Q3 2023 U.S. Retail Scorecard – Update Nov. 22, 2023

To date, 177 of the 205 companies in our Retail/Restaurant Index have reported their EPS results for Q3 2023, representing 86% of the index. Of those companies that have reported their quarterly results, 69% announced profits that beat analysts’ expectations, while 4% delivered on-target results and 27% reported earnings that fell below estimates. The Q3 2023 blended earnings growth estimate now stands at 27.7%.

The blended revenue growth estimate for the 205 companies in this index is 4.3% for Q3 2023. Of those companies that have reported their quarterly results so far, 59% announced revenue that exceeded analysts’ expectations and the remaining 41% reported that their revenue fell below analysts’ forecasts.

Exhibit 1: LSEG Proprietary Research Restaurant & Retail Dashboard – Q3 2023

Source: LSEG I/B/E/S

This week in retail

Lowe’s beat its Q3 earnings but missed on revenue and SSS estimates. The retailer posted a 12.8% decline in revenue from a year ago, and the -7.4% Q3 SSS result is worse than its -5.0% final estimate. The home improvement retailer lowered its full-year earnings and sales outlook. Demand for home improvement merchandise remains soft, after receiving a boost during the pandemic. Accordingly, sales have slowed down.

The department stores also remain under pressure. Both Kohl’s and JW Nordstrom said that demand remains soft due to a price-sensitive consumer dealing with higher prices.

On the flip side, Abercrombie raised its full-year guidance, after posting two consecutive quarters of strong SSS. The teen retailer also beat its Q3 earnings and revenue, and reported a robust 16% SSS, above its 11.3% SSS estimate. Abercrombie also said it saw a healthy start to the holiday season sales. The strength at Abercrombie shows that consumers are being picky about where they are spending their money.

Similarly, Dick’s Sporting Goods had another strong earnings quarter and also raised its full-year guidance. Meanwhile, Urban Outfitters received a boost from both Free People and Anthropology’s robust 22.5% and 13.2% SSS results.

Here are the Q3 2023 earnings and same store sales estimates for the companies reporting this week:

Exhibit 2: Same Store Sales and Earnings Estimates–Q3 2023

Source: LSEG I/B/E/S