March U.S. retail sales are expected, once again, to reflect headline strength, with both total sales and sales excluding autos projected to match February’s solid gains of +0.6% and +0.5%, respectively. However, underlying momentum appears more measured. LSEG IFR forecast the control group, closely watched for its implications for GDP, to rise a modest 0.2%, signaling a deceleration beneath the surface.
Even so, this outcome wouldn’t be disappointing, given the higher uncertainty retailers have highlighted on earnings calls. Despite these concerns, consumer spending has held up well.
Geopolitical tensions in the Middle East are also likely to play an outsized role in March’s data, boosting gasoline station sales data largely through higher prices rather than incremental volume. Importantly, this price shock does not appear to have meaningfully disrupted broader consumer behavior. Unit auto sales accelerated to their fastest pace in six months, suggesting that households, in aggregate, remain willing to engage in sizable, longer‑term purchases despite elevated volatility.
Exhibit 1: Retail Sales Estimates: March 2026
Source: LSEG IFR
Consumer confidence
The LSEG/Ipsos Primary Consumer Sentiment Index fell sharply and has now declined in consecutive months. The Index for April 2026 is at 50.0. Fielded from March 20 – 25, 2026, the Index is down 3.4 points from last month.
“Overall consumer sentiment declined sharply compared to last month. Consumers’ comfort making both major and household purchases, as well as their confidence in investing in the future, have all fallen to levels seen in the early days of the COVID-19 pandemic,” Johnny Sawyer of Ipsos reports. “April’s LSEG/Ipsos Primary Consumer Sentiment Index now sits nearly three points lower than its reading from this time a year ago.”
“Views of the current economic climate and investment climate have declined for the second consecutive month, and expectations for the future are down for the third consecutive month. With the average gas price now over $4 per gallon and the odds of a recession rising, the broader economic environment resembles much of the uncertainty-plagued one from this time last year, and consumer sentiment has responded accordingly.”
Accordingly, analysts surveyed by LSEG have continued to revise down earnings and revenue expectations for the remainder of the year. For Q1, the LSEG Retail/Restaurant Index is projecting earnings growth of just 2.1%, which would represent the weakest quarterly growth rate since the pandemic.
Exhibit 2: The LSEG/Ipsos Primary Consumer Sentiment Index
Source: LSEG / Ipsos
Q1 earnings growth outlook
For Q1 2026, the LSEG Retail/Restaurant Index is looking at a 2.1% blended estimated earnings growth rate, and a 6.1% blended estimated revenue growth rate.
Six out of the ten consumer related industries have turned positive. Among them, the Textiles, Apparel & Luxury Goods and Consumer Staples sectors are expected to post some of the strongest first‑quarter results, with estimated earnings growth of 23.0% and 8.8%, respectively (Exhibit 3). These forecasts are supported by February U.S. retail sales data, which showed apparel as a key driver of overall retail growth, with clothing sales rising 7.2% year over year.
The Q1 2026 outlook suggests that consumers remain highly value‑oriented and continue to respond to promotional activity. Retailers employed aggressive discounting in February to clear winter inventory, paving the way for spring assortments. This strategy has helped drive store traffic and sales volumes, reinforcing the importance of promotions in sustaining near‑term demand even as retailers remain focused on managing margins.
Exhibit 3: Q1 2024 Earnings Growth Rates: LSEG Retail and Restaurant Index
Source: LSEG I/B/E/S
Q1 2026 StarMine SmartEstimate
Looking Ahead: Analysts surveyed by LSEG remain optimistic on Las Vegas Sands Corp’s Q1 performance, with results expected later this week. For Las Vegas Sands, the current consensus for Q1 2026 EPS stands at $0.78. However, a five-star rated analyst with a strong track record has issued a Bold Estimate of $0.86, well above consensus. Additionally, the StarMine Predicted Surprise exceeds 2%, signaling a high probability that Las Vegas Sands will deliver an earnings beat and a positive surprise.
The StarMine SmartEstimate is a weighted average of analyst estimates, with more weight given to more recent estimates and more accurate analysts. Our studies have shown that when the SmartEstimate differs from the consensus (I/B/E/S mean) by more than 2%, the company is likely to post subsequent earnings surprises directionally correct 70% of the time. This percentage difference is referred to as the Predicted Surprise (PS%) (Exhibit 4).
Exhibit 4: Las Vegas Sands StarMine SmartEstimate and Predicted Surprise %: Q1 2026
Source: LSEG Workspace
Similarly, analysts surveyed by LSEG remain constructive on the retailers highlighted below. Each company carries a StarMine Predicted Surprise above 2%, indicating an elevated likelihood of exceeding Q1 2026 earnings expectations and delivering a positive earnings surprise.
Exhibit 5: Strongest StarMine Predicted Surprise %: Q1 2026
Source: LSEG Workspace
Q1 2026 Guidance
As retailers start to report Q1 2026 earnings; 25 retailers issued negative earnings preannouncements, while only 16 issued positive EPS guidance so far (Exhibit 6). Of those retailers offering revenue guidance, 31 warned of disappointing results, while 25 said revenue might be better than previously expected.
About 80% of retailers have also discussed the impact of tariffs. Retailers are also warning about a slow start to the year and concerns about higher prices, challenging macroeconomic conditions and a cautious consumer as contributing factors.
Exhibit 6: Earnings and Revenue Guidance: Q1 2026
Source: LSEG I/B/E/S
Discount Levels – U.S. Online Retailers
The discount penetration (how much of the assortment is on sale) has increased meaningfully over the past two months. LSEG discovered this in a collaboration with Centric Market Intelligence, which analyzes retailers, brands, online trends and products across the globe.
Retailers typically take a cautious approach when introducing new, full‑priced spring assortments ahead of the Easter holiday. Despite this seasonal conservatism, discount penetration rose to approximately 40% in March, slightly above the year‑to‑date average.
Exhibit 7: Average Discount Penetration: U.S. Online Retailers
Source: Centric Market Intelligence
However, the average percent discount in April is holding steady at 32.0%, below last year’s average of 35.0%. This dynamic indicates that a larger share of merchandise is being promoted, as retailers seek to drive traffic and stimulate demand in a value‑conscious consumer environment. However, the depth of discounting remains shallower than last year, suggesting a deliberate effort to balance promotional activity with margin protection. In other words, retailers are increasing the breadth, but not the intensity, of discounts to entice shoppers while maintaining pricing discipline.
Exhibit 8: Average Discount: U.S. Online Retailers
Source: Centric Market Intelligence
