Can Retail Earnings Hold Up In The Face Of The Delta Variant?

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Earnings releases from traditional brick-and-mortar retailers in recent days have been as positive and strong as has been the trend across other sectors in the Q2 reporting cycle.

Driving this trend is a combination of favorable consumer fundamentals and the emergence of viable business models that blend digital access with these operators’ existing physical footprint. While a number of retailers like Walmart (WMT - Free Report) were already moving in that direction before the pandemic, the transition was accelerated by Covid-related business disruptions.

A case in point is Macy’s (M - Free Report), which had almost been written off as a viable player in the space before the pandemic but appears to have really turned around its fortunes, as the beat-and-raise Q2 earnings report confirms.

For the sector scorecard, we now have Q2 results from 76.5% of retailers in the S&P 500 index. Total Q2 earnings for these retailers are up +46.3% on +14.3% higher revenues, with a record 92.3% of the retailers beating EPS and revenue estimates. This is a notably better showing from this group of retailers relative to what we have been seeing from the group in recent periods, as the comparison charts below show.

Disclosure: contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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