Jharonne Martis
August 17, 2022

Q2 2022 U.S. Retail Scorecard – Update August 17, 2022

by Jharonne Martis.

To date, 151 of the 204 companies in our Retail/Restaurant Index have reported their earnings results for Q2 2022, representing 74% of the index. Of those companies that have reported their quarterly results so far, 73% announced that profits beat analysts’ expectations, while 2% delivered on-target results and 25% reported earnings that fell below estimates. The Q2 2022 blended earnings growth estimate now stands at
-6.6%.

The blended revenue growth estimate for the 204 companies in this index is 9.0% for Q2 2022. Of those companies that have reported their quarterly results so far, 60% announced revenue that exceeded analysts’ expectations and the remaining 40% reported that their revenue fell below analysts’ forecasts.

Exhibit 1: Refinitiv Earnings Dashboard

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

This week: Q2 2022 earnings

July’s monthly retail sales came in unchanged from June. Ex-autos sales increased 0.4% against the expected decline of 0.1%. The retail sales control group added +0.8%, above market expectations of only 0.6%.

Target and Lowe’s reported Q2 earnings. Target matched its revenue estimate but missed its earnings expectation. This discount retailer was very promotional during the quarter in order to move excess inventory. As a result, it missed earnings expectations and posted a 2.6% SSS gain. Still, Target reiterated its full-year forecast and has leaner inventory levels for the second half of the year.

Meanwhile, Lowe’s beat its Q2 earnings and revenue estimates. However, it posted a -0.3% SSS, below its 2.4% SSS estimate. Like Home Depot, demand for spring merchandise was weaker than usual. Sales for DIY projects were also lower than expected. This weakness was offset by an increase in pro sales.

The following chart displays estimates of earnings and same store sales expectations for retailers that are scheduled to release their Q2 2022 results this week.

Exhibit 2: Same Store Sales and Earnings Estimates–Q2 2022
Source: Eikon Workspace

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