Q3 earnings show resilient US consumers, signs of strain

One word kept appearing in the third-quarter earnings report: “endure.”

Here’s an early read on US consumers from various companies releasing results this week. Many businesses say Americans are still spending despite inflationary pressures, although not every company has had the same success.

The comments come amid concerns that diesel fuel prices, which peaked at $6.52 a gallon in September, will increase the price of consumer products. Economists also worry that more expensive natural gas, combined with high debt costs and ongoing tensions between the US and Iran, will pull back consumer spending.

Retail sales rose 0.8% in September, after rising 1.3% in August. Sales in September were boosted by an increase in gas station spending. Despite all these challenges, some company executives say the high winds have not affected sales.

“There’s a lot of disruption in the market this year. There’s a lot of geopolitics,” Royal Caribbean Chairman and CEO Jason Liberty spoke on the company’s earnings call on Friday. “But I look at our business [and our results]and I’m really talking about business resilience, consumer resilience.”

Royal Caribbean reported an increase in orders during its third quarter, while Sherwin-Williams The CEO said the quarter is proof of the company’s strength.

Here’s how the company read consumers in the most recent three months:

The food and beverage company beat analysts’ expectations for third-quarter earnings and revenue despite what CEO Henrique Braun called an “uneven environment.”

Coca-cola reported that North American unit case volume was flat, indicating steady demand at higher prices. The company’s overall unit case volume was helped by higher demand outside North America.

“The fundamental momentum remains quite strong,” Chief Financial Officer John Murphy told CNBC. “Consumer sentiment generally hasn’t changed in the sense that wherever you are on the income scale, you’re looking for value, and I think our system has done a good job of translating that.”

The company increased its full-year forecast and now expects comparable earnings per share to grow at least 11%, up from its previous forecast of growth of between 9% and 10%.

The shipping company beat Wall Street expectations for earnings per share and missed revenue.

“Our third quarter results reflect continued consumer demand for vacation experiences and accelerated momentum across our industry brands,” Liberty’s CEO said in the release.

The company reported that the number of guests it served in the third quarter increased by 9% year-on-year to 2.7 million tourists and said the volume of bookings for 2027 has “increased in the teenage years,” faster than historical levels and shows high travel demand.

“You don’t see the challenge points, but really what we’re seeing is that even in those challenge points, consumers will come back to the holiday experience,” Liberty told CNBC’s “Squawk on the Street” after the report.

Royal Caribbean shares closed up more than 5% on Friday.

Sherwin-Williams beat analysts’ expectations for revenue but fell short of earnings per share.

Sherwin-Williams CEO Heidi Petz said in the company’s earnings release that the paint retailer’s performance shows “the resilience of our Company and the strength of our strategy in a challenging demand environment.”

“Despite muted underlying market volumes, we continue to win new customers, increase share-of-wallet and generate sales across all three reportable segments,” he said.

Net sales increased 7.9% from the same period last year. The company generated higher selling prices, but the gains to profits were partially offset by increases in raw material costs and costs associated with the supply chain.

And the company maintained its full-year guidance, saying “customer sentiment and key indicators we track point to muted demand for the remainder of the year and into 2027.”

UPS beat Wall Street expectations for earnings per share and revenue in the third quarter.

Revenue in the US rose 4.5% during the period to $14.86 billion.

CEO Carol Tomé told investors on the company’s earnings call that consumers remain “resilient” ahead of the holiday season, the company’s busiest period. He said the company expects average daily shipment volume to grow next quarter at a rate consistent with last year. However, fourth-quarter domestic average volume will decline due to reduced deliveries with Amazon, he said.

UPS is in the midst of unwinding its partnership with Amazon at the same time it is conducting a major turnaround effort to operate more leanly.

The company raised its full-year forecast for the second quarter in a row, estimating consolidated revenue of about $92.6 billion, up from a previous expectation of $91.2 billion.

Shares closed up more than 5% on Tuesday.

However, not every company sees the same spending trends.

Tool maker A whirlpool missed on the top and bottom lines for the third quarter and cut full-year revenue guidance.

Net sales in North America fell more than 8% year over year for the period ended September 30.

In fact, the company mentions its own reading of “resilience.”

“Through disciplined working capital management, we protect year-end free cash flow and
the resilience of our balance sheet to navigate challenging market conditions,” CFO Roxanne Warner said in an earnings release.

Shares closed up more than 3% on Tuesday.

— CNBC’s Amelia Lucas and Laya Neelakandan contributed to this report.