To date, 159 of the 195 companies in our Retail/Restaurant Index have reported their EPS results for Q4 2024, representing 82% of the index. Of those companies that have reported their quarterly results, 74% announced profits that beat analysts’ expectations, while 7% delivered on-target results and 19% reported earnings that fell below estimates. The Q4 2024 blended earnings growth estimate now stands at 14.6%. The blended revenue growth estimate for the 159 companies in this index is 4.1% for Q4 2024. Of those companies that have reported their quarterly results so far, 70% announced revenue that exceeded analysts’ expectations and

Since President Trump took office on Jan. 20, 2025, the U.S. has been the worst performing stock market of the entire G7. While Trump likes to shoot from the hip when it comes to economic policy, investors in U.S. assets, it seems, do not appreciate this approach. The uncertainty created by further tariffs is also creating a headache for firms who are trying to figure out how their supply chains are going to be impacted, and to what extent higher costs will reduce their competitiveness, thereby negatively impacting their share prices. Exhibit 1: Performance of G7 stock markets One way

The LSEG U.S. Retail and Restaurant Q4 earnings index, which tracks changes in the growth rate of earnings within the sector, is expected to show a 13.0% growth over last year’s levels. Our metrics show that six of 10 consumer-related industries have turned negative. (Exhibit 1) Of the 195 retailers tracked by LSEG, the Broadline Retail sector is headed for the highest earnings growth rate in the fourth quarter, recording a 71.0% surge over last year’s level. The second-strongest sector is Hotels, Restaurants & Leisure with a 6.2% growth estimate. Consumer Confidence improved towards the end of the fourth quarter,

To date, 182 of the 194 companies in our Retail/Restaurant Index have reported their EPS results for Q3 2024, representing 94% of the index. Of those companies that have reported their quarterly results, 62% announced profits that beat analysts’ expectations, while 4% delivered on-target results and 34% reported earnings that fell below estimates. The Q3 2024 blended earnings growth estimate now stands at 7.3%. The blended revenue growth estimate for the 194 companies in this index is 3.7% for Q3 2024. Of those companies that have reported their quarterly results so far, 53% announced revenue that exceeded analysts’ expectations and

During the U.S. presidential election campaign, Donald Trump promised to fix the economy by eliminating inflation, cutting taxes and increasing tariffs. This raises a challenge for asset allocators as to how these policies will hit expected asset returns in the short and long run. The incoming president will inherit a robust economy with a labor market in rude health and unemployment at only 4.1%. Real wages are rising and job openings, although down from post-pandemic levels, are still at the same highs reached during 2018-19, as shown in exhibit 1. Exhibit 1: U.S. Labor Market Indicators Furthermore, the ex ante

Increased labor costs and tariffs are expected to contribute to margin contractions within the S&P 500. As a result, the S&P 500 is expected to see 19Q3 revenue increase 3.6% from the prior year, while earnings are expected to decline by 3.1%. If this holds, it will be the first earnings decline since 16Q2’s YoY decrease of 2.1%.

This year alone, retailers have discussed Chinese tariffs in 166 earnings calls, and that might just be the beginning. The Chinese government announced its retaliation on Aug. 23, saying tariffs will be imposed on American goods, including apparel, textiles, agriculture and chemicals. This announcement is weighing on retail stocks globally and continues to fuel a trade war between China and the U.S. And now tariffs are having a deep effect on both countries. Retailers Booming in China The retailers reporting Q2 earnings this month have been vocal about their popularity in China. Walmart said during its Q2 earnings call that

U.S. retailers that offer value and convenience continue to outperform — and gain market share. Additionally, they have the wherewithal to do better during a trade war. Walmart and Target smashed Q2 earnings expectations and are showing strong defensive qualities. Given their wide range of brand categories and robust supply/vendor relationship, they are less vulnerable to a trade war. These discounters have the resources and flexibility to make the necessary adjustments to their supply chain more rapidly than their peers do. Exhibit 1: Q2 2019 Same Store Sales Actuals and Estimates for Tariff-Proof Retailers Source: I/B/E/S data from Refinitiv Omnichannel

Sixty nine percent of companies in our Retail/Restaurant Index have reported Q2 2019 EPS. Of the 144 companies in the index that have reported earnings to date, 69% have reported earnings above analyst expectations, 9% reported earnings in line with analyst expectations and 22% reported earnings below analyst expectations. The Q2 2019 blended earnings growth estimate is 1.9%.  The Q2 2019 blended revenue growth estimate is 1.9%. Sixty-one percent have reported revenue above analyst expectations, 1% matched and 38% reported revenue below analyst expectations. Exhibit 1: Refinitiv Earnings Dashboard Source: I/B/E/S data from Refinitiv Here are the Same Store Sales

Retail analysts polled by Refinitiv are cautious about Q2 earnings expectations, especially since many retailers lowered their earnings guidance for Q2. The Q2 2019 retail blended earnings growth estimate is 1.8% — a sharp contrast with Q1 2019, which saw an 8.3% growth in retail earnings. Let’s dig in and look at the major factors: The latest reading of American consumer confidence, as measured by the Refinitiv/Ipsos Primary Consumer Sentiment Index suggests consumers still have some ongoing concerns surrounding job security and possible repercussions on local economies. Most U.S. retailers are concerned about the higher costs associated with tariffs imposed

Retailers continue to report Q1 2019 earnings, and 35 retailers have mentioned tariffs during their Q1 earnings call.

Asian bourses rallied on Monday, following a truce in the Sino–US trade war. In return for a three-month delay to a scheduled increase in US tariff rates, China is expected immediately to increase its imports from the US, and to step up negotiations about other concerns such as forced technology transfers and cyber espionage. China’s Shanghai A share index rose 2.5%, while indices in neighbouring economies that are dependent on the Middle Kingdom, including Vietnam and Taiwan, also experienced significant gains. The positive sentiment could be detected stateside. Immediately after opening, the S&P 500 was trading 1.3% higher. The more