Businesses are nervous about the US presidential election.
Based on executive commentary during their firm’s quarterly conference calls, a lot of CEOs and CFOs have a sharp eye on the contest between Republican Donald Trump and Democrat Hillary Clinton.
As we’ve noted before, companies typically find a seemingly non-economic event — Brexit, the weather, and so on — to help pin down just why they did not meet expectations or why they could have done better.
While this may or may not be a legitimate explanation for lackluster numbers, it is certainly a popular one. Consumer sentiment has remained resilient, though a number of business have noted some slowing in various industry surveys over the last few weeks.
We went through the earnings calls of firms reporting their financial results and found that many of them pegged consumer uncertainty or business uncertainty for their results.
We’ve got a partial list of some of the companies — from steel makers to investment banks to mattress makers — that have cited this excuse in just the last week.
We’ve included a description of the company and the commentary from their earnings call below. Check them out:
Company Description: Restaurant and food brands that owns Dunkin’ Donuts stores.
Executive Commentary: “What is driving franchisees towards the lower end is several factors, and I’ve described it, put it together as uncertainty, as uncertainty over the general election, Senate, obviously, the House, and local elections.
And it was interesting earlier this year — and I have a feeling I’ve said this on an earlier earnings call — I was with some franchisees in one state that I won’t name. And I’ve said to them, look, you’re going to open one store this year, why don’t you open two? And their response was uncertainty, regulation, we don’t know where the minimum wage is going. There was just so much uncertainty,” said CEO Nigel Travis
LaSalle Hotel Properties
Company Description: A hotel operator with 46 properties across the US.
Executive Commentary: “We are looking to November and December on paper, I would think they would be better than October. We are worried about the election impact that it has not just in DC, but potentially elsewhere. When we look at our pace for the quarter, it has mixed messages,” said CEO Mark Barnello.
Company Description: PulteGroup is the third largest homebuilder in the US
Executive Commentary: “My experience from spending a number of years in the field in our operations is anytime we’re this close to the end of an election cycle. I think the general public is trying to calculate and figure out what the impact will be of a change in power moving from one side of the political power grid to the other. What that will do to their earning power potential? What that will do to job growth? What that will do to the stock market, et cetera?
My general sense is that folks maybe pause and wait and see. We actually — as you saw from our sign-up growth in our absorption paces, we’re quite happy — very happy, in fact, with what we saw in the third quarter. So, I don’t know that we saw any kind of noticeable impacts. I think I probably speak for the collective country and say I think it will be nice once this election cycle is over in a few short weeks,” said CEO Ryan Marshall.