{"id":1533774,"date":"2025-05-02T19:00:00","date_gmt":"2025-05-02T23:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1533774"},"modified":"2025-05-02T19:00:00","modified_gmt":"2025-05-02T23:00:00","slug":"peak-earnings-pulse-consumer-pullback-theme-gains-momentum","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/peak-earnings-pulse-consumer-pullback-theme-gains-momentum\/1533774\/","title":{"rendered":"Peak Earnings Pulse:\u00a0Consumer Pullback Theme Gains Momentum"},"content":{"rendered":"

Peak Earnings Pulse:\u00a0Consumer Pullback Theme Gains Momentum<\/span><\/p>\n

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A series of disappointing earnings (with peak earnings season this week) from fast-food chains, beverage giants, and consumer companies underscores persistent financial strain on low- and middle-income consumers\u2014pressured by lingering Biden-era inflation and increasing fears over tariffs and mounting economic uncertainty under the current administration.\u00a0<\/p>\n

<\/a><\/p>\n

On Thursday, McDonald’s reported same-store sales that tumbled 3.6% in the US, the largest year-over-year decline since the\u00a0second quarter of 2020. The decline was mainly because of sagging visits at stores nationwide.\u00a0<\/p>\n

McDonald’s CEO\u00a0Chris Kempczinski wrote in a statement that consumers “are\u00a0grappling with uncertainty.” He noted that\u00a0McDonald’s will be able to “navigate even the toughest of market conditions and gain market share.”\u00a0<\/p>\n

Citi analyst\u00a0Jon Tower told clients that\u00a0McDonald’s soft sales\u00a0should “come as little surprise” to investors, with the fast-food chain “speaking to a muted outlook\/challenged global consumer back in mid-February and category high-frequency data\/other company 1Q updates all suggesting lower-income guests were pulling back.”\u00a0<\/p>\n

<\/a><\/p>\n

On Friday morning,\u00a0Wendy’s slashed its sales outlook for the year, signaling consumers are dialing back their store visits and ticket spending.\u00a0<\/p>\n

Wendy’s CEO\u00a0Kirk Tanner stated that the US market faced a “challenging consumer environment.” The fast-food chain warned that the pullback in spending was more acute with customers making below $75,000.\u00a0<\/p>\n

Last week,\u00a0Chipotle missed first-quarter revenue estimates and reported\u00a0that same-store sales had fallen for the first time since 2020.\u00a0<\/p>\n

Chipotle CEO Scott Boatwright warned investors that a “slowdown in consumer spending” materialized, forcing it to lower the top end of its full-year same-store sales growth outlook.\u00a0<\/p>\n

At the beginning of the week,\u00a0Starbucks reported\u00a0disappointing global comparable sales and profit, with sliding US demand.\u00a0<\/p>\n

Starbucks CEO Brian Niccol’s turnaround strategy for the coffee chain appears to have stumbled after the company reported four straight quarters of declining sales.<\/p>\n

“Our financial results don’t yet reflect our progress, but we have real momentum with our ‘Back to Starbucks’ plan,” Niccol told investors.<\/p>\n

Yum Brands, the parent of KFC, Pizza Hut, and Taco Bell, also reported this week. Yum posted a mixed first quarter, with a sales slowdown that began to soften in\u00a0January but improved through February and March.\u00a0<\/p>\n

In the consumer goods space,\u00a0Procter & Gamble reported\u00a0mixed quarterly results as demand for its products fell. Executives of the company,\u00a0which owns Tide and Charmin,\u00a0slashed their full-year outlook for\u00a0earnings per share and revenue based on consumer slowdown and tariff uncertainty.<\/p>\n

The broader pessimism from QSRs and consumer-facing companies mirrors the sharp downturn in the Conference Board’s confidence index, which just sank to a 14-year low<\/a>.<\/p>\n

<\/a><\/p>\n

Labor market conditions also weakened<\/a>.<\/p>\n

<\/a><\/p>\n

In markets, Goldman analyst\u00a0Nelson Armbrust said consumer discretionary stocks were “net sold for a fourth straight month, driven by short sales outpacing long buys ~5 to 1.”\u00a0<\/p>\n

<\/a><\/p>\n

Goldman’s take: “Sentiment remains very soft in Consumer, due to both sourcing and tariff concerns, while investors are also focused on the consumer slowdown theme.”\u00a0<\/p>\n

<\/a><\/p>\n

More broadly, with peak earnings season now behind us, Goldman Chief Equity Strategist David Kostin told clients Friday that results have held up relatively well:<\/p>\n

1Q 2025 year\/year earnings growth is tracking at 12%, 6 pp higher relative to the start of the reporting season. Better than expected margins have driven the positive surprise so far with the average earnings surprise tracking at 5% vs. an average sales surprise of 1%.<\/em><\/p>\n

<\/a><\/p>\n

Kostin also noted:\u00a0<\/p>\n

<\/a><\/p>\n

One lingering question heading into May is whether the slide in consumer spending and sentiment will worsen\u2014or if it can be reversed by a series of positive trade headlines<\/a>.\u00a0<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nFri, 05\/02\/2025 – 15:00<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/peak-earnings-pulse-consumer-pullback-theme-gains-momentum<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Peak Earnings Pulse:\u00a0Consumer Pullback Theme Gains Momentum A series of disappointing earnings (with peak earnings season this week) from fast-food chains, beverage giants, and consumer…<\/p>\n","protected":false},"author":0,"featured_media":1533775,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1533774","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1533774","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1533774"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1533774\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1533775"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1533774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1533774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1533774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}