Q4 2022 U.S. Retail Scorecard

To date, 139 of the 201 companies in our Retail/Restaurant Index have reported their EPS results for Q4 2022, representing 69% of the index. Of those companies that have reported their quarterly results, 64% announced that profits beat analysts’ expectations, while 4% delivered on-target results and 32% reported earnings that fell below estimates. The Q4 2022 blended earnings growth estimate now stands at -21.8%.

The blended revenue growth estimate for the 201 companies in this index is 5.7% for Q4 2022. Of those companies that have reported their quarterly results so far, 65% announced revenue that exceeded analysts’ expectations and the remaining 35% 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

This week: Q4 2022 earnings

Inflation is the number-one worry on consumers’ mind, even more so than Covid-19. As a result, they are trading down and gravitating towards the discounters. Target is facing difficult comparisons from a year ago, and as a result is on track to report a -1.7% Same Store Sales (SSS) for Q4 2022. Although the retailer has been very promotional over the past year, it has done a relatively good job in containing inflation and maintaining prices unchanged since 2021, which Refinitiv discovered in a collaboration with Centric Pricing, formerly StyleSage (Exhibit 2). It has, however, raised prices on beauty products, which have been in strong demand since the reopening. As a result, Target is looking at a 23.5% growth in gross margins for Q4 2022.

Exhibit 2: Target Price Changes on Key Products: 2021 –2023

Source: Centric Pricing, formerly StyleSage

The following chart displays estimates of earnings and same store sales expectations for retailers that are scheduled to release their Q4 2022 results this week.

Exhibit 3: Same Store Sales and Earnings Estimates–Q4 2022

(Click on image to enlarge)

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

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