Are Analysts Optimistic About Retail Earnings Heading Into Black Friday?

With “Black Friday” today, the performance of retailers will be a focus for the markets. Since September 30, the S&P 500 Retailing industry group has recorded a 7.9% increase in price (to 1643.40 from 1523.19). As of today, which retailers in the S&P 500 are projected to see the highest and lowest year-over-year earnings growth for the fourth quarter? Which retailers in the index have seen the largest upward and downward revisions to earnings estimates for Q4 over the past two months?

In terms of year-over-year earnings growth, nine of the 13 retail sub-industries in the S&P 500 are predicted to report growth in earnings for the fourth quarter, led by the Food Distributors (18.9%) and Internet & Direct Marketing Retail (16.7%) sub-industries. On the other hand, four of the 13 retail sub-industries in the S&P 500 are predicted to report a decline in earnings, led by the General Merchandise Stores (-3.6%) and Automotive Retail (-3.3%) sub-industries.

For upward revisions to earnings estimates, six sub-industries have recorded an increase in expected earnings growth since the start of the quarter, led by the Department Stores (to 8.7% from 7.3%) and Hypermarkets & Super Centers (to 2.3% from 1.1%) sub-industries. In the Department Stores sub-industry, Macy’s (to $2.48 from $2.40) has recorded the largest increase in the mean EPS estimate for Q4 during this period. In the Hypermarkets & Super Centers sub-industry, Wal-Mart Stores (to $1.35 from $1.33) has seen the largest increase in the mean EPS estimate for Q4 over this period.

Looking at downward revisions to earnings estimates, seven sub-industries have recorded a decrease in expected earnings growth since September 30, led by the Specialty Stores (to -1.1% from 3.6%), Automotive Retail (to -3.3% from -1.6%) and Distributors (to 4.6% from 6.3%) sub-industries. In the Specialty Stores sub-industry, Signet Jewelers (to $4.00 from $4.53) has witnessed the largest decrease in the mean EPS estimate for Q4 during this period. In the Automotive Retail sub-industry, Advance Auto Parts (to $0.62 from $0.75) has recorded the largest decline in the mean EPS estimate for Q4 since September 30. In the Distributors sub-industry, Genuine Parts Company (to $1.03 from $1.07) has recorded the largest decrease in the mean EPS estimates for Q4 over the past two months.