Retail Earnings: Consumer Confidence Doesn't Equal Sales Growth
Estimize | Feb 24, 2015 01:31PM ET
Home Depot (NYSE:HD) reported earlier Tuesday, with EPS for Q4 coming in at $1.00, topping both the Estimize and Wall Street consensus by a large margin and growing 37% over Q4 2013. In fact, the $0.11 beat against the Street was the largest beat by the home improvement retailer in over 15 years. Revenues were equally as impressive at $19.16B vs. the Estimize consensus of $18.73B, increasing 8% YoY. This bodes well for Lowe's (NYSE:LOW)’s which will report Wednesday.
Also Tuesday morning, we continued to see disparities in the restaurant industry, with Domino's (NYSE:DPZ) releasing disappointing bottom-line results and Cracker Barrel (NASDAQ:CBRL) putting up extremely impressive numbers. Domino’s EPS for Q4 settled at $0.91, three pennies shy of the Estimize consensus. Despite the profit miss, the company was able to post revenue of $643M, $25M ahead of the Estimize prediction. Top-line results were driven by stronger sales at home and a push to expand overseas, while margins suffered as the company struggled to expand domestically due to stiff competition in the pizza-delivery space.
Cracker Barrel on the other hand posted EPS of $1.93, well ahead of the Estimize consensus of $1.61 and the Wall Street consensus of $1.60, growing 24% YoY. Revenues also came in better-than-expected at $756 vs. $732M from Estimize. The company saw increased traffic in the fourth quarter due to mild weather and low gasoline prices, which encouraged consumer spending. As a result, the casual dining company now expects fiscal 2015 EPS in the range of $6.40 - $6.50 in comparison to the previous forecast of $5.95 - $6.10.
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Lastly, Macy's (NYSE:M), the second largest multi-line retailer in the S&P 500, posted weaker-than-expected results for the most recent quarter. Earnings per share of $2.44 missed the Estimize consensus by a penny, but managed to narrowly beat the Street’s expectation by the same amount. Revenues of $9.36B fell short of both estimates. Despite a more confident U.S. consumer that has more discretionary income to allocate, Macy’s suffered from sluggish holiday sales as more people choose to spend on electronics, autos and healthcare. As a result, the retailer’s 2015 outlook is for EPS in the range of $4.70 - $4.80, the top end of which misses analysts’ predictions by about $0.05.
Tuesday night brings results from Boston Beer Company (NYSE:SAM), Papa John (NASDAQ:PZZA), Hewlett-Packard (NYSE:HPQ) and HomeAway (NASDAQ:AWAY), among others.
How are we doing?
Expectations for S&P 500 earnings growth for the fourth quarter stand at 6.2%. Revenues are anticipated to come in with 2.0% growth.
Earnings:
- Health Care (24.2%). Notable industry: Biotechnology (65.0%).
- Information Technology (17.5%). Notable industry: Semiconductors (32.0%)
Revenues:
- Health Care (10.7%). Notable industry: Biotech (42.8%).
- Information Technology (8.5%). Notable industry: Tech Hardware, Storage & Peripherals (16.2%)
Earnings:
- Energy (-19.5%). Notable industry: Oil, Gas and Consumable Fuels (-20.8%)
- Financials (-3.4%). Notable industry: Banks (-4.8%)
Revenues:
- Energy (-13.5%). Notable industry: Oil, Gas and Consumable Fuels (-15.7%).
- Materials (-2.2%). Notable industry: Paper & Forest Products (-18.0%).
Earnings: With 448 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, 55% of companies have beat the Wall Street estimate, while 45% have missed.
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