There’s a unique flavour to each earnings season and unlike recent quarters, this one isn’t about lockdowns or tax cuts but all about inflation, and how companies deal with it.
Europe’s consumer staples sector is on the frontline of concerns about how raw materials, shipping and labour costs might hit margins. Mentions of inflation rose more than 400% year-on-year during STOXX 600 firms’ Q2 earnings calls, BofA analysts note. Materials, financials and consumer firms were most prominent.
Many such as Unilever, Reckitt or Nestle have bemoaned feeling the pinch. Other inflation-sensitive heavyweights may follow suit in the coming week, as Nivea maker Beiersdorf, fashion retailer Zalando and automotive supplier Continental report.
A huge week for banks too, with HSBC, Societe Generale, Standard Chartered, Commerzbank, Intesa Sanpaolo and Credit Agricole all due to report.