EC Spotlight On Retail Sector Earnings

The one Retail sector space that will be in the spotlight this week is the traditional department store industry. We will see what Macy’s and JC Penney (JCP - Free Report) come out within their reports, but the stock market performance of the stocks suggests that expectations remain very low. While the Retail landscape as a whole has been undergoing a secular shift in recent years as a result of changing consumer behavior and increased competitive pressures, particularly from the digital side, the department store space has truly been in pain.

Q4 Earnings Season Scorecard

As of Friday, February 21st, we have seen Q4 results from 438 S&P 500 members or 87.6% of the index’s total membership. With another 42 index members reporting results this week, we will have seen Q4 results from 96% of the index’s membership by the end of this week.

Total earnings for these 438 index members are up +1.3% from the same period last year on +4.5% higher revenues, with 71.9% beating EPS estimates and 65.5% beating revenue estimates.

The comparison charts below put the earnings and revenue growth rates and the EPS and revenue beats percentages in a historical context.

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And here are the Q4 EPS and revenue beats percentages.

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It is possible to focus only on the revenue performance in the above comparison charts, but we will make it even easier for you by just showing how the Q4 top-line performance stacks up relative to the first three quarters of 2019.

(Click on image to enlarge)

As you can see here, a much bigger proportion of companies are beating top-line estimates, with the EPS beats percentage actually tracking below historical periods. The revenues growth rate doesn’t show the same level momentum, but it has nevertheless held up fairly well.

Looking at Q4 as a whole, combining the actual results that have come out with estimates for the still-to-come companies, total earnings are expected to be up +0.7% from the same period last year on +4.3% higher revenues. Excluding the Energy sector, Q4 earnings would have been up +4.1%.

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