Q1 2019 U.S. Retail Scorecard - May 21 Update

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Includes: DDS, EMTY, FDIS, FTXD, FXD, JCP, JHMC, KSS, M, PMR, RCD, RETL, RTH, TJX, VCR, XLY, XRT
by: Lipper Alpha Insight
Summary

Retailers continue to report Q1 2019 earnings, and 35 retailers have mentioned tariffs during their Q1 earnings call.

Most of the department stores registered negative same-store sales.

Seventy-two percent of companies in our Retail/Restaurant Index have reported Q1 2019 EPS.

By Jharonne Martis

Retailers continue to report Q1 2019 earnings, and 35 retailers have mentioned tariffs during their Q1 earnings call. The department stores really struggled and posted weak results on May 21. JW Nordstrom (NYSE:JWN) said during its earnings call, "during the first quarter, we had some executional misses with the customer experience that had an impact on sales across full-price and off-price, both in stores and online." (Source: Q1 2019 Nordstrom earnings call, 05/21/2019)

Most of the department stores registered negative same-store sales. Only Dillard's (NYSE:DDS) and Macy's (NYSE:M) had positive sales, and posted the strongest SSS results among the department stores (Exhibit 1). J. C. Penney (NYSE:JCP) mentioned in its earnings call that it has already experienced a minimal impact from tariffs that went into effect last year. However, looking forward, both J. C. Penney and Kohl's (NYSE:KSS) expect a more meaningful impact. As a result, Kohl's outlook for the rest of the year is turning conservative and the company lowered its full-year earnings guidance.

Both department stores mentioned the home category in their calls. J. C. Penney will no longer be offering appliances and furniture. Meanwhile, Kohl's said this sector is very competitive and it has experienced aggressive pricing and promotions.

EXHIBIT 1: DEPARTMENT STORES SSS

Source: I/B/E/S data from Refinitiv

On the flip side, TJX beat earnings, revenue, same-store sales expectations and it raised full-year guidance. The company consistently has done well, and has now posted 19 consecutive quarters of customer traffic increases. This was a primary driver of sales, which underlines the strength of its customer loyalty.

Reporting this week

Here are the same-store sales and earnings results for retailers reporting this week:

EXHIBIT 2: SAME-STORE SALES AND EARNINGS RESULTS - WEEK OF MAY 21, 2019

Source: I/B/E/S data from Refinitiv

Dashboard

Seventy-two percent of companies in our Retail/Restaurant Index have reported Q1 2019 EPS. Of the 149 companies in the index that have reported earnings to date, 72% have reported earnings above analyst expectations, 6% reported earnings in line with analyst expectations and 22% reported earnings below analyst expectations. The Q1 2019 blended earnings growth estimate is 7.7%.

The 1Q 2019 blended revenue growth estimate is 4.9%. Fifty-four percent have reported revenue above analyst expectations and 46% reported revenue below expectations.

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.