Economic concerns remain in the background, but the tone from corporate leaders is shifting. This summer’s faint optimism has collided with the reality of July’s disappointing jobs report, escalating trade tensions, and early signs of the impact on business activity. Sentiment on both the economy and the consumer remains mixed.
At Gartner Inc., executives noted that even small corporate spending decisions are now being escalated to the C-suite for approval — a pattern their CEO says has appeared in “every recession.” Yet, despite this behavior, direct mentions of a recession on quarterly earnings calls have dropped sharply in recent months.
According to FactSet data released Friday, “recession” appeared in just 16 S&P 500 company earnings calls from June 15 through August 7 — an 87% decline from the first quarter. This shift occurred during a period when the most punitive U.S. tariffs were paused or pending implementation, markets were largely ignoring the administration’s harshest trade threats, and investors were waiting for more concrete data on the economic fallout. Many were betting the rhetoric was a negotiating tactic, or that incremental trade agreements with select countries would temper uncertainty.
That patience may be tested now. New U.S. tariffs went into effect last Thursday, and the coming months could reveal more tangible disruptions. For now, the upcoming earnings calendar is notably lighter than the past two weeks, giving investors and advisors room to digest recent results and watch for emerging consumer trends. Key updates from major retailers like Walmart and Target later this month should provide a clearer read on shopper behavior heading into the critical back-to-school and holiday periods.
BMO Capital Markets analysts summed up the current retail climate in a Friday note: “The common theme across our food retail coverage includes a consumer seeking value.” That value orientation will continue to be a central point of analysis for RIAs and wealth managers assessing consumer resilience in a high-rate, high-cost environment.
Earnings Watch: This Week’s Highlights
Eight S&P 500 companies will release second-quarter results this week, per FactSet.
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Deere & Co. remains a bellwether for industrial and agricultural sectors. As of May, the company projected roughly a $500 million tariff-related impact for its fiscal year. Investors will be looking for signs of how effectively Deere is managing these headwinds through operational adjustments and pricing strategies.
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Tapestry Inc., the parent of Coach and other brands, offers insight into the trade war’s effect on consumer goods. With heavy reliance on Vietnam, Cambodia, and the Philippines for production, shifts in supply chain costs and manufacturing flexibility will be closely watched.
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Brinker International Inc., owner of Chili’s, faces the same margin pressures affecting the broader restaurant industry. The battle between casual dining and fast food to offer competitive prices will remain a key discussion point, particularly as food inflation persists.
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AMC Entertainment Holdings Inc. will be under the microscope as the movie theater industry navigates shifting consumer entertainment habits, competition from streaming, and inconsistent box-office performance.
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Advance Auto Parts Inc. provides a window into consumer spending on vehicle maintenance, an area often considered resilient in economic slowdowns but still sensitive to pricing and wage trends.
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CAVA Group Inc., the Mediterranean fast-casual chain, continues to expand aggressively. Its ability to sustain growth and manage food and labor costs will be of interest to those tracking emerging brands in the restaurant sector.
Earnings Call to Watch
WW International Inc. — better known as WeightWatchers — reports Monday after emerging from bankruptcy just last month. The company has shifted its strategy to focus more directly on helping women navigate menopause, a move that coincides with the rise of GLP-1 weight-loss medications like Wegovy. WeightWatchers has pledged to integrate “the best tools of modern medicine, like GLP-1s, with science-backed lifestyle change.” Advisors will want to track how the company’s pivot is received by the market, as questions remain about the sustainability of its membership base and revenue model in this new competitive landscape.
Key Metric: Cisco Systems Sales
Cisco Systems Inc., a leader in networking technology, reports Wednesday. Attention will be on its positioning within artificial intelligence infrastructure, following momentum earlier this year, as well as developments in quantum computing. For RIAs and institutional advisors, Cisco’s results will be an important gauge of enterprise technology spending trends and the pace of adoption for next-generation infrastructure solutions.
Advisory Takeaways
For wealth advisors, this week offers a pause in the torrent of earnings, allowing for deeper analysis of recent macro and micro shifts:
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Sentiment Disconnect: While executives’ public discussion of recession risk is down, certain behaviors — like elevated approval processes for spending — suggest caution is alive in corporate decision-making. Advisors should be alert to the difference between what companies say and how they act.
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Consumer Value Orientation: Across retail, dining, and entertainment, value remains a primary driver. The companies that can balance competitive pricing with margin protection will likely emerge stronger if growth slows further.
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Tariff Impacts: New duties now in effect may show up quickly in cost structures for manufacturers and consumer brands reliant on overseas production. Companies with diversified supply chains and strong pricing power will be better positioned.
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Tech Spending Resilience: Cisco’s performance will be a critical data point in evaluating whether enterprise IT budgets remain intact in the face of economic uncertainty — especially in areas tied to AI and advanced computing.
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Strategic Pivots: From WeightWatchers’ post-bankruptcy repositioning to Tapestry’s supply chain adjustments, adaptability will be a differentiator. Advisors should monitor how well these changes align with broader market trends and consumer behavior shifts.
While the market remains focused on macroeconomic signals — from jobs reports to trade developments — individual company results this week will offer granular insights that can inform portfolio positioning. For RIAs, the quieter earnings calendar is an opportunity to recalibrate client strategies, assess sector exposures, and prepare for what could be a more volatile second half of the year.
