The Q1 earnings season has come to an end for 10 of the 16 Zacks sectors in the S&P 500 index, with just a few companies still to come in the remaining sectors. We will get a trickle of earnings releases this week, with a total 90 companies coming out with first quarter reports, including 6 S&P 500 members. By the end of this week, we will have seen results from 494 S&P 500 members.
Any way you look at it, the Q1 reporting season turned out to be very weak, with a disconcerting mix of Energy sector weakness, dollar strength and global growth challenges not only weighing on Q1 results, but also causing estimates for the current quarters to come down. While the magnitude of negative revisions for the current period is tracking below what we saw at the comparable stage for Q1, yet it is nevertheless negative.
We will discuss what’s happening to current quarter estimates a little later, but let’s focus on the Retail sector for now which has been producing most of the earnings releases lately.
Retail Sector Scorecard Â
The Retail sector got off to a good start this earnings season, with aggregate growth rates and beat ratios tracking better relative to pre-season expectations as well as relative to other sectors. But the initial momentum was mostly due to strength in results from online vendors and restaurant operators who were heavily represented in the sample at that stage. The momentum became hard to sustain as department stores and the big-box retailers came out with numbers. Overall, the sector’s Q1 results have been mixed, which isn’t bad given the broad-based weakness in most other sectors. Â
As of Friday May 22nd, we have seen Q1 results from 37 retailers in the S&P 500 index, out of the 41 total in the index. Total earnings for these 37 retails are up +4.7% from the same period last year, on +5.4% higher revenues, with 73% beating EPS estimates and 48.6% coming ahead of top-line expectations.
The charts below compare the sector’s results thus far with what these same 37 retailers reported over the past year.
