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To date, 181 of the 197 companies in our Retail/Restaurant Index have reported their EPS results for Q2 2025, representing 92% of the index. Of those companies that have reported their quarterly results, 73% announced profits that beat analysts’ expectations, while 4% delivered on-target results and 23% reported earnings that fell below estimates. The Q2 2025 blended earnings growth estimate now stands at 6.9%.

The blended revenue growth estimate for the 197 companies in this index is 4.5% for Q2 2025. Of those companies that have reported their quarterly results so far, 72% announced revenue that exceeded analysts’ expectations and the remaining 28% 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

Macy’s delivered a stronger-than-expected Q2, with earnings surpassing analyst forecasts. The retailer also beat revenue and same-store sales (SSS) estimates, with total revenue rising to $4.8 billion. SSS increased 0.8%, marking the first positive comp after 12 consecutive quarters of declines. Growth was led by Bloomingdale’s (+3.6%) and Bluemercury (+1.2%). Macy’s also reported a 22.4% increase in credit card net revenues, rising from $125 million to $153 million, and raised its full-year guidance.

However, the company noted margin pressure, stating: “Gross margin rate of 39.7% declined 80 basis points, reflecting proactive markdowns on remaining early Spring product to maintain healthy inventories and product bought under prior tariff rates.” (Source: Macy’s Q2 2025 Earnings Report)

Dollar Tree also reported solid Q2 results, with revenue exceeding expectations at $4.57 billion, and both earnings and SSS coming in ahead of forecasts. The discounter posted a 3.0% increase in SSS, supported by a 3.0% rise in customer traffic and a 3.4% increase in average ticket size. Gross margin expanded to 12.9%, driven by: “Improved mark-on from pricing initiatives, lower domestic freight costs, lower occupancy costs due to sales leverage, and favorable mix, partially offset by higher tariff costs, markdowns, distribution costs, and shrink.” (Source: Dollar Tree Q2 2025 Earnings Report)

Also reporting later today is teen apparel retailer American Eagle. The company has been out of favor for some time, weighed down by weak fashion demand and underwhelming performance across key categories. According to LSEG I/B/E/S, the consensus estimate for Q2 earnings is $0.21 per share, down 46.9% year-over-year, with revenue expected to come in at $1.24 billion, down 2.4% year-over-year. If results meet expectations, this would mark the fourth consecutive quarter of negative earnings and revenue growth.

American Eagle continues to face macroeconomic headwinds, particularly as rising inflation and elevated household debt put pressure on discretionary spending among its core young consumer base. During its last earnings call in May, management warned that tariff-related costs would reduce fiscal 2025 gross profit by approximately $40 million, with a portion of that impact hitting Q2. The company also noted progress in supply chain diversification, stating: “Additionally, we’re further diversifying our supply chain and on track to reduce our sourcing exposure to China to under 10% this year, with holiday season exposure falling to low single digits.” (Source: AEO Q1 2025 Earnings Call)

Looking ahead, investors will be watching closely for management’s Q3 and holiday season outlook, and whether the brand’slatest denim-focused marketing campaign has begun to influence consumer engagement and drive sales momentum. Interestingly, Gap appears to have benefited from the buzz surrounding American Eagle’s denim push. While American Eagle’s ad campaign drew criticism for its tone and messaging, Gap responded with its own “Better in Denim” campaign featuring global pop group KATSEYE.

The ad, which emphasized diversity, movement, and joy, quickly went viral, amassing over 20 million views and outperforming American Eagle’s campaign in both engagement and sentiment. This momentum translated into sales, with Gap noting during its Q2 earnings call that denim products were performing well: “So when I look at the back half with the continuation of the execution of the playbook and the team that’s delivering, I get more confident that not only is the back half going to deliver, but we’ve got great value creation and growth over time.” (Source: Gap Q2 2025 Earnings Call)

Here are the latest Q2 2025 earnings and same store sales retail estimates:

Exhibit 2: Same Store Sales and Earnings Estimates – Q2 2025

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Source: LSEG I/B/E/S

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