Retailers Get Ready to Report Earnings Amidst Growing Fears of a Consumer Slowdown

 | Nov 13, 2023 18:43

  • An impressive winning streak on the three major indices came to an end late last week as fears of sustained higher interest rates hit markets
  • This week 1,410 companies are expected to report for Q3, 12 from the S&P 500.
  • All eyes will be on retail this week with results expected from Home Depot, Target Corporation, The TJX Companies, Walmart, Macy's, Gap Inc., Ross Stores, and more.
  • Potential Surprises this week: Catalent, Henry Schein.

    • The hope for interest rate cuts in the near term as well as falling yields is what propelled major indices to multi-day rallies to start out November. It was the ending of those two things that snapped the longest winning streak in two years late last week. On Thursday, comments from Federal Reserve Chair Jerome Powell suggested that the Fed's work to reduce inflation was likely not done yet, causing the S&P 500, DJIA and Nasdaq 100 to all post losses.

    With peak earnings season complete, investors will be looking to the final leg of the Q3 season as retailers report in the coming weeks. Commentary from these companies will provide a read on the US consumer which has been hard to pin down as of late on account of mixed data. Last week results from apparel retailers began to trickle in and it was clear that while many companies continue to beat on the bottom-line, top-line growth has been more of a struggle. Both Under Armour (NYSE:UA) andSteven Madden Ltd (NASDAQ:SHOO) beat on EPS but came in line on revenues. Coach parent company Tapestry (NYSE:TPR) beat on EPS but missed revenues. A bright spot in the space last week was RealReal Inc (NASDAQ:REAL) which surpassed both metrics, causing the stock to pop 35% since the report.

    With 92% of S&P 500 constituents reporting at this point, the blended EPS growth rate for Q3 has grown to 4.1% vs. last week's 3.7%.

    h2 Earnings on Deck - Week of November 13, 2023/h2

    Peak earnings season is now in the rearview mirror, but there are still plenty of companies left to report for the third quarter. This week we expect earnings releases from 1,410 publicly traded companies (out of our universe of 10,000), with 12 of those coming from S&P 500 companies. There will be a big focus on retailers with reports from Home Depot Inc (NYSE:HD), Target Corporation (NYSE:TGT), TJX Companies Inc (NYSE:TJX), Walmart Inc (NYSE:WMT), Macy’s Inc (NYSE:M), Gap Inc (NYSE:GPS), Ross Stores Inc (NASDAQ:ROST) and more.