With the year-over-year CPI number falling below 3.0% in recent months, did fewer S&P 500 companies comment on inflation during their earnings conference calls for the second quarter of 2024 compared to last year and two years ago?
The answer is yes. FactSet Document Search (which allows users to search for key words or phrases across multiple document types) was used to answer this question. Through Document Search, FactSet searched for the term “inflation” in the conference call transcripts of all the S&P 500 companies that conducted earnings conference calls from June 15 through September 13.
Of these companies, 235 cited the term “inflation” during their earnings calls for the second quarter. This number is below the number of 297 for Q2 2023 and below the number of 411 for Q2 2022. The second quarter also marks the second-lowest number of S&P 500 companies citing “inflation” on earnings calls going back to Q2 2021 (216) and the second-straight quarter in which less than 250 S&P 500 companies cited “inflation” on earnings calls.
However, it should also be noted that the number of S&P 500 companies citing “inflation” on earnings calls for Q2 2024 is still well above the 10-year average of 182.
At the sector level, the Financials (43) and Industrials (41) sectors have the highest number of companies that cited “inflation” on earnings calls for Q2. However, the Consumer Staples (86%) sector has the highest percentage of companies that cited “inflation” on their earnings calls for Q2 during this period.
What are these companies saying about inflation on their earnings calls? Transcript Assistant (FactSet’s interactive generative AI solution that extracts the most salient points from earnings call transcripts with questions from users and pre-populated prompts) can be used to answer this question.
For example, Transcript Assistant generated the following summary of all the statements about “inflation” from the earnings call transcript of Darden Restaurants on June 20:
The document mentions inflation in several instances. The company's Senior Vice President & Chief Financial Officer, Rajesh Vennam, mentions that they are expecting total inflation of approximately 3% for fiscal 2025, which includes commodities inflation of approximately 2% and labor inflation of approximately 4%. He also mentions that the company's pricing for the year is expected to be more in line with inflation, in the 2.5% to 3% range. The company's President, Chief Executive Officer & Director, Ricardo Cardenas, mentions that consumers are generally concerned about inflation and are becoming more concerned about the job market. He also mentions that the company's pricing has been kept modest over the last five years, which has given them some flexibility.*
*Results may vary based on prompts used
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