From Chips to Trips, Earnings Season Shows Consumer Demand Is Bumpy at Best

For several consumer-facing companies, the best thing that can be said is that households are cautious, or rather outright fearful, with tariffs as the catalyst.

Many of these firms have been cautious as well, at least in the Wall Street give-and-take of offering guidance. They’re either cutting their forward-looking numbers for revenues and earnings, looking for slowing growth, or they’re suspending guidance.

Economic Uncertainty Leads to Uncertain Spending Patterns

As earnings season got fully underway earlier in the month, Delta Air Lines was among the first out of the gate to sound notes of caution, where CEO Ed Bastian said: “Coming into 2025, we were positioned for another year of strong growth. However, given broad economic uncertainty around global trade, growth has largely stalled.” There’s no full-year outlook at the moment, because of that uncertainty.

Chipotle’s report last week took note of its first same-store sales slide since the pandemic. Looking ahead — and in a downshift from previous guidance — it expects low single-digit same-store sales growth through the year, off from the mid-single-digit range that it expected previously.

Broad-Based Impact

During the conference call with analysts, Chipotle CEO Scott Boatwright said: “In February, we began to see that the elevated level of uncertainty felt by consumers starting to impact their spending habits. We could see this in our visitation study where saving money because of concerns around the economy was the overwhelming reason consumers were reducing the frequency of restaurant visits. This drove a slowdown in our underlying transaction trends.”

The caution is widespread, according to Boatwright’s observations. Later in the call, he noted: “We took a hard look at the consumer by income cohort, which we’re not seeing any divergence in any specific cohort. And we took a look at it by geography, and we see that the slowdown is more macro versus generalized or by geography or by cohort.”

Even consumer staples giant Procter and Gamble sees flat sales this year after a fiscal third-quarter drop in volume and net sales. The revision is markedly lower than the 4% growth in the top line it had expected previously.

On Monday (April 28), Domino’s Pizza saw same-store sales for the first quarter slip by 0.5%; U.S. sales slipped 1%, and global sales slowed to about 4.7%, down from more than 7% a year ago. Management noted on the call that macro pressures are being felt by lower income consumers.

Stocking the larder with discretionary snacks and drinks — chips and Gatorade and the like — is less appealing, at least to the pocketbook, than had been seen even recently. Last week, PepsiCo cut its full-year outlook on the heels of consumer pullbacks, and earnings will be flat rather than in the single-digit percentage points (FritoLay sales, in just one example, were down about 4% year on year in the first quarter).

“Relative to where we were three months ago, we probably aren’t feeling as good about the consumer now,” CFO Jamie Caulfield said on the earnings call.

Added CEO Ramon Laguarta in his own comments: “Revenue management really is becoming more complex as consumers are feeling more challenged with their disposable income. And that, obviously, is different for different levels of income across the American consumer. … Now, what we’re seeing is that consumers are giving a lot of value to absolute dollars now. So clearly, entry price points and absolute outlay of money per unit is a very important relevant metric. And so, we’re putting more emphasis on those entry price points and making sure that we’re not asking for a large amount of money for participating in our brands.”

We’ll know more when Amazon weighs in with earnings on Tuesday (April 29) and Walmart posts its own results later next month.

But the last few weeks have offered mounting evidence that consumers are in “wait and see” mode when it comes to the household budget. They’re waiting before making any real impulse buys or booking trips, and weighing whether they really want to bring home another bag of chips.