For Immediate Release
Chicago, IL – November 25, 2019 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Macy’s M, Kohl’s KSS, Home Depot HD, Walmart WMT and Target TGT.
Making Sense of Retail Earnings
The picture emerging out of the Q3 earnings season for the traditional brick-and-mortar retailers is at best mixed, with a number of major players like Macy’s, Kohl’s and even Home Depot clearly missing the mark. Many others, including Walmart and Target, have kept the momentum going by coming out with impressive results.
The issues facing traditional retailers are longstanding and deal with the steady shift in consumer spending to the online medium and the associated drop in foot traffic at the physical facility. In response, these players have been rationalizing their physical footprint and investing in integrating the online offering with the physical store. Walmart and Target appear to be quite further along in this transition than others like Macy’s and we saw that in these companies’ Q3 results as well.
For the Retail sector as a whole, where we include the online players and restaurant companies in addition to the aforementioned traditional operators, we now have Q3 results from 32 of the 38 retailers in the S&P 500 index. Total earnings for these companies are up +1.2% on +9.5% higher revenues, with 65.6% beating EPS estimates and 53.1% beating revenue estimates.
This is a weaker showing than we have seen from the group in other recent periods.
The Q3 EPS beats percentage at 65.6% is the fourth lowest of all 16 Zacks sectors (Basic Materials, Energy, and Utilities are the only ones that have an even lower EPS beats percentage) while the revenues beats percentage is in the middle of the 16 sector pack.
S&P 500 Scorecard (as of Friday, November 22nd, 2019)
We now have Q3 results from 477 S&P 500 members or 95.4% of the index’s total membership. Total earnings (or aggregate net income) for these 477 companies are down -1.2% from the same period last year on +4.3% higher revenues, with 73% beating EPS estimates and 57.7% beating revenue estimates.
Looking at Q3 as a whole, combining the actual results from the 477 index members with estimates for the still-to-come companies, total earnings (or aggregate net income) is expected to be down -1.7% from the same period last year on +4.2% higher revenues.
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Target Corporation (TGT) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
Kohl's Corporation (KSS) : Free Stock Analysis Report
Macy's, Inc. (M) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research