To date, 143 of the 194 companies in our Retail/Restaurant Index have reported their EPS results for Q3 2024, representing 74% of the index. Of those companies that have reported their quarterly results, 62% announced profits that beat analysts’ expectations, while 5% delivered on-target results and 33% reported earnings that fell below estimates. The Q3 2024 blended earnings growth estimate now stands at 7.1%.The blended revenue growth estimate for the 194 companies in this index is 3.6% for Q3 2024. Of those companies that have reported their quarterly results so far, 53% announced revenue that exceeded analysts’ expectations and the remaining 47% reported that their revenue fell below analysts’ forecasts.
Exhibit 1: LSEG Earnings Dashboard(Click on image to enlarge)
Source: LSEG I/B/E/S
This week in retail
As forecast by StarMine, Walmart () delivered an impressive earnings report, exceeding expectations across key metrics. The retailer posted strong Q3 results, surpassing estimates for earnings, revenue and same-store sales (SSS). Notably, Walmart exceeded its initial 15% e-commerce growth estimate, reporting a robust 27% increase and raising its full-year guidance.During the earnings call, the company expressed confidence, highlighting a 28% surge in advertising revenue and a 22% increase in membership income. Growth in customer transactions and units—both in stores and online—remains solid, with particularly strong engagement from higher-income households.Walmart also reported positive seasonal trends, benefiting from back-to-school and Halloween sales, and is optimistic about the upcoming holiday season. The company noted that U.S. consumers remain resilient, with shopping behaviors largely unchanged over the past several quarters. Customers continue to focus on maximizing their budgets while seeking convenient, time-saving options (Source: Walmart Q3 2024 Earnings Call).Lowe’s () delivered stronger-than-expected Q3 earnings, revenue, and same-store sales (SSS) results, but its cautious outlook on the housing market recovery weighed on investor sentiment. Despite raising its full-year guidance, the stock took a hit today amid concerns about a slower-than-expected recovery in housing.Looking ahead to retail earnings this week, Target () is poised to report a 1.4% growth in same-store sales, marking its second consecutive quarter of positive comps. The retailer holds an 86 out of 100 on the StarMine Smart Holdings Model, reflecting strong confidence from buy-side analysts. Analysts polled by LSEG are optimistic about Target’s grocery pricing strategy, which is expected to drive increased foot traffic.Meanwhile, analysts polled by LSEG are already bullish on Gap’s () Q3 performance. The consensus for Gap’s Q3 2024 EPS is $0.58. However, there’s a five-star rated analyst with a very accurate rating that published a Bold Estimate, which is different (in this case higher) than the consensus estimate. The analyst expects Gap to report EPS of $0.62, above the mean. This suggests that it’s likely that Gap will beat earnings and post a positive surprise.The StarMine SmartEstimate is a weighted average of analyst estimates, with more weight given to more recent estimates and more accurate analysts. Our studies have shown that when the SmartEstimate differs from the consensus (I/B/E/S mean) by more than 2%, the company is likely to post subsequent earnings surprises directionally correct 70% of the time. This percentage difference is referred to as the Predicted Surprise (PS%) (Exhibit 2).
Exhibit 2: Gap StarMine SmartEstimate and Predicted Surprise %: Q3 2024
Source: LSEG WorkspaceHere are the Q3 2024 earnings and same store sales estimates for the companies reporting this and next week:
Exhibit 3: Same Store Sales and Earnings Estimates – Q3 2024(Click on image to enlarge)
Source: LSEG I/B/E/SMore By This Author:John Malone M&A Cleanup Costs Minority Investors S&P 500 Earnings Dashboard 24Q3 – Friday, Nov. 15The Global ETF Industry Is In A Gold Rush
U.S. Retail Earnings Update – Tuesday, Nov. 19
