Zacks Earnings Trends Highlights: Macy's, Wal-Mart, Target, Dollar Tree and Kohl's

 Zacks Earnings Trends Highlights: Macy's, Wal-Mart, Target, Dollar Tree and
                                    Kohl's

PR Newswire

CHICAGO, Nov. 22, 2013

CHICAGO, Nov. 22, 2013 /PRNewswire/ --Zacks Director of Research Sheraz Mian
says, "The focus lately has been on results from Retail sector, not so much on
how they did in Q3, but how they see the outlook for the holiday season
unfolding."

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Q4 Earnings Estimates Coming Down

With results from almost 97% of the S&P 500 members already out, the Q3
earnings season is effectively over. The focus lately has been on results from
Retail sector, not so much on how they did in Q3, but how they see the outlook
for the holiday season unfolding.

Macy's (NYSE:M-Free Report) results appeared fairly encouraging on that front,
but Macy's doesn't speak for the entire sector. Wal-Mart (NYSE:WMT-Free
Report) clearly is such a bellwether, but its results and outlook don't
inspire much confidence about what to expect from the sector as whole in Q4.
Results from others like Target (NYSE:TGT-Free Report), Dollar Tree
(Nasdaq:DLTR-Free Report) and Kohl's (NYSE:KSS-Free Report) confirm Wal-Mart's
dour outlook.

Fewer shopping days this holiday season is not only prompting retailers to
open their doors even earlier on Thanksgiving Day this year, but is likely
making it a more promotional affair as well. Overall, the retailers are
beating top-line expectations at a very low rate in Q3 relative to the last
few quarters and we should probably brace ourselves for negative bottom-line
surprises in Q4.

For the Q3 earnings season as a whole, total earnings for the 484 S&P 500
companies that have reported results already, as of Thursday morning November
21st, are up +4.9% from the same period last year, with 65.3% beating earnings
expectations with a median surprise of +2.53%. Total revenues for these
companies are up +3.0%, with 41.7% beating revenue expectations with a median
surprise of +0.12%.

The earnings and revenue growth rates for the 86.4% of Retail sector companies
in the S&P 500 that have reported already are modestly better than what we
have seen from those same companies in recent quarters. But the beat ratios,
specifically on the revenue side, remain very weak, with the sector's revenue
beat ratio the second worst of all 16 Zacks sectors in the S&P 500.

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