To date, 158 of the 204 companies in our Retail/Restaurant Index have reported their EPS results for Q3 2022, representing 78% of the index. Of those companies that have reported their quarterly results so far, 69% announced that profits beat analysts’ expectations, while 1% delivered on-target results and 30% reported earnings that fell below estimates. The Q3 2022 blended earnings growth estimate now stands at 3.0%.

The blended revenue growth estimate for the 204 companies in this index is 9.1% for Q3 2022. Of those companies that have reported their quarterly results so far, 64% announced revenue that exceeded analysts’ expectations and the remaining 36% reported that their revenue fell below analysts’ forecasts.

Exhibit 1: Refinitiv Earnings Dashboard

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I/B/E/S data from Refinitiv

This week: Q3 2022 earnings

As predicted by StarMine, both Macy’s and BJ’s Wholesale beat their Q3 earnings estimates and posted a positive surprise. Macy’s improved its inventory levels and raised its earnings guidance for the holidays.

The StarMine data shows that the following retail names are also likely to beat Q3 2022 earnings expectations: Ulta Beauty, Dick’s Sporting Goods and Williams-Sonoma with SSS estimates of 8.2%, -2.8% and 6.5%, respectively.

Target’s collaboration with Ulta is paying off. In its earnings call yesterday, Target said “Ulta Beauty at Target offerings nearly tripled their total sales volume when compared to this period a year ago.” (Source: Target’s Q3 2022 Earnings Call)

The discounter knows consumers are gravitating towards experiences, and is introducing a store- within-a-store concept, including Disney and FAO Schwarz shops just in time for the holidays.

Meanwhile, Williams-Sonoma is expected to report after the market close. The consensus estimate among analysts is for EPS of $3.71. However, there’s a five-star rated analyst with a very accurate rating that published a Bold Estimate of $3.92, above the mean. This suggests that the company is very likely to beat earnings and post a positive surprise.

This week’s retail earnings results will help provide better insight into consumers’ concerns as we head into the holiday season. Wall Street is keeping a close eye on inventory levels, markdowns, margins, and whether retailers will maintain their guidance. Lowering guidance could potentially indicate that consumers are holding back, or just navigating a challenging environment.

The following chart displays estimates of earnings and same store sales expectations for retailers that are scheduled to release their Q3 2022 results this week.

Exhibit 2: Same Store Sales and Earnings Estimates–Q3 2022

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Source: Eikon Workspace

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