Q4 2022 U.S. Retail Scorecard – Update Mar. 7, 2023

To date, 173 of the 201 companies in our Retail/Restaurant Index have reported their EPS results for Q4 2022, representing 86% of the index. Of those companies that have reported their quarterly results, 66% announced that profits beat analysts’ expectations, while 3% delivered on-target results and 31% reported earnings that fell below estimates. The Q4 2022 blended earnings growth estimate now stands at -21.6%.

The blended revenue growth estimate for the 173 companies that have reported is 5.7% for Q4 2022. Of those companies that have reported their quarterly results so far, 65% announced revenue that exceeded analysts’ expectations and the remaining 35% 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

One company to watch this week is Ulta Beauty. Analysts polled by Refinitiv are already bullish on the company’s performance this quarter. The consensus for Ulta’s Q4 2022 EPS is $5.65. Moreover, the Refinitiv StarMine SmartEstimate data shows investors can expect positive surprises this quarter from Ulta. This quantitative tool has proven to be very valuable and accurate to help forecast financial expectations during earnings season.

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%).

The Predicted Surprise for Ulta is 4.13%, suggesting the retailer is likely to beat the $5.65 earnings expectations and post a positive surprise. In fact, 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 Ulta to report EPS of $6.60, well above the mean.

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