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To date, 173 of the 192 companies in our LSEG Retail/Restaurant Index have reported their EPS results for Q3 2025, representing 91% of the index. Of those companies that have reported their quarterly results, 68% announced profits that beat analysts’ expectations, while 4% delivered on-target results and 28% reported earnings that fell below estimates. The Q3 2025 blended earnings growth estimate now stands at 7.7%.

The blended revenue growth estimate for the 192 companies in this index is 5.3% for Q3 2025. Of those companies that have reported their quarterly results so far, 69% announced revenue that exceeded analysts’ expectations, while 1% delivered on-target results and the remaining 30% reported that their revenue fell below analysts’ forecasts.

Exhibit 1: LSEG Earnings Dashboard

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Source: LSEG I/B/E/S

This week in retail

U.S. shoppers are spending selectively, trading down in key categories, and gravitating to retailers perceived as offering better value. This dynamic is supporting outperformance at the value format, including Five Below and Dollar Tree. However, even department stores like Macy’s can beat near‑term expectations when they sharpen assortments and promotions while still acknowledging a restrained consumer and tariff headwinds.

As anticipated by StarMine, Five Below delivered a strong third-quarter performance, posting earnings of $0.68, well above its $0.24 estimate. Revenue and same-store sales (SSS) also exceeded expectations, reflecting the company’s ability to offer on-trend merchandise at attractive price points that resonate with value-conscious shoppers. Analysts surveyed by LSEG remain bullish on the retailer’s holiday outlook, with upward revisions to Q4 earnings estimates.

Further underscoring consumers’ focus on value and trading down, Dollar Tree beat both earnings and revenue estimates, citing gains in new customers and market share. The company noted, “Today, we serve an increasingly broad spectrum of shoppers, from core value-focused households to middle and higher-income shoppers who are making deliberate choices about how and where they spend.” Notably, 60% of these incremental shoppers came from households earning over $100,000 (Source: DLTR Earnings Call, 12/3/2025).

Macy’s also surprised to the upside in Q3, reporting adjusted EPS of $0.09 versus expectations for a $0.14 loss, and revenue of $4.71 billion. Same-store sales rose 2.0%, well above the -0.45% estimate. While Macy’s raised its full-year sales guidance, it cautioned that selective spending and cost pressures from higher tariffs will persist through the holiday season, further evidence of a consumer prioritizing value.

Here are the latest Q3 2025 earnings and same store sales retail estimates:

Exhibit 2: Same Store Sales and Earnings Estimates – Q3 2025

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Source: LSEG I/B/E/S

Guidance

As retailers provide their outlook for Q4 2025 earnings, 19 companies have issued negative preannouncements, while 8 have provided positive EPS guidance so far (see Exhibit 3). Among those offering revenue guidance, 20 retailers warned of disappointing results, while nine indicated that revenue may exceed prior expectations.

Many retailers have also addressed the impact of rising tariffs, alongside growing concerns about a value-conscious consumer, higher prices, challenging macroeconomic conditions, and overall cautious spending behavior.

Exhibit 3: Earnings and Revenue Guidance: Q4 2025

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Source: LSEG I/B/E/S

Discount levels – U.S. online retailers

The discount penetration (how much of the assortment is on sale) has declined notably this year, likely in response to rising tariffs. This trend was identified through LSEG’s collaboration with Centric Market Intelligence, which monitors retailers, brands, online trends and products globally.

Consumers may have been particularly drawn to Black Friday and Cyber Week, as retailers appear to have ramped up promotional activity following several months of decline. Discount penetration climbed to 35% in November, above both the year-to-date average of 27% and last year’s average of 34% (see Exhibit 4). However, this still represents the lowest November discount penetration since pre-pandemic levels.

Exhibit 4: Average Discount Penetration: U.S. Online Retailers

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Source: Centric Market Intelligence

Meanwhile, the latest average percent discount stands at 33%, which is below last year’s level and below the 2025 year-to-date average of 35%. This suggests retailers are adopting a more targeted approach, fewer items on sale and smaller reductions to safeguard margins (see Exhibit 5).

Exhibit 5: Average Discount: U.S. Online Retailers

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Source: Centric Market Intelligence.

LSEG Q4 2025 retail outlook

Following four years of strong revenue expansion, the LSEG U.S. Retail and Restaurant Index is showing signs of deceleration. Revenue growth is projected at 5.3% in Q3, followed by a deceleration to 2.2% in Q4, falling below the 3%–5% “sweet spot” that has characterized performance since 2023 (see Exhibit 6).

Earnings growth is also expected to moderate, with estimates pointing to 7.7% in Q3 and 0.7% in Q4 2025. This slowdown is primarily driven by softening consumer demand and elevated cost pressures, particularly from tariffs, compared to the prior year.

Exhibit 6: The LSEG Retail/Restaurant Earnings & Revenue Growth Rates: 2023 – 2025

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Source: LSEG I/B/E/S

Consumer confidence declines

“November’s LSEG/Ipsos Primary Consumer Sentiment Index finds that overall American consumer sentiment has declined this month,” Johnny Sawyer of Ipsos reports. “The index is down more than a point for the second time in three months and now sits more than four points below its reading from this time a year ago.

“This month’s decline can largely be attributed to a sharp drop in the Expectations sub-index, which measures consumers’ expectations about future economic conditions. Since reaching a three-year high in November 2024, the sub-index has fallen more than nine points, driven by increased concerns about job loss and a more pessimistic outlook about the strength of the local economy. Consumer sentiment continues to be subdued, and until the economic environment becomes more stable, it is likely that it will remain muted.”

As consumers navigate an uncertain economy, spending growth has decelerated this year. The LSEG Retail & Restaurant Index, which tracks the earnings performance of U.S. retailers and restaurants, is now below the double-digit growth levels seen over the past two years and is expected to remain subdued in Q4, reflecting lower earnings growth expectations.

Exhibit 7: The LSEG/IPSOS Consumer Sentiment Index

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Source: LSEG Workspace

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