CHART OF THE DAY: Overly Bullish Retail Growth Expectations

Editor's Note: Below is a chart and brief excerpt from today's Early Look written by Hedgeye U.S. Macro Analyst Christian Drake. Click here for more information on how to subscribe. 

CHART OF THE DAY: Overly Bullish Retail Growth Expectations  - WMT CoD2

Retail growth expectations are overly bullish.  The Chart of the Day says it all…it shows the consensus EPS growth rate for a basket of bellwether names in the retail sector. After bottoming in FY15 (WMT FY16) consensus has numbers accelerating to 10% and 12% in FY16 and FY17 respectively. Compare that to WMT guiding to -10% in its FY16 (calendar ‘15), -9% at the midpoint of the guide in FY17 (calendar ’16), and flat in FY 18 (calendar ’17). Bottom line…either WMT sandbagged, or growth for others will come down. Such a significant gap has not sustained itself for any more than a few quarters.