A Tactical Approach to Preparing for Investor Earnings Calls

In the turbulent world of investor relations, preparation is key. One significant battleground for investors is the earnings call, where accurate and timely information can make all the difference. Here we’ll explore how alternative data can address the challenges faced by Investor Relations (IR) leads, empowering them to anticipate questions, prepare strategically, and influence stock performance positively.

The Investor Relations Challenge

IR leads often find themselves bombarded with questions from investors and sell-side analysts, especially during the crucial periods surrounding earnings calls. Investors demand intensive competitive information to make informed decisions, seeking insights into various business dimensions like regional sales growth versus competitors, industry pricing strategies, and market responses. To thrive in this environment, you must be armed with the caliber of data your stakeholders will expect.

Anticipate and Prepare with Alternative Data

Leveraging alternative data like Consumer Edge allows IR to anticipate questions and prepare comprehensive responses.

  • How has market share changed since new competitor X came onto the scene?
  • Can you speak to the company’s pricing strategy, considering your competitors’ pricing model and time in market?
  • Are you going to be copying your competitor’s new product?

Access to transaction-level market intelligence allows them to address specific concerns about market share, cross-shop, and customer demographics. The ability to view and download relevant data points or capture screenshots of dashboards facilitates seamless internal and external communication, enabling Investor Relations leads to present a compelling narrative during investor meetings.

Investor Relations Case Study: YUM! Brands

On a recent earnings call, Dennis Geiger who covers YUM! Brands  at UBS asked “is it fair for Taco Bell given the fact that you’re seeing pretty good strength across consumers for the brand plus the initiatives that you could see sort of a widening market share or traffic share outperformance gap at Taco Bell this year given the environment and given the plans you have in place, if anything, to share on that?

Although the CEO was able to deflect the question, with CE Vision at his fingertips, he could have been prepared to quantify that Taco Bell had gained 120 basis points of share since the prior quarter.  With nine demographic variables and granular geography to cut the data by, he could have even pointed to specific customer segments driving the gain.  This would likely have instilled confidence in the company and could have raised the stock price.

Driving Stock Performance

The power of alternative data becomes evident when examining other real-world examples as well. Companies like Domino’s Pizza (DPZ), Starbucks (SG), Shake Shack (SHAK), and McDonald’s (MCD) have experienced significant stock performance shifts based on their reported figures. By utilizing alternative data, IR professionals can proactively navigate market expectations by seeing exactly what their investors are seeing, mitigating potential downturns with the right messaging and capitalizing on positive trends.

Access to Consumer Edge Alternative Data Can Create Shifts in Market Performance:

  • DPZ and SG: DPZ reported Domestic Retail Sales +2.7%, close to CE U.S. Transact implied reported U.S. Systemwide sales figure of +1.4% and below consensus estimates of +5%. As a result of its revenue miss, the stock opened down 11% on Thursday.
  • SG: SG reported Total Sales up +23% in Q4, close to CE U.S. Transact implied reported figure of +24.4% and meaningfully below consensus estimates of +29.4%. As a result of its revenue and EPS misses, the stock opened down -8% on Friday.
  • SHAK: Shake Shack reported US company-owned restaurant sales increased +22.9% y/y, close to CE implied reported sales growth of +18.5% and below consensus of +27.2%. As a result of its sales miss, the stock fell -6% on Thursday.”
  • MCD: McDonald’s reported US systemwide sales increased +3.9% y/y, close to CE implied reported sales growth of +3.7% and above consensus of +3.0%. As a result of its sales and EPS beat, the stock rose +3% on Wednesday.

The benefits of alternative data extend beyond investor relations. Other internal departments, such as marketing, can leverage this data for strategic decisions, such as identifying cross-industry partnerships. In companies with a diverse brand portfolio, alternative data becomes a valuable tool for monitoring each brand’s performance, benchmarking against competitors, and making informed strategic decisions.

Conclusion

In the high-intensity world of Investor Relations, alternative data stands out as a game-changer. By addressing the challenges that arise with investor relations, alternative data not only helps in preparing for earnings calls but also empowers organizations to make strategic decisions across various departments. Stay ahead of the competition, influence stock performance, and unlock investment insights with the transformative power of alternative data.

See how Consumer Edge data can better prepare you for earnings call—click here to request a free trial of CE Vision.


Consumer Edge is a leader in data-driven insights focused on the global consumer, with decades of experience providing leading hedge funds, private equity and venture capital firms, and corporates with alternative data. With data spanning credit and debit card transaction data, scanner data, and email receipt data, we boast deep coverage on hundreds of industries, subindustries, tickers, and symbols year-round. Reach out about CE Transact, CE Vision, or our other products to see how you can benefit from CE’s unrivaled consumer intelligence.