Odd Lots

Lots More on What Earnings Are Telling Us About Prices Now

Feb 16, 2024

Samuel Rines, managing director at Corbu, offers sharp insights into corporate pricing strategies. He discusses how the 'price over volume' approach is fading, making way for a model focused on maintaining prices while boosting sales. The conversation also touches on the recent earnings season, highlighting Pepsi's performance and the ongoing trend of layoffs in the tech sector. Rines explores how companies adapt to economic pressures and the evolving relationship between pricing power and workforce dynamics.

28:43

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Episode guests

Samuel Rines

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Podcast summary created with Snipd AI

Quick takeaways

Consumer packaged goods companies are shifting their focus to rebuilding volumes rather than further raising prices.

Companies that successfully raised prices are now investing in advertising to drive volume increases and compete for market share.

Deep dives

Companies prioritize boosting profit margins through layoffs

While earnings reports highlight a significant number of layoffs, the overall jobs picture remains relatively stable. Layoffs receive attention and make headlines, but the situation is not as dire as it seems. The layoffs that are happening now are not as severe as those seen in 2020. Tech companies have used software models to expand profit margins, while consumer packaged goods (CPG) companies face challenges. Cutting workers in CPG may impact their ability to do business and compete. The focus for CPG companies is on rebuilding volumes rather than further raising prices. Companies like Kroger leverage AI models to mine consumer data and gain a competitive edge.

Balancing pricing power, margins, and workforce

01:24

Patterns and Examples of Companies Talking About AI and Leveraging Data

03:59

Reinvesting Gross Margin Dollars in Marketing for Volume Growth

01:30

Intro

2min

Earnings Trends and Workforce Dynamics

13min

Navigating Pricing Strategies in CPG

8min

AI Buzzwords and Market Realities

7min

Market Trends and Consumer Desires

3min

Last year, Corbu managing director Samuel Rines came on Odd Lots to discuss what exactly companies were saying about why they were raising prices. His argument was that in the post-pandemic environment, with all its associated peculiarities and one-off disruptions, businesses were pursuing a strategy of "price over volume" (POV) to boost their profit margins. Since then, the idea of corporate profits contributing to inflation has gone viral, with the Biden administration repeatedly admonishing companies for price-gouging. In this episode of Lots More, we discuss the latest earnings season and what it's telling us about prices right now. Rines argues that the POV strategy is petering out in favor of companies maintaining prices and preserving margins ("Price and Margin") and even beginning to boost their volumes. We also talk about recent job cuts and layoff announcements.

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Odd Lots

Lots More on What Earnings Are Telling Us About Prices Now

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Companies prioritize boosting profit margins through layoffs

Companies redirect gross margin dollars into advertising and marketing

AI implementation and data collection drive business strategies

Balancing pricing power, margins, and workforce

Patterns and Examples of Companies Talking About AI and Leveraging Data

Reinvesting Gross Margin Dollars in Marketing for Volume Growth

Remember Everything You Learn from Podcasts