To date, 151 of the 201 companies in our Retail/Restaurant Index have reported their EPS results for Q1 2024, representing 75% of the index. Of those companies that have reported their quarterly results, 74% announced profits that beat analysts’ expectations, while 1% delivered on-target results and 25% reported earnings that fell below estimates. The Q1 2024 blended earnings growth estimate now stands at 21.7%.
The blended revenue growth estimate for the 201 companies in this index is 4.0% for Q1 2024. Of those companies that have reported their quarterly results so far, 53% announced revenue that exceeded analysts’ expectations and the remaining 47% reported that their revenue fell below analysts’ forecasts.
Exhibit 1: LSEG Earnings Dashboard
Source: LSEG I/B/E/S
This week in retail
This week’s retail earnings results show that the U.S. consumer remains resilient despite sticky inflation. As expected, Free People and Anthropologie beat expectations with robust comps of 17.1%, and 10.4%, respectively. This was despite the fact that both divisions were facing difficult comparisons from a year ago. The rise in consumer spending on the latest fashion trend bode well for their parent company, Urban Outfitters. The apparel retailer beat its 2.6% SSS estimate, with a 4.6% Q1 comp result.
Likewise, TJX saw healthy sales from a consumer that still wants designer clothing for less. The off-price retailer saw growth across divisions driven by customer transactions. As a result, the retailer raised it’s full year outlook.
Meanwhile, upscale home goods retailer Williams-Sonoma smashed its Q1 earnings estimate of $2.70 with a $4.07 result. It also beat its revenue and SSS estimates. The retailer raised its operating margin outlook for fiscal 2024.
Conversely, Target missed its Q1 earnings estimate, but beat on revenue and SSS. In line with the overall retail theme, Target also saw a huge spike in Apparel sales during the first quarter. The discounter said “we’ve seen a meaningful improvement in discretionary trends, most notably in Apparel, where our performance improved by approximately 4 percentage points in Q1 when compared with last year’s fourth quarter. This gives us some optimism that we could see a better balance of spending between discretionary and frequency categories in the years ahead.”
During its earnings call, Target also reiterated its commitment to its long-term growth strategy and said “As we look ahead to the remainder of 2024, our team is focused on getting back to top-line growth. We expect that will begin in the second quarter as we build on the remarkable gains we’ve seen over time.” (Source: Target Q1 2024 Earnings Call)
Here are the Q1 2024 earnings and same store sales estimates for the companies reporting this week:
Exhibit 2: Same Store Sales and Earnings Estimates – Q1 2024
Source: LSEG I/B/E/S
