Q2 2022 U.S. Retail Scorecard – Wednesday, August 24

To date, 169 of the 204 companies in our Retail/Restaurant Index have reported their earnings results for Q2 2022, representing 83% of the index. Of those companies that have reported their quarterly results so far, 74% announced that profits beat analysts’ expectations, while 2% delivered on-target results and 24% reported earnings that fell below estimates. The Q2 2022 blended earnings growth estimate now stands at -6.2%.

The blended revenue growth estimate for the 204 companies in this index is 9.2% for Q2 2022. Of those companies that have reported their quarterly results so far, 61% announced revenue that exceeded analysts’ expectations and the remaining 39% reported that their revenue fell below analysts’ forecasts.

Exhibit 1: Refinitiv Earnings Dashboard

(Click on image to enlarge)

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

Q2 2022 earnings

Macy’s beat its Q2 earnings, revenue and same store sales estimate. Still, the retailer cut its full-year guidance. Likewise, department store JW Nordstrom cut its full-year guidance as it is sitting on huge amounts of inventory. This, despite the fact that it beat its Q2 earnings and revenue estimates. The department store said “the softening trend was more significant in customer segments with the lowest income profiles, while we saw greater resilience in the higher income segments” (Source: JW Nordstrom Q2 2022 Earnings Call).

Other retailers are delivering similar warnings as they report earnings for Q2 2022. Of the 169 retailers that have reported Q2 earnings, 149 mentioned inflation and 163 flagged supply chain issues. Estee Lauder and Tapestry also warned that the strengthening dollar is putting pressure on international earnings.

On the optimistic side, Dick’s Sporting Goods raised its full-year guidance. The company said the consumer is engaged despite macroeconomic conditions, its inventory is healthy and well-positioned with improved in-stock levels in key categories (Source: Dick’s Sporting Goods Q2 2022 Earnings Call).

The following chart displays estimates of earnings and same store sales expectations for retailers that are scheduled to release their Q2 2022 results this week.

Exhibit 2: Same Store Sales and Earnings Estimates–Q2 2022

(Click on image to enlarge)

Source: Eikon Workspace

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Disclaimer: These views are not investment advice, and should not be interpreted as such. These views are my own, and do not represent my employer. Trading has risk. Big risk. Make sure that you ...

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