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“Annual top- and bottom-line guides were broadly raised following better-than-expected second quarter results, and, along with them, consensus estimates. For the upcoming quarter, some of the issues to watch remain the same — namely, persistent inflation, waning demand and pricing power amid elongated purchasing patterns, and margin and expense management. However, what we see in our proprietary data is that geopolitical risk now dominates mindshare, escalating to 71% expressing this as a concern from just 34% last quarter— and that was before the events of the past week in the Middle East. All the while, consumer metrics continue to deteriorate at the margin, with the knock-on effects of student loan resumption on the horizon. Still, even with some of the more pervasive economic and geopolitical factors impacting near-term sentiment, there are also continued pockets of strength and optimism that collectively contribute to an increasingly neutral stance. Technology and innovation — including the promise of AI — along with secular growth trends such as the energy transition and government infrastructure spending have padded outright bearish investor sentiment for now. With a little less than three months to go to close out this year, analyst and investor questions will jump to 2024 and those eager attempts should be thoughtfully redirected given increased uncertainty and economic landscape churn. Our results show investors are most interested in the bottom-line at this time, and reinforcing the long-term growth strategy and near-term plans to preserve profitability will serve to bolster investor confidence.”
Q3’23 Earnings Primer®
Rebecca Corbin, Founder and CEO
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