Can Retail Earnings Hold up in the face of the Delta Variant?

Earnings releases from traditional brick-and-mortar retailers in recent days have been as positive and strong as has been the trend across other sectors in the Q2 reporting cycle.

Driving this trend is a combination of favorable consumer fundamentals and the emergence of viable business models that blend digital access with these operators’ existing physical footprint. While a number of retailers like Walmart WMT were already moving in that direction before the pandemic, the transition was accelerated by Covid-related business disruptions.

A case in point is Macy’s M, which had almost been written off as a viable player in the space before the pandemic, but appears to have really turned around its fortunes, as the beat-and-raise Q2 earnings report confirms.

For the sector scorecard, we now have Q2 results from 76.5% of retailers in the S&P 500 index. Total Q2 earnings for these retailers are up +46.3% on +14.3% higher revenues, with a record 92.3% of the retailers beating EPS and revenue estimates. This is a notably better showing from this group of retailers relative to what we have been seeing from the group in recent periods, as the comparison charts below show

For more details about the Q2 earnings season and evolving expectations for Q3 and beyond, please check out our weekly Earnings Trends report >>> Strong Retail Sector Earnings

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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