Q4 2023 U.S. Retail Scorecard – Update Feb. 26, 2024

To date, 138 of the 204 companies in our Retail/Restaurant Index have reported their EPS results for Q4 2023, representing 68% of the index. Of those companies that have reported their quarterly results, 67% announced profits that beat analysts’ expectations, while 4% delivered on-target results and 29% reported earnings that fell below estimates. The Q4 2023 blended earnings growth estimate now stands at 32.9%.

The blended revenue growth estimate for the 204 companies in this index is 4.6% for Q4 2023. Of those companies that have reported their quarterly results so far, 57% announced revenue that exceeded analysts’ expectations and the remaining 43% reported that their revenue fell below analysts’ forecasts.

Exhibit 1: LSEG Earnings Dashboard

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

Guidance

So far, 138 retailers have reported Q4 earnings; of this group, 77 mentioned inflation. Looking ahead to Q1 2024, 18 retailers issued negative preannouncements, while only two issued positive EPS guidance so far (Exhibit 2). Of those retailers offering revenue guidance, 17 warned of disappointing results, while only ten said revenue might be better than previously expected.

Exhibit 2: Earnings and Revenue Guidance: Q1 2024

Source: LSEG I/B/E/S

This week in retail

Here are the Q4 2023 earnings and same store sales estimates for the companies reporting this week:

Exhibit 3: Same Store Sales and Earnings Estimates – Q4 2023

Source: LSEG I/B/E/S

Discount levels – U.S. online retailers

The discount penetration (how much of the assortment is on sale) has declined this year. LSEG discovered this in a collaboration with Centric Market Intelligence, formerly StyleSage, which analyzes retailers, brands, online trends and products across the globe. Two possible reasons are that the holiday sales season was robust and retailers are being conservative as they introduce their new full-priced spring merchandise. For February, the discount penetration is 27%, slightly below last year’s February average of 28%.

Exhibit 4: Average Discount Penetration: U.S. Online Retailers

Source: Centric Market Intelligence, formerly StyleSage Co.

Accordingly, the average percent discount in February has also declined to 36.7%, below last year’s 38.0%.

Exhibit 5: Average Discount: U.S. Online Retailers

Source: Centric Market Intelligence, formerly StyleSage Co.