A heyday for consumer corporates, earnings beat estimates

Consumer goods sold more in the US in the first quarter of 2023, lifting sales of companies like McDonald’s Corp., PepsiCo Inc., and Kimberly-Clark Corp.

All consumer-facing corporations’ earnings showed an increase in revenue, including more foot traffic in stores like Chipotle despite a price hike. 

More for burgers
More diners visited the McDonald’s burger chain, boosting sales by more than 12% compared to the same period a year ago. PepsiCo’s revenue grew 10.2% from the same period in 2022 to reach $17.84 billion, despite a price hike of about 13%.

Diapers sell more
Kimberly-Clark, the maker of Huggies diapers and Kleenex tissues, delivered strong growth, with net sales of $5.2 billion, up 2% with organic sales growth of 5%. On a combined two-year basis, organic growth increased by 8%. It had raised the prices by 10% for the second straight quarter.

The group had cut up to 5,500 jobs, about 13% of its workforce, and got rid of 10 manufacturing plants.

Procter & Gamble Co. sales jumped 4% versus the previous year, to $20.1 billion even after its second straight quarter of a 10% price hike; shoppers were willing to pay more for Pampers diapers and Tide detergent.

More coffee
Sales at Nestle SA increased by 5.6% from $24.89 billion in Q1 2022 to 26.48 billion in Q1 2023, even after the owner of Nescafe and KitKat raised prices by nearly 10%.

But analysts caution about consumers’ endurance as the threat of a recession looms. On Monday, Coca-Cola Co., which reported higher sales by both revenue and volumes, said it is seeing consumers’ changing their buying habits due to inflation.