Leigh Drogen

About the Author Leigh Drogen

Leigh Drogen is the Founder and CEO of Estimize. Estimize is an open financial estimates platform which facilitates the aggregation of fundamental estimates from independent, buy-side, and sell-side analysts, along with those of industry experts, private investors and students. By sourcing estimates from a diverse community of individuals, Estimize provides both a more accurate and more representative view of expectations compared to sell side only data. Leigh started his career as a quant trader at Geller Capital, a White Plains, NY based fund where he ran strategies that looked at earnings acceleration and analyst estimate revision models, as well as price momentum and several sentiment indicators. Leigh later went on to be the founder of Surfview Capital, a New York based asset management firm that used many of the same strategies as Geller Capital, with a focus on higher beta names on an intermediate term time frame. His educational background includes focus in economics and international relations, specifically war theory. He is a graduate with honors from Hunter College in New York City. You can contact Leigh by emailing him at Leigh@estimize.com

Retail Results Lift Consumer Discretionary Earnings To 10.7%

In the last 2 ½ weeks as the retailers have wrapped up the Q4 earnings season, better-than-expected results have pushed consumer discretionary earnings growth up to 10.7% from the previous 9.7%. Revenues, which companies are having a harder time beating, have stayed roughly the same at 3.7% growth.

Some of the winners this quarter have of course been the home improvement retailers, Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW), and discounters such as Wal-Mart (NYSE:WMT) and Target (NYSE:TGT), who although missed their revenue targets, posted some impressive bottom-line beats. Those that struggled in the fourth quarter were the department stores, mainly Macy’s (NYSE:M) and J.C. Penney (NYSE:JCP), which noted sluggish holiday sales in comparison to prior years.


The teen retailers, which just kicked off today with Abercrombie & Fitch (NYSE:ANF), have also had a rough couple of years, and that doesn’t seem to be turning around this quarter. Abercrombie reported EPS of $1.15 this morning which missed the Estimize consensus by a penny, and revenues of $1.12B which missed both the Estimize and Wall Street consensus and represented the eighth consecutive quarter of declining sales growth. Fellow teen retailers American Eagle (NYSE:AEO) and Aeropostale (NYSE:ARO) report next week, and while the former is expecting an outcome similar to Abercrombie, Aeropostale is actually predicted to report slight year-over-year growth for profits and sales.


How are we doing?

Expectations for S&P 500 earnings growth for the fourth quarter stand at 6.3%. Revenues are anticipated to come in with 1.4% growth.



Health Care (24.2%). Notable industry: Biotechnology (65.0%).

Information Technology (17.6%). Notable industry: Semiconductors (32.0%)


Health Care (10.8%). Notable industry: Biotech (42.8%).

Information Technology (8.2%). Notable industry: Tech Hardware, Storage & Peripherals (15.6%)



Energy (-19.6%). Notable industry: Oil, Gas and Consumable Fuels (-20.8%)

Financials (-3.4%). Notable industry: Banks (-4.8%)


Energy (-13.3%). Notable industry: Oil, Gas and Consumable Fuels (­-15.5%).

Materials (-2.2%). Notable industry: Paper & Forest Products (­-18.0%).


Earnings: With 489 S&P 500 companies reporting thus far, 55% have beaten the Estimize consensus, 37% have missed and 8% have met. This is compared to Wall Street estimates, of which 68% of companies have beat on the bottom­-line, 22% have missed and 10% have met.

Revenue: 49% have beaten the Estimize consensus, while 51% have missed. For revenues, 56% of companies have beat the Wall Street estimate, while 44% have missed.

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