by Jharonne Martis.
To date, 156 of the 204 companies in our Retail/Restaurant Index have reported their EPS results for Q1 2023, representing 77% of the index. Of those companies that have reported their quarterly results, 79% announced that profits beat analysts’ expectations, while 1% delivered on-target results and 20% reported earnings that fell below estimates. The Q1 2023 blended earnings growth estimate now stands at 32.7%.
The blended revenue growth estimate for the 204 companies in this index is 4.5% for Q1 2023. Of those companies that have reported their quarterly results so far, 74% announced revenue that exceeded analysts’ expectations and the remaining 26% reported that their revenue fell below analysts’ forecasts.
Exhibit 1: Refinitiv Earnings Dashboard
Source: I/B/E/S data from Refinitiv
This week in retail
This week’s earnings have a similar tone to last week. Retailers are warning us that despite cooling inflation rates, the consumer remains cautious and continues to trade down.
Lowe’s beat its Q1 earnings and revenue estimates but missed its SSS estimate (Exhibit 2). The home improvement retailer also lowered its full-year guidance and cited lumber deflation, lower DIY discretionary sales, and unfavorable weather for weaker sales. Lowe’s reported a -4.3% comp, slightly better than Home Depot’s -4.6%.
Meanwhile, Dick’s Sporting Goods reaffirmed its previous guidance. The sporting goods company beat its earnings estimate. It reported a healthy 3.4% SSS, just missing its 3.5% estimate. On the flip side, BJ”s met earnings expectations but missed SSS, hit by accelerating inflation during Q1. The discounter also echoed the same sentiment as other retailers last week and said during its earnings call that consumers from all levels are feeling the pinch from higher prices, and want to save money.
The following chart displays estimates of earnings and same store sales expectations for retailers that are scheduled to release their Q1 2023 results this week.
Exhibit 2: Same Store Sales and Earnings Estimates–Q1 2023