Companies all across America are warning business is slowing down. Here are 6 you should pay close attention to.
- Amazon, Nike, and Shake Shack are just a few US companies that have this quarter warned that growth is slowing.
- Nike said in its third-quarter earnings report out Thursday that while its profits were robust its North American sales growth slowed.
- A handful of notable US companies have warned of a slowdown as economic growth cools around the world.
Since the start of the year, some of the most visible companies in the US have warned growth is cooling in one segment or another of their businesses - at a time when global economic growth is under a microscope.
Apple set the stage back in January with a revenue warning. Then weeks later, the industrial giant Caterpillar said its outlook for this year assumed "modest" sales growth. Amazon offered weak sales guidance in February, and FedEx said this week that its sales and profits came up short due to macroeconomic weakness.
Then there was the homebuilder Lennar. And Shake Shack. And Nike.
Of course, each corporation carries its own unique story, structure, and outlook. And each sector comes with its own idiosyncratic challenges. But even as stocks have staged an impressive rebound this year, investors and analysts alike can't help but take notice of earnings growth slowing down.
"This year is starting on a sour note for earnings, yet stock prices have rebounded nicely so far," said Ed Yardeni, the president of Yardeni Research, in a note to clients this week.
"While the Q4-2018 growth rate was still in the double digits, the typical upward earnings hook was anemic. Furthermore, corporate managements' guidance about the 2019 outlook during their latest conference calls was generally cautious."
Indeed, investment strategists say it's hard to ignore lowered earnings estimates.
Last year, earnings grew 27.5% year-over-year in the third-quarter and 14.2% year-over-year in the fourth-quarter, according to data compiled by Refinitiv. The first-quarter's earnings growth rate is slightly negative, at -1.5%, and second-quarter expectations call for growth of just 1.1%.
"Investors might be pleased with the market's recent performance, but it's unlikely they find the underlying dynamics - a more favorable risk backdrop, with decelerating economic and earnings growth - particularly inspiring," Jonathan Golub, the chief US equity strategist at Credit Suisse, told clients earlier this week.
Here's a snapshot of some US-listed companies who have said growth this year may slow from current levels.