by Jharonne Martis.
To date, 163 of the 204 companies in our Retail/Restaurant Index have reported their EPS results for Q1 2023, representing 80% of the index. Of those companies that have reported their quarterly results, 77% announced profits that beat analysts’ expectations, while 2% delivered on-target results and 21% reported earnings that fell below estimates. The Q1 2023 blended earnings growth estimate now stands at 33.3%.
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
This week in retail
Kohl’s posted Q1 earnings and revenue, stronger than expectations. Still, its Same Store Sales of -4.3% came in below expectations of -3.9%. The department store saw strong beauty sales; its Sephora total beauty sales rose 150% year-over-year. This is similar to Target, which saw a spike in beauty sales driven by its Ulta collaboration. Kohl’s is committed to expanding its Sephora footprint across more stores. The retailer also reaffirmed its full-year outlook.
Meanwhile, Abercrombie & Fitch beat its Q1 earnings, revenue and SSS estimates and posted a positive surprise. The mall retailer also raised its full-year guidance based on Q1 results and Q2 expectations. The retailer also said it’s reduced freight costs, which helped operating margins. Its strongest division was women’s apparel. On the flip side, Hollister missed its -4.0% SSS, with a 6.0% SSS result.
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
So far, 163 retailers have reported Q1 earnings; of this group, 110 mentioned inflation. Looking ahead to Q2 2023, 14 retailers issued negative preannouncements, while four issued positive EPS guidance so far. Of those retailers offering revenue guidance, 16 warned of disappointing results, while only seven said revenue might be better than previously expected.
Exhibit 3: Earnings and Revenue Guidance: Q2 2023
Source: I/B/E/S data from Refinitiv