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To date, 166 of the 204 companies in our Retail/Restaurant Index have reported their EPS results for Q4 2023, representing 82% of the index. Of those companies that have reported their quarterly results, 67% announced profits that beat analysts’ expectations, while 3% delivered on-target results and 30% reported earnings that fell below estimates. The Q4 2023 blended earnings growth estimate now stands at 35.7%.

The blended revenue growth estimate for the 204 companies in this index is 4.6% for Q4 2023. Of those companies that have reported their quarterly results so far, 58% announced revenue that exceeded analysts’ expectations and the remaining 42% reported that their revenue fell below analysts’ forecasts.

Exhibit 1: LSEG Earnings Dashboard

Source: LSEG I/B/E/S

Guidance

So far, 166 retailers have reported Q4 earnings; of this group, 97 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, 23 warned of disappointing results, while only 11 said revenue might be better than previously expected.

Exhibit 2: Earnings and Revenue Guidance: Q1 2024

Source: LSEG I/B/E/S

This week in retail sales and earnings

Target beat its Q4 earnings, revenue, and same-store sales estimates. Earnings grew 57.7% from a year ago, while same-store sales (SSS) came in at -4.4%, slightly above its -4.6% estimate. This marks its third consecutive quarter of negative SSS. Still, the retailer experienced sequential traffic improvement and sounded upbeat on its earnings call with its new growth plan, which includes rolling out a new membership program. This program will offer same-day delivery to its customers. The company is moving through the first quarter with leaner inventory levels.

Teen retailers are also reporting this week. Abercrombie (ANF) is on track to post a robust 15.1% SSS, which will mark its third quarter of double-digit comps. Similarly, American Eagle (AEO) is expected to post a 6.0% 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

Source: LSEG I/B/E/

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