To date, 188 of the 204 companies in our Retail/Restaurant Index have reported their EPS results for Q1 2023, representing 92% of the index. Of those companies that have reported their quarterly results, 76% announced profits that beat analysts’ expectations, while 2% delivered on-target results and 22% reported earnings that fell below estimates. The Q1 2023 blended earnings growth estimate now stands at 33.3%.

The blended revenue growth estimate for the 204 companies in this index is 4.5% for Q1 2023. Of those companies that have reported their quarterly results so far, 71% announced revenue that exceeded analysts’ expectations and the remaining 29% reported that their revenue fell below analysts’ forecasts.

Exhibit 1: Refinitiv Earnings Dashboard

Source: I/B/E/S data from Refinitiv

This Week in Retail

Department stores Macy’s and Nordstrom reported this week and continue to echo the same sentiment as other retailers this quarter. “The U.S. consumer, particularly at Macy’s, pulled back more than we anticipated as they reallocated spend to food, essentials and services,” according to Macy’s June 1 earnings call. As a result, the retailer lowered its full-year guidance.

Likewise, Dollar General stock took a hit as the retailer also missed expectations. Their core consumer is sticking to necessities, and not splurging on discretionary items. As a results, margins are lower, and the retailer also lowered its sales guidance.

The following chart displays estimates of earnings and same store sales expectations for retailers that are scheduled to release their Q1 2023 results this week.

Exhibit 2: Same Store Sales and Earnings Estimates – Q1 2023

Source: Eikon Workspace

Guidance

So far, 188 retailers have reported Q1 earnings; of this group, 132 mentioned inflation, and 23 big box retailers discussed shrinkage. Looking ahead to Q2 2023, 20 retailers issued negative pre-announcements, while four issued positive EPS guidance so far. Of those retailers offering revenue guidance, 28 warned of disappointing results, while only seven said revenue might be better than previously expected.

Exhibit 3: Earnings and Revenue Guidance: Q2 2023

Source: I/B/E/S data from Refinitiv

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