Ninety-seven percent of companies in our Retail/Restaurant Index have reported Q2 2021 EPS. Of the 199 companies in the index that have reported earnings to date, 86% have reported earnings above analyst expectations, 2% matched and 12% reported earnings below analyst expectations. The Q2 2021 blended earnings growth estimate is 164.1%.

The Q2 2021 blended revenue growth estimate is 25.2%. Eighty-two percent have reported revenue above analyst expectations, and 18% reported revenue below analyst expectations.

Exhibit 1: Refinitiv Earnings Dashboard

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

Retail earnings

As people cope with the Delta variant, sales are strong for athleisure and high-end furniture to improve the stay-at-home experience. Lululemon stock skyrocketed on better-than-expected Q2 financial results and upbeat outlook. Likewise, the boom in the housing market has allowed consumers to buy bigger and second homes and has driven up demand for furniture, which is boosting sales at RH. Meanwhile, GameStop reports mixed results.

Lululemon said it updated its guidance as it expects to exceed its 2023 revenue target by the end of this year, “two years ahead of schedule” (Source Lululemon, Q2 earnings release, 9/8/2021). The company also said it will reach its goal of doubling its men’s business this year, suggesting that this merchandise is resonating well. Its international expansion is also going strong, and e-commerce sales grew 4% on top of a 157% rise last year. All this, while coping with minimum wage and mitigating supply chain issues.

Looking forward to the third quarter, Lululemon and RH are expected to see a 34.3% and 42.9% growth in revenue from their 2019 pre-pandemic levels (Exhibit 2). Meanwhile, GameStop might see mixed results again in Q3. The gaming retailer tends to see an improvement during the holiday season, which will boost fourth-quarter sales.

Exhibit 2: Revenue and Net Income: 2019 – 2021

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Source: Refinitiv I/B/E/S