NEW YORK: Starbucks Corp, Ford Motor Co and the owner of Chili’s Grill & Bar easily surpassed Wall Street’s earnings estimates in their most recent quarter. But for investors, they’re stoking worries about a slowdown.
That’s because all three companies left their annual profit forecasts unchanged, suggesting they’re not convinced the robust results will last.
Starbucks shares fell yesterday by the most in three years after executives pointed to “economic uncertainties” around the world.
That echoed Ford’s warning that the economic backdrop is “opaque.”
The corporate caution underscores the cloudy outlook for the United States economy as the Federal Reserve raises interest rates and banking turmoil fuels fear of a credit crunch.
The concern is particularly acute for sellers of discretionary goods as doubts swirl about the continued resilience of US consumers as they contend with lingering inflation and dwindling savings.
“There’s a split perspective on how bad the consumer really is,” said Jennifer Bartashus, a retail analyst at Bloomberg Intelligence.
“There are people who think a recession is right around the corner, and the companies that are holding their forecasts steady are taking a cautious view on the economic outlook.”
Leaving forecasts unchanged early in the year makes it easier for corporate bosses to hand investors an upside surprise later.
And plenty of companies, from General Motors Co to PepsiCo Inc, have lifted their outlooks in recent weeks.
But others eschewed the halo of a “beat-and-raise” quarter for what could be called the “beat-no-raise” approach.
Like Ford, Stellantis NV took that path. So did Coca-Cola Co, Molson Coors Beverage Co, Pfizer Inc, Norwegian Cruise Line Holdings Ltd, Sherwin-Williams Co and Brinker International Inc, which owns Chili’s. — Bloomberg