The LSEG U.S. Retail and Restaurant Q3 earnings index, which tracks changes in the growth rate of earnings within the sector, is expected to show an 8.1% growth over last year’s levels. Our metrics show that three of 10 consumer-related industries have turned negative (Exhibit 1).
Of the 183 retailers tracked by LSEG, the Leisure Products sector is headed for the highest earnings growth rate in the third quarter, recording an 81.1% surge over last year’s level. The second-strongest sector is Personal Care Products with a 64.9% growth estimate.
At the other end of the spectrum, Distributors has the weakest anticipated Q3 2026 estimate, with profits expected to decline by -12.1% (Exhibit 1). To date, 139 of the 183 companies in our Retail/Restaurant Index have reported their EPS results for Q3 2026, representing 76% of the index.
Exhibit 1: The LSEG Retail Earnings Growth Rate – Q3 2026
Source: LSEG I/B/E/S
The strongest sector is the Leisure Products group. Of the eight companies in this group, all are on track to post positive estimated earnings growth for Q3. Callaway Golf and Peloton Interactive reported the strongest earnings growth rates of 900.0%, and 533.3%, respectively. Similarly, Polaris and Hasbro are on track to report robust earnings growth rates of 163.4%, and 72.6%.
The second strongest sector is the Personal Care Products sector. Within this group, Estee Lauder Companies is on track to post the strongest estimated earnings growth rate at 125.0%. In fact, all five companies in this category are expected to report positive earnings growth for Q3.
Meanwhile, the Distributors group is on track to post the weakest year-over-year earnings comparisons. Negative growth expectations are directly responsible for the forecast decline in the overall earnings growth rate within the group. LKQ Corp. already reported a 40.5% decline in earnings, while Genuine Parts Co. reported a 4.5% earnings growth in the third quarter of 2026.
So far, 139 companies or 76.0% of those in our Retail/Restaurant Index, have reported earnings for Q3 2026. Of this group, 69% announced earnings that exceeded analysts’ expectations, 1% matched and the remaining 30% reported earnings that fell below analysts’ predictions (Exhibit 2). The blended earnings growth estimate for Q3 2026 is 8.1%.
To date, 139 companies in the Retail/Restaurant index have reported revenue for Q3 2026. For this group, the Q3 2026 blended revenue growth estimate is 6.1%; 58% have reported revenue above analyst expectations, and 42% reported revenue below analyst expectations.
Exhibit 2: LSEG Earnings Dashboard
Source: LSEG I/B/E/S
Guidance
To date, 139 retailers have reported Q3 2026 earnings, with many citing elevated prices, persistent macroeconomic challenges, and a more cautious consumer as key headwinds.
The bulk of retailers still have to report Q3 2026 results. Going into the quarter, 24 retailers issued negative preannouncements, while seven issued positive EPS guidance for Q3 2026 so far (Exhibit 3). Of those retailers offering revenue guidance, 26 warned of disappointing results, while 17 said revenue might be better than previously expected in Q3 2026.
Looking forward to Q4 2026; 14 retailers issued negative earnings preannouncements, while only five issued positive EPS guidance for Q4 2026. Of those retailers offering revenue guidance, 11 warned of disappointing results, while nine said revenue might be better than previously expected in Q4 2026.
Exhibit 3: Earnings and Revenue Guidance: Q3 2026 – Q4 2026
Source: LSEG I/B/E/S
Retail sales
The LSEG Same Store Sales (SSS) index is expected to see a 2.8% gain in Q3 2026 (Exhibit 4). An increase of 3.0% in SSS signals that consumer spending is healthy. Looking back one year, Q3 2025 SSS notched a gain of 5.5%.
Exhibit 4: LSEG Same Store Sales Index: 2023 – Present
Source: LSEG I/B/E/S
When it comes to apparel, retailers that offer shoppers a steady stream of novelty tend to cultivate strong customer loyalty. Aritzia, in particular, already reported the strongest Q3 same-store sales (SSS) growth of the quarter so far, with an increase of 34.5%. Notably, eight of the top 10 SSS performers this quarter are in the apparel category. Among the standouts, Tapestry and Ross Stores are expected to post SSS growth of 11.4% and 6.9%, respectively. Likewise, Anthropologie and Free People are driving projected gains of 3.7% and 8.1%, respectively for their parent company, Urban Outfitters.
At the same time, consumers continue to feel the pressure of elevated food prices, sustaining demand for discount retailers. These value-driven stores remain resilient, maintaining relatively steady sales volumes despite challenging year-over-year comparisons. Walmart, known for its strong value proposition and loyal customer base, is expected to post a 3.0% SSS increase. Meanwhile, Costco already reported a robust 9.4% gain, despite facing tough comparisons from a year ago.
Exhibit 5: Strongest Same Store Sales Estimates: Q3 2026 Estimate vs. Q3 2026 Actual
Source: LSEG I/B/E/S
On the other hand, mall-based and big-box department stores continue to fall out of favor with consumers. Lululemon and Michael Kors are projected to report Q3 2026 SSS declines of 11.4% and 9.2%, respectively (see Exhibit 6). Other underperformers such as Kohl’s, DSW, and Shoe Carnival remain in the bottom tier as they grapple with ongoing company-specific challenges.
Exhibit 6: Weakest Same Store Sales Estimates: Q3 2025 Estimate vs. Q3 2024 Actual
Source: LSEG I/B/E/S
Restaurant Same Store Sales
The LSEG Restaurant Same Store Sales (SSS) index is expected to see a 3.1% growth in SSS in Q3 2026, on top of facing last year’s easy comparison of 2.4%. (Exhibit 7).
Within this industry, the Casual Dining sector is on top with a 3.8% SSS estimate, stronger than the Quick Service sector. The Quick Service sector is on track to see a 2.8% SSS.
Exhibit 7: LSEG Restaurant Same Store Sales Index: 2021 – Present
Source: LSEG I/B/E/S
In the restaurant sector, approximately 82% of the companies in our SSS index have reported or are on track to report positive Q3 2026 results. However, it’s important to note that many are benefiting from relatively easy year-over-year comparisons. On the weaker end, Dave & Buster’s has one of the lowest estimates at -1.7%. Meanwhile, Wingstop, which faced an easy comparison from a year ago with a -5.6% SSS, has already reported a 5.4% comp decline, below its estimate for a 4.5% decline.
Exhibit 8: Weakest Restaurant Same Store Sales Estimates: Q3 2026 Estimate vs. Q3 2025 Actual
Source: LSEG I/B/E/S
On the positive side, there are notable standouts. Brinker International already reported 9.1% SSS growth, surpassing its 7.7% estimate but below last year’s 18.8% increase. Similarly, Burger King and Starbucks already beat their SSS estimates and delivered solid comps of 8.3% and 7.2%, respectively.
Exhibit 9: Strongest Restaurant Same Store Sales Estimates: Q3 2026 Estimate vs. Q3 2026 Actual
Source: LSEG I/B/E/S
