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“Every day it is a march towards the next separation profit report.”
This comment came to me, the CEO of a public company has completed a few weeks ago on coffee. Certainly, she swings with what she has heard over the years of the threads of investor, financial managers and executives.
These guards told me from the numbers that they owe the market and their whims, and they spend crazy amounts of time in formulating profit novels and planning guidance ranges.
Everything looks very ridiculous, as the guidance is not necessary at all!
This leads me to today’s ideas.
Now it can be the time to use executives Trump is a tariff of uncertainty To stop providing guidance of any kind, once and for all.
After all, how can one believe any distinct numbers in this environment (and the three and a half years of environments from now) when it can change literally with one social function?
Levi (Fibrous) CEO Michel Jas has rolled the dice and bid farewell to the company’s suspended profit for the full company.
I found it strange, given Levi’s positions to get the tariffs because of their sources. A short time before the 90 -day tariff stopped by Trump, one of the former CEOs in the text by text told me that the price of a pair of jeans may rise by 50 % to 100 %. But a temporary stop did not include China, which is now 145 %.
But hey, at least formed the spas The internal “Labor Squad” To start knowing the effect of customs tariffs on work.
“I stopped guidance once in the six years and that was during Covid.” Andy Callen He told me.
He added: “Executive managers/immediate managers do a lot of work to understand predictions and make sensations for these inputs to determine a reliable set of results. When two things happen immediately, it happens now … Any large group of uncertainty or at least comment is worse than a very rational comment.
Executive presidents tell me that many companies are likely to remove guidance when the profit season begins next week. It seems to be the right step, even if the company’s share price is hit. This means that investors have to evaluate companies differently-thinking about textbooks more than trying to predict the profit number and the reaction of subsequent stocks.
I am curious, though: How many historical terms depend on sales and profit guidance from a company you own? And if you depend greatly on this guidance, are you doing that now, given that any distinct expectations are adjacent to the lack of vastness due to the uncertainty? I am keen to hear your thoughts – drop me a line on x briansozzi.
Full disclosure: I hated companies ’directives for years and I was fixed to say that the practice should be stopped.
It is time to say goodbye to the expectation of analysts and stock prices in seconds after hitting the result of the tape profits!
I think the investment of the company should be dictated by the company’s pure health, not through the investment bank He thinks The company must based on the inputs of the various spreadsheets.
The pure health of the company can be evaluated by checking serial sales, margins, profits, cash flow growth rates on an absolute and relative basis (being simplified here, but it can be done in this way at a minimum).
However, here are what some former executives in public companies told me about providing profit guidelines during times of great economic and political uncertainty, as is the case at the present time.
Former CEO of Cisco John Chambers
“The general guidelines that I follow in times of uncertainty are to make mistakes alongside transparency and openness even if it requires a broader direction, while evacuating the appropriate responsibility, given the conditions of the market.”
The head of the Boston Consulting Group is lower
“We believe that the temporary suspension of the points of the front guidance has what justifies it for the most influential industries with the widest results. This must come with:
Color on moving parts (for example, customs tariffs, pricing, flexibility, supply chain movements, productivity and savings to relieve pressure, ability to achieve income/sale assets) to help investors and scenarios the model of analysts.
Commitment to the participation of the largest possible as quickly as possible (perfectly for weeks, not months).
Commitment to return to the official term to the average when the situation is clarifying/settled a little. “
Bill George, former CEO of Metronic
“We discussed this question with the CEOs recently.
Given the uncertainty resulting from the constantly changing customs tariffs and its unknown effect on the economy and supply chains, I think it is wise to withhold guidance on revenues and profits near the period. This situation is similar to what the executive presidents with Covid witnessed in 2020. ”
