Both Bricks and Clicks S&P 500 Retailers Reporting Double-Digit Earnings Growth for Q1

Since the start of the year (December 31), the S&P 500 Retailing industry group has recorded an 18.4% increase in price, compared to a 1.8% increase for the S&P 500 as a whole. The next few weeks will be focus weeks for retail earnings for the S&P 500, as 17 of the 46 remaining companies in the index that have yet to report actual results for the first quarter are retailers. As of today, which retailers in the S&P 500 are reporting (or are expected to report) the highest and lowest year-over-year earnings growth for the first quarter? Which retailers in the index have seen the largest changes to earnings numbers for Q1 since March 31?

In terms of year-over-year earnings growth, all 13 retail sub-industries in the S&P 500 are reporting (or are expected to report) earnings growth for the first quarter. Ten of these 13 retail sub-industries are reporting (or are expected to report) double-digit earnings growth, led by the Internet & Direct Marketing Retail (72%) sub-industry. However, excluding the Internet & Direct Marketing Retail sub-industry, the remaining 12 retail sub-industries in the S&P 500 are reporting (aggregate) earnings growth of 14.0%. Thus, both “bricks” and “clicks” retailers are reporting double-digit earnings growth for the first quarter.

In terms of upward changes to earnings, seven sub-industries have recorded an increase in earnings growth since March 31, led by the Internet & Direct Marketing Retail (to 72.2% from -3.0%) and Food Distributors (to 29.5% from 23.5%) sub-industries. In the Internet & Direct Marketing Retail sub-industry, the positive EPS surprise reported by Amazon.com ($3.27 vs. $1.24) was the largest contributor to the increase in earnings growth for this sub-industry during this period. In the Food Distributors sub-industry, the positive EPS surprise reported by Sysco ($0.67 vs. $0.63) was the largest contributor to the increase in earnings growth for this sub-industry over this period.

In terms of downward changes to earnings, five sub-industries have recorded a decrease in earnings growth since March 31, led by the Distributors (to 14.6% from 20.9%) and Automotive Retail sub-industries. In the Distributors sub-industry, the negative EPS surprises reported by both Genuine Parts Company ($1.27 vs. $1.32) and LKQ Corporation ($0.55 vs. $0.59) caused the decrease in earnings growth for this sub-industry over this period. In the Automotive Retail sub-industry, the negative EPS surprise reported by CarMax ($0.67 vs. $0.87) was the largest contributor to the decrease in earnings growth reported by this sub-industry during this period.