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.