Q4 2022 U.S. Retail Scorecard – Update Feb. 21, 2023

To date, 107 of the 201 companies in our Retail/Restaurant Index have reported their EPS results for Q4 2022, representing 53% of the index. Of those companies that have reported their quarterly results, 64% announced that profits beat analysts’ expectations, while 4% delivered on-target results and 32% reported earnings that fell below estimates. The Q4 2022 blended earnings growth estimate now stands at -22.1%.

The blended revenue growth estimate for the 201 companies in this index is 5.5% for Q4 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

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

This week: Q4 2022 earnings

Walmart and Home Depot kicked off retail earnings week with mixed results. Walmart beat its earnings, revenue and Same Store Sales (SSS) estimates. Walmart’s e-commerce also came in above its 16.3% estimate, at 17.0%. Analyst had been revising its SSS upwards throughout the fourth quarter as consumers continued to trade down in the face of rising grocery prices. Strong grocery sales helped offset the weakness of discretionary items as shoppers stick to staples. As a result, the discounter’s guidance was on the conservative side.

This is in line with the guidance other retailers are providing. So far, 107 retailers have reported Q4 earnings; of this group, 76 have discussed inflation in their earnings calls.

Likewise, Home Depot expects SSS to be flat in the current fiscal year. The home improvement retailer missed its revenue and SSS estimates. It reported a -0.3% SSS for Q4 2022, below its 0.6% SSS estimate. The last time Home Depot saw a negative SSS figure was -0.6% SSS for the first quarter ending April 2011.

The following chart displays estimates of earnings and same store sales expectations for retailers that are scheduled to release their Q4 2022 results this week.

Exhibit 2: Same Store Sales and Earnings Estimates–Q4 2022

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