Q2 2022 U.S. Retail Scorecard – Update August 30, 2022

To date, 185 of the 204 companies in our Retail/Restaurant Index have reported their earnings results for Q2 2022, representing 91% of the index. Of those companies that have reported their quarterly results so far, 74% announced that profits beat analysts’ expectations, while 2% delivered on-target results and 24% reported earnings that fell below estimates. The Q2 2022 blended earnings growth estimate now stands at -5.8%.

The blended revenue growth estimate for the 204 companies in this index is 9.2% for Q2 2022. Of those companies that have reported their quarterly results so far, 61% announced revenue that exceeded analysts’ expectations and the remaining 39% reported that their revenue fell below analysts’ forecasts.

Exhibit 1: Refinitiv Earnings Dashboard

This week: Q2 2022 earnings

Most retailers continue to beat Q2 earnings and revenue. For instance, Best Buy beat its Q2 earnings, revenue and Same Store Sales estimates, however, its revenue dropped 12.8% as consumers continue to pull back on spending due to inflation. The electronics retailer said, “In addition, we expected to see some impact to our business as customers broadly shifted their wallet spend back into experience areas, such as travel and entertainment. We did not expect and compounding these impacts is a changing macro environment where consumers are dealing with sustained and record high levels of inflation in some of the most fundamental parts of their daily lives, like food.” (Source: Best Buy Q2 2023 Earnings Call)

This is in line with our Refinitiv data which shows that the Hotels, Restaurants and Leisure sector is expected to see the strongest growth rates for 2022.

All eyes are on Lululemon’s Q2 earnings report this week. The athletic-wear retailer has been raising its prices and passing them onto the consumer. Last quarter, the retailer said that demand remained intact despite its price increases. Refinitiv forecasts a 13.1% growth in Q2 earnings, and 22.2% revenue growth.

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