To date, 158 of the 204 companies in our Retail/Restaurant Index have reported their EPS results for Q4 2023, representing 78% 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 Q4 2023 blended earnings growth estimate now stands at 35.0%.

The blended revenue growth estimate for the 204 companies in this index is 4.5% for Q4 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 Earnings Dashboard

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

Guidance

So far, 158 retailers have reported Q4 earnings; of this group, 95 mentioned inflation. Looking ahead to Q1 2024, 22 retailers issued negative preannouncements, while only three issued positive EPS guidance so far (Exhibit 2). Of those retailers offering revenue guidance, 21 warned of disappointing results, while only 11 said revenue might be better than previously expected.

Exhibit 2: Earnings and Revenue Guidance: Q1 2024

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Source: LSEG I/B/E/S

This week in retail

As previously expected, it was another good quarter for TJX and Urban Outfitters with comps of 5.0% and 4.9%, respectively. TJX posted a stellar 37% jump in earnings, and 13% growth in Q4 revenue. The off-price retailer is receiving a boost from the upper-middle-class consumer, who wants designer clothing for less. Going forward, TJX will face difficult SSS (same store sales) comparisons from a year ago. As a result, its guidance was a bit toned down compared to previous quarters.

Looking forward to next week, Abercrombie is on track to post a robust 15.1% SSS, which will mark its third quarter of double-digit comps. Similarly, American Eagle is expected to post a 5.0% comp for Q4. The teen retailer is receiving a boost from its Aerie division, which is on track to post an 11.5% SSS.

Moreover, the LSEG StarMine SmartEstimate data shows investors can expect positive surprises this quarter from Gap. The StarMine Predicted Surprise for Gap is 16.0%, suggesting the retailer is likely to beat the $0.23 earnings expectations and post a positive surprise.

Here are the Q4 2023 earnings and same store sales estimates for the companies reporting this and next week:

Exhibit 3: Same Store Sales and Earnings Estimates – Q4 2023

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Source: LSEG I/B/E/S

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