SolStock/E+ via Getty Images By Jharonne Martis LSEG IFR Markets forecasts a challenging development for Q2 U.S. retail sales, with overall and ex-autos sales anticipated to increase by only 0.2% in May 2024. The control group is expected to fare slightly better with a 0.4% rise, though this still reflects a sluggish start to the quarter following April’s 0.3% decline. Unit auto sales experienced modest growth for the month, reaching an annualized rate of 15.90 million, marking the fastest pace this year. Meanwhile, gas prices have moderated after a period of rapid increases. However, the downturn in home sales since the beginning of the year suggests limited demand for related goods. Exhibit 1: U.S. Retail Sales – May 2024 Source: LSEG IFR Markets Outlook – Q2 2024 Earnings Growth: Retail/Restaurant Industries For Q2 2024, the LSEG Retail/Restaurant Index is looking at a 6.6% blended estimated earnings growth rate and a 1.6% blended estimated revenue growth rate. Both growth rates represent a significant slowdown in consumer spending, compared to Q1 2024. Five out of the ten consumer-related industries have turned positive. The Broadline Retail sector continues to be on track to record one of the highest estimated earnings growth rates in the second quarter, a 51.0% surge over last year’s level (Exhibit 2). On the flip side, the Personal Care Products is on track to post the weakest estimated earnings growth rates in the second quarter at -6.6%. Exhibit 2: Q2 2024 Earnings Growth Rates: LSEG Retail and Restaurant Index Source: LSEG I/B/E/S Discount Levels – U.S. Online Retailers The discount penetration (how much of the assortment is on sale) has declined this year. LSEG discovered this in collaboration with Centric Market Intelligence, formerly StyleSage, which analyzes retailers, brands, online trends, and products across the globe. Despite the recent Memorial Day discounts in May, the year-to-date average is now at its lowest point in over five years. Exhibit 3: Average Discount Penetration: U.S. Online Retailers Source: Centric Market Intelligence, formerly StyleSage Co. Accordingly, the average percent discount in June has also declined to 34%, below last year’s 38.0%. Exhibit 4: Average Discount: U.S. Online Retailers Source: Centric Market Intelligence, formerly StyleSage Co. Original Post Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.