Image Source: Mike Mozart, Flickr

To date, 153 of the 205 companies in our Retail/Restaurant Index have reported their EPS results for Q3 2023, representing 75% of the index. Of those companies that have reported their quarterly results, 68% announced profits that beat analysts’ expectations, while 5% delivered on-target results and 27% reported earnings that fell below estimates. The Q3 2023 blended earnings growth estimate now stands at 26.9%.

The blended revenue growth estimate for the 205 companies in this index is 4.2% for Q3 2023. Of those companies that have reported their quarterly results so far, 59% announced revenue that exceeded analysts’ expectations and the remaining 41% reported that their revenue fell below analysts’ forecasts.

Exhibit 1: LSEG Proprietary Research Restaurant & Retail Dashboard – Q3 2023

(Click on image to enlarge)

Source: LSEG I/B/E/S

This week in retail

As predicted by StarMine, Walmart beat its Q3 earnings and revenue estimates. Still, the discounter gave a cautious outlook for the year. This comes upon entering the much-anticipated fourth quarter holiday season. The discounter echoed Target’s message that the consumer is value-oriented and looking for promotions to make those discretionary purchases. Strong sales at TJX also show that consumers are still shopping for deals as they purchase designer clothing for less.

Macy’s reiterated this message during its earnings call today: “We know our customer is looking for value, so we have simplified our promotions. We are confident the strategic changes we have made will be well-received by our customers.” (Source: Macy’s Q3 2023 Earnings Call)

Looking forward to the holiday season, the department store chain also said that the “customer across nameplates continues to be under pressure and discerning in how they spend in discretionary categories we offer.” Still, Macy’s is confident that it’s a gift-giving destination, and that demand for its beauty categories will remain healthy into the holiday season. The department store raised its low-end range for the full-year outlook.

Meanwhile, the Home Improvement and Furniture groups have been under some pressure after received a boost during the pandemic. Accordingly, Williams-Sonoma saw a 15.4% decline in revenue during Q3. Same store sales also came in below expectations at -14.6%.

Here are the Q3 2023 earnings and same store sales estimates for the companies reporting this week:

Exhibit 2: Same Store Sales and Earnings Estimates–Q3 2023

(Click on image to enlarge)

Source: LSEG I/B/E/S

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