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The LSEG U.S. Retail and Restaurant Q3 earnings index, which tracks changes in the growth rate of earnings within the sector, is expected to show a 7.1% growth over last year’s levels. Our metrics show that three of 10 consumer-related industries have turned negative (Exhibit 1).

Of the 192 retailers tracked by LSEG, the Broadline Retail sector is headed for the highest earnings growth rate in the third quarter, recording a 34.8% surge over last year’s level. The second-strongest sector is Consumer Staples Distribution & Retail with a 5.3% growth estimate.

At the other end of the spectrum, Household Durables has the weakest anticipated Q3 2025 estimate, with profits expected to decline by -20.0% (Exhibit 1). To date, 140 of the 192 companies in our Retail/Restaurant Index have reported their EPS results for Q3 2025, representing 73% of the index.

Exhibit 1: The LSEG Retail Earnings Growth Rate – Q3 2025

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Source: LSEG I/B/E/S

The strongest sector is the Broadline Retail group. Of the six companies in this group, four are on track to post positive estimated earnings growth for Q3. Etsy and Amazon reported the strongest earnings growth rates of 40.0%, and 33.3%, respectively. Similarly, Olie’s Bargain Outlet is on track to report robust earnings growth rates of 28.4%.

The second strongest sector is the Consumer Staples Distribution & Retail sector. Within this group, United Natural Foods is on track to post the strongest estimated earnings growth rate at 156.3%. In fact, of the nineteen companies in this category, only five are expected to report negative earnings growth for Q3. BJ’s Wholesale and Target are projected to deliver weak results, with negative estimated earnings growth rates of -6.7% and -6.8%, respectively.

Meanwhile, the Household Durables group is on track to post the weakest year-over-year earnings comparisons. Negative growth expectations are directly responsible for the forecast decline in the overall earnings growth rate within the group. Twenty out of 28 companies struggled to match year-ago earnings growth levels. LGI Homes already reported a 71.2% decline in earnings, while La-Z Boy is on track to report -14.6% decline in earnings growth in the third quarter of 2025.

So far, 140 companies or 72.9% of those in our Retail/Restaurant Index, have reported earnings for Q3 2025. Of this group, 66% announced earnings that exceeded analysts’ expectations, 4% matched and the remaining 30% reported earnings that fell below analysts’ predictions (Exhibit 2). The blended earnings growth estimate for Q3 2025 is 7.1%.

To date, 140 companies in the Retail/Restaurant index have reported revenue for Q3 2025. For this group, the Q3 2025 blended revenue growth estimate is 5.0%; 67% have reported revenue above analyst expectations, and 33% reported revenue below analyst expectations.

Exhibit 2: LSEG Earnings Dashboard

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Source: LSEG I/B/E/S

Guidance

To date, 140 retailers have reported Q3 2025 earnings, with many citing elevated prices, persistent macroeconomic challenges, and a more cautious consumer as key headwinds. Additionally, roughly half of these companies flagged tariffs as a significant drag on performance this quarter.

The bulk of retailers still have to report Q3 2025 results. Going into the quarter, 26 retailers issued negative preannouncements, while 15 issued positive EPS guidance for Q3 2025 so far (Exhibit 3). Of those retailers offering revenue guidance, 30 warned of disappointing results, while 21 said revenue might be better than previously expected in Q3 2025.

Looking forward to Q4 2025; 13 retailers issued negative earnings preannouncements, while only eight issued positive EPS guidance for Q4 2025. Of those retailers offering revenue guidance, eight warned of disappointing results, while eight said revenue might be better than previously expected in Q4 2025.

Exhibit 3: Earnings and Revenue Guidance: Q3 2025 – Q4 2025

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Source: LSEG I/B/E/S

Retail sales

The LSEG Same Store Sales (SSS) index is expected to see a robust 5.3% gain in Q3 2025 (Exhibit 4). An increase of 3.0% in SSS signals that consumer spending is healthy. Looking back one year, Q3 2024 SSS notched a gain of 5.2%.

It’s very important to note that due to the pandemic, the 2020-2022 results don’t offer an apples-to-apples comparison of current trends relative to previous years, as many retailers were closed due to shelter in place regulations.

Exhibit 4: LSEG Same Store Sales Index: 2021 – Present

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Source: LSEG I/B/E/S

When it comes to apparel, retailers that offer shoppers a steady stream of novelty tend to cultivate strong customer loyalty. Aritzia, in particular, is on track to deliver one of the strongest same-store sales (SSS) result of the quarter, with a projected increase of 11.2%. Notably, seven of the top ten SSS performers this quarter are in the apparel category. Among the standouts, Tapestry and The Buckle are expected to post SSS growth of 6.4% and 8.7%, respectively. Likewise, Anthropologie and Free People are driving a projected 5.0% gain for their parent company, Urban Outfitters.

At the same time, consumers continue to feel the pressure of elevated food prices, sustaining demand for discount retailers. These value-driven stores remain resilient, holding steady business volumes despite challenging year-over-year comparisons. Walmart, known for its strong value proposition and loyal customer base, is expected to post a 3.8% SSS increase. Meanwhile, Costco already reported a robust 5.7% gain, despite facing tough comparisons from a year ago.

Exhibit 5: Strongest Same Store Sales Estimates: Q3 2025 Estimate vs. Q3 2024 Actual

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Source: LSEG I/B/E/S

On the other hand, mall-based and big-box department stores continue to fall out of favor with consumers. Kohl’s and Target are projected to report weak Q3 2025 same-store sales (SSS) declines of -4.0% and -1.7%, respectively (see Exhibit 6). Other underperformers such as J. Jill, Kirkland, and Shoe Carnival remain in the bottom tier as they grapple with ongoing company-specific challenges.

Exhibit 6: Weakest Same Store Sales Estimates: Q3 2025 Estimate vs. Q3 2024 Actual

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Source: LSEG I/B/E/S

Restaurant Same Store Sales

The LSEG Restaurant Same Store Sales (SSS) index is expected to see a 2.2% growth in SSS in Q3 2025, on top of facing last year’s easy comparison of -1.3%. (Exhibit 7).

Within this industry, the Casual Dining sector is on top with a 3.8% SSS estimate, stronger than the Quick Service sector. The Quick Service sector is on track to see a 1.6% SSS.

It’s important to note that, once again, the 2020-2021 results don’t offer an apples-to-apples comparison over previous years, given that quarantine rules and other pandemic restrictions forced many restaurants to close. As a result, a number of restaurants didn’t report SSS data during the pandemic. 

Exhibit 7: LSEG Restaurant Same Store Sales Index: 2021 – Present

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Source: LSEG I/B/E/S

In the restaurant sector, approximately 58% of the companies in our same-store sales (SSS) index have reported or are on track to report positive Q3 2025 results. However, it’s important to note that many are benefiting from relatively easy year-over-year comparisons. On the weaker end, Jack in the Box has one of the lowest estimates at -4.9%, while CBRL Group is expected to report a -3.8% decline. Wingstop, which faced the toughest comparison from a year ago with a 20.9% gain, has already reported a -5.6% comp, below its -1.9% estimate.

Exhibit 8: Weakest Restaurant Same Store Sales Estimates: Q3 2025 Estimate vs. Q3 2024 Actual

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Source: LSEG I/B/E/S

On the positive side, there are notable standouts. Brinker International already reported an 18.8% SSS surpassing its 17.3% estimate and last year’s 13.0% growth. Similarly, Texas Roadhouse and Domino’s Pizza already beat their SSS estimates and delivered solid comps of 6.1% and 5.2%, respectively.

Exhibit 9: Strongest Restaurant Same Store Sales Estimates: Q3 2025 Estimate vs. Q3 2025 Actual

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Source: LSEG I/B/E/S

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