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 To date, 176 of the 201 companies in our Retail/Restaurant Index have reported their EPS results for Q1 2024, representing 88% of the index. Of those companies that have reported their quarterly results, 73% announced profits that beat analysts’ expectations, while 1% delivered on-target results and 26% reported earnings that fell below estimates. The Q1 2024 blended earnings growth estimate now stands at 22.3%.The blended revenue growth estimate for the 201 companies in this index is 3.9% for Q1 2024. Of those companies that have reported their quarterly results so far, 51% announced revenue that exceeded analysts’ expectations and the remaining 49% reported that their revenue fell below analysts’ forecasts.Exhibit 1: LSEG Earnings Dashboard Source: LSEG I/B/E/S
 This Week In RetailBest Buy exceeded Q1 expectations in earnings, although it fell short on revenue and same-store sales (SSS). The electronics retailer attributed this to persistent high inflation, stating, “The mix of macro factors continue to create a challenging sales environment for our category during the quarter at our sales were slightly softer than our expectations” (Source: Best Buy Q1 2024 Earnings Call). Additionally, the accelerated tech purchases during the early stages of the pandemic, coupled with limited material innovation, have contributed to sustained lower demand for high-tech consumer electronics. Consequently, there’s a heightened focus on value and promotions among current purchasers. Nonetheless, the retailer has experienced growth in its paid membership base and remains optimistic about forthcoming upgrade cycles centered around AI. Best Buy has maintained its full-year guidance.Dick’s Sporting Goods surpassed first quarter expectations, reporting a robust 5.3% SSS, exceeding its projected 2.3%. The sporting goods retailer revised its full-year guidance upward, driven by increased transactions. Teen retailers also performed strongly this week, with Abercrombie smashing expectations and achieving its fourth consecutive quarter of double-digit comps. Similarly, American Eagle reported a stronger-than-expected SSS of 7.0%, surpassing its 5.0% SSS estimate.Kohl’s fell short of its Q1 earnings, revenue, and SSS estimates. During its earnings call, the department store cited economic pressures on customers, including high interest rates and inflation, while noting stable spending among high-income customers. However, middle-income customers continue to feel the impact of these factors. Kohl’s remains optimistic about the beauty segment and anticipates a successful launch of Babies R’ Us.Dollar General reported better-than-expected Q1 earnings, revenue, and SSS results. The discounter experienced an increase in store traffic and demand for its products.Here are the Q1 2024 earnings and same store sales estimates for the companies reporting this week:Exhibit 2: Same Store Sales and Earnings Estimates – Q1 2024 Source: LSEG I/B/E/S
 GuidanceSo far, 176 retailers have reported Q1 2024 earnings; of this group, 98 mentioned inflation.Looking ahead to Q2 2024, 21 retailers issued negative preannouncements, while five issued positive EPS guidance so far (Exhibit 3). Of those retailers offering revenue guidance, 24 warned of disappointing results, while twelve said revenue might be better than previously expected.Exhibit 3: Earnings and Revenue Guidance: Q2 2024Source: LSEG I/B/E/S
 Discount Levels – U.S. Online RetailersThe discount penetration (how much of the assortment is on sale) has declined this year. LSEG discovered this in a collaboration with Centric Market Intelligence, formerly StyleSage, which analyzes retailers, brands, online trends and products across the globe. This month’s discount penetration is matching last year’s May average of 32%.Exhibit 4: Average Discount Penetration: U.S. Online RetailersSource: Centric Market Intelligence, formerly StyleSage Co.Accordingly, the average percent discount in May has also declined to 35%, below last year’s 37.0%.Exhibit 5: Average Discount: U.S. Online RetailersSource: Centric Market Intelligence, formerly StyleSage Co.More By This Author:Russell 2000 Earnings Dashboard 24Q1 – Thursday, May 30
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