath & Body Works and BJ’s Wholesale. The later currently has an EPS mean forecast of $0.80 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 BJ’s Wholesale to report earnings of $0.87 a share, above the mean.
Likewise, Bath & Body Works currently has an EPS mean forecast of $0.63 a share. However, there’s a five-star rated analyst with a very accurate rating that published a Bold Estimate of $0.72 a share, above the mean.
Source: Refinitiv I/B/E/S estimates
Target’s Q3 U.S. e-commerce sales were also up 29%, above its 14.0% estimate (Exhibit 3). This is also stronger than last year’s 10.9% e-commerce growth. This shows that shoppers are spending more money on Target’s site.
This earnings season, e-commerce sales results will continue to reveal if the flight to online spending looks to become permanent or is fading.
Below are this week’s Q3 digital sales growth estimates. Please note that these retailers are also facing tough comparisons from a year ago:
Exhibit 3: E-commerce Sales Estimates/Results –Q3 2021