Article Image

IPFS News Link • Inflation

"Buckle Up! Inflation Is Here!"

•, by Tyler Durden

... which warns that Inflation is "arguably the biggest topic during this earnings season, with a broad array of sectors (Consumer/Industrials/Materials) citing inflation pressures."

Exhibit A: the chart below showing the number of mentions of "inflation" during earnings calls which exploded, more than tripling YoY per company so far, the and the biggest jump in history since BofA started keeping records in 2004.

Why is this a problem? Because the number of mentions has historically led CPI by a quarter with 52% correlation and points to explosive higher inflation ahead.

Similar to what we did, BofA has also picked up key inflation commentaries from earnings calls, which noted that raw materials, transportation, labor, etc. were cited as sources of inflation and many plan to (or have already) raise prices to pass through higher costs.

FAST (Industrials): "we are experiencing significant material cost inflation, particularly for steel, fuel and transportation costs."

GIS (Staples): "Looking ahead, as we experienced higher inflationary environment, our first line of defense will continue to be our strong holistic margin management cost savings program. In addition, we are taking actions now and in the coming months […] to drive net price realization that will benefit our FY2022. "

CAG (Staples): "we're seeing input cost inflation accelerate in many of our categories and across the industry."

LW (Staples): "while the pandemic-related effects on our supply chain were the primary drivers of our cost increases, we also realized higher costs due to input cost inflation in the low single-digits. We expect that rate will begin to tick up in the coming quarters as edible oil and transportation costs continue to increase."

STZ (Staples): "similar to previous years, we're expecting substantial inflation headwinds in the low to mid-single-digit increase range, largely related to glass and other packaging materials, raw materials, transportation and labor costs in Mexico. "

Free Talk Live