Q3'24 Inside The Buy-Side® Earnings Primer®

The Sector Beat: Consumer Discretionary – Q3’24

Earnings season continues to march on, demonstrating that it’s tough out there from a top-line perspective. Something to be aware of, more companies continue to highlight cost-cutting initiatives, raising the level, while layoff announcements and restructurings underpinned by headcount reductions are on the rise.

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The Sector Beat: Consumer Discretionary – Q2’24

Peak earnings season shaped out to be a dynamic one, and today’s jobs data has added to investor concerns we identified in our most recent Q2’24 Inside The Buy-Side® Earnings Primer® publication. As a result, the S&P 500 saw its worst decline today since 2022, and the Fed-funds futures now sees a 71.5% chance of a 50 basis point cut in September.

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The Sector Beat: Consumer Discretionary – Q1’24

There is a noticeable change in executive tone this quarter — one of more caution — as much of the sector grapples with fluctuating and bifurcating consumer buying habits, with pronounced pullbacks this quarter in discretionary spending evident across several industries, including dining and retail. Much hinges on the consistently strong employment environment, though we continue to see a bevy of layoffs as companies manage profitability in a slowing growth environment and as pricing power has slowed at the same time labor costs are climbing.

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The Sector Beat: Consumer Discretionary – Q4’23

The better-than-expected U.S. GDP, consumer confidence, and spending in various areas certainly point to a more buoyant U.S. consumer, but on the flipside is the burden of record credit card debt and borrowings – the current concern about which can best to described as a bombastic shoulder shrug.

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The Sector Beat: Consumer Discretionary – Q3’23

The markets welcomed a pause in interest rate hikes after the Fed’s Wednesday briefing, but the net effect of higher-for-longer rates on the consumer is anything but reason to celebrate.

We expect the next few quarters will be very telling, particularly as consumers drift through the holiday season and executives prepare to provide their 2024 outlooks. Indeed, with less than two months remaining in 2023, investor attention is increasingly focused on expectations for next year.

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The Sector Beat: Consumer Discretionary – Q3’23

There is little question that the consumer has held up better than most feared entering 2023. As a result, many of the companies in the consumer sector that have reported thus far have been able to navigate this environment due to conservative assumptions heading into the year.

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