Here’s a bunch of interesting things companies said about the world this week
Wall Street is midway through the earnings cycle with more than half of the S&P 500 companies reporting results this week, and while beats and misses dominate the headlines — corporate results are not just about numbers. Companies often offer clues about what lies ahead for the economy and their businesses.
US consumers remain cautious
McDonald’s (MCD), CEO Stephen Easterbrook
“Clearly, it’s been fairly well documented on the consumer slowdown across most consumer segments… We’re not immune from what’s happening in the outside world… I think, generally, there’s just a broader level of uncertainty in consumers’ minds… People are slightly mindful of an unsettled world. And when people are uncertain, when families are uncertain, caution starts to prevail, and they start to hold back on spending.”
Starbucks (SBUX), CEO Howard Schultz
“What we did not and could not have fully anticipated was the profound weakening in consumer confidence in [Q2] that has caused sharp declines in QSR and restaurant traffic overall and has many of our competitors struggling with negative transaction comps… Starbucks is not immune to macro challenges that impact our competitors and retail overall.”
Apple (AAPL), CEO Tim Cook
“We face some challenges in Greater China, as the economic environment has slowed down since the beginning of the year. This is reflected in consumer confidence and retail spending.”
Coca-Cola (KO), COO James Quincey
“China… no question, the overall consumer environment is weakening due to the economy’s economic transition… We always knew that for a country as large as China, transitioning to a consumer-led economy was going to have its challenges. Those may have turned out to be more than we expected in the short-term… [There are] strong affordability needs across the rural and blue-collar areas.”
Brexit and global economic uncertainty
Caterpillar (CAT), CEO Doug Oberhelman
“And the gist of that is just everything that we’re seeing in the economy today around the world. Additional risk—everything from the results of the Brexit vote and the short-term uncertainty that that causes, the trouble we’ve seen in Turkey, all the negative rhetoric around the US elections. Oil prices have come off a little over the last couple of months. It’s not any one thing, I would say. And we said this in the outlook. You know, we have sluggish economic growth throughout the world in general, but not enough to drive growth in our end markets. And the news we’ve seen over the last few months is definitely not giving us more confidence.”
Texas Instruments (TXN), CFO Kevin March
“The British economy is probably about 4% of the global GDP, so even if there’s a wobble inside that economy, it’s going to be really hard for us to be able to detect it.”
3M (MMM), CEO Inge Thulin
“There is no reason for us to change the strategy in Europe based on the outcome of the Brexit. No reason for us to do that.”
“What we’re seeing is that over time, particularly as the US industry has started to plateau, we’ve seen a very gradual, modestly rising incentive level... We see next year’s industry [sales] will be weaker than this year,” Shanks said of the U.S. market. “We don’t see growth at least in the near term.”
AutoNation (AN), CEO Mike Jackson
“We achieved record EPS from continuing operations. We benefited from our opportunistic capital allocation strategy, including acquisitions and share repurchase, and we began to see the results of adjusting our cost structure and inventory levels to the current industry selling environment. We remain focused on our strategy to manage costs and reduce our inventory levels going forward, and we will continue to take advantage of capital allocation opportunities.”
