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May 31, 2023

Q1 2023 U.S. Retail Scorecard – Update May 31, 2023

by Jharonne Martis.

To date, 180 of the 204 companies in our Retail/Restaurant Index have reported their EPS results for Q1 2023, representing 88% of the index. Of those companies that have reported their quarterly results, 76% announced profits that beat analysts’ expectations, while 2% delivered on-target results and 22% 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 4.6% for Q1 2023. Of those companies that have reported their quarterly results so far, 73% announced revenue that exceeded analysts’ expectations and the remaining 27% 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, all eyes are on department stores Macy’s and Nordstrom. Macy’s is facing difficult comparisons from last year when it reported a robust 12.8% Same Store Sales (SSS) growth and is on track to post a -5.0% SSS for Q1 2023. Similarly, revenue at Nordstrom is expected to drop 12.7% from a year-ago.

Meanwhile, Michael Kors beat both its Q1 earnings and revenue estimates. However, due to weak demand within the U.S., the retailer cut its full-year guidance.

One company to watch this week is Lululemon. The retailer is on track to post the strongest SSS this week at 14.1%. This SSS estimate is impressive, considering the difficult comparison from a year ago. Revenue is also expected to grow 19.3%.

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

Source: Eikon Workspace


So far, 180 retailers have reported Q1 earnings; of this group, 128 mentioned inflation, and 20 big box retailers discussed shrinkage. Looking ahead to Q2 2023, 20 retailers issued negative preannouncements, while four issued positive EPS guidance so far. Of those retailers offering revenue guidance, 25 warned of disappointing results, while only six said revenue might be better than previously expected.

Exhibit 3: Earnings and Revenue Guidance: Q2 2023

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


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