Saudi Press

Saudi Arabia and the world
Friday, Aug 08, 2025

CEOs say they are raising prices, cutting costs as inflation dominates post-earnings conversations

CEOs say they are raising prices, cutting costs as inflation dominates post-earnings conversations

Most company leaders say they've managed to navigate difficult times spurred by inflationary pressures at their highest level in more than 40 years.

Goldman Sachs CEO David Solomon set the tone early this earnings season when he said inflation is “deeply entrenched” in the U.S. economy and impacting conditions on a multitude of fronts.

Since then, company leader after company leader has expressed similar sentiments.

Most say they’ve managed to navigate difficult times spurred by inflationary pressures at their highest level in more than 40 years. They report cutting costs, raising prices and generally trying to adapt models to the uncertainty of what’s ahead.

Tesla founder Elon Musk was practically apologetic on his company’s earnings call for hiking prices to meet higher costs.

“So I do feel like we’ve raised our prices. Well, we’ve raised our prices quite a few times. They’re frankly at embarrassing levels,” the mercurial electric vehicle pioneer told analysts. “But we’ve also had a lot of supply chain and production shocks, and we’ve got crazy inflation. So I am hopeful, this is not a promise or anything, but I’m hopeful that at some point we can reduce the prices a little bit.”

Nothing, however, seems certain at the moment, other than that inflation is on everyone’s mind.

Of the 91 S&P 500 companies that have reported so far, inflation has been mentioned on 85 of the analysts calls, according to a search of FactSet transcripts.


Consumers paying the prices


Like Musk, company officials generally expect inflation to come down from the 8.6% quarterly growth rate from a year ago, as measured by the consumer price index. The CPI accelerated 9.1% in July, the highest number since November 1981.

But they’re also not taking any chances, using pricing power now to bolster their top and bottom lines amid a highly uncertain environment.

“Our primary response to the environmental challenge of inflation is higher pricing,” said Michael F. Klein, the president of personal insurance for Dow component Travelers. “We are pleased with our actions to increase rates over the past few quarters and remain confident in our ability to achieve further increases.”

The higher prices certainly haven’t hurt profitability, with results so far countering the generally pessimistic attitude on Wall Street heading into earnings season.

With nearly 20% of the S&P 500 companies reporting so far, 78% have beaten estimates for profits, which are up 6.3% from a year ago, according to Refinitiv. The beat rate on the revenue side is 72.5%, with sales up 11.3%.

Though energy companies have been a major boost to the aggregate top and bottom lines, the overall feeling is that cash-rich consumers are able to handle the burden of soaring prices, at least for now.

“We have been able to and continue to be able to pass through our product cost inflation to our customers, and they are increasingly finding ways to pass that through to their consumers as well,” said Sysco Chief Financial Officer Aaron Alt. “We’re confident that will continue to be the case certainly in here and now.”


Defying recession fears


Economists have worried that a looming recession could chill consumer spending that has been persistent but short of the pace of inflation.

Citigroup CEO Jane Fraser said the company has been focused on what she calls the “three Rs”: Russia, rates and recession.

Russia’s invasion of Ukraine has been a contributor towards the supply chain difficulties that have aggravated inflation, which the Federal Reserve is seeking to tamp down through aggressive interest rate increases. The rate hikes are aimed at slowing an economy that contracted by 1.6% in the first quarter and is on track to have shrunk by the same amount in the Q2, according to Atlanta Fed projections.

Still, Fraser said she thinks the U.S. will avoid an official recession or at least a deep one, even though two consecutive quarters of negative growth fits the rule-of-thumb definition. The National Bureau of Economic Recession is the official arbiter on recessions and expansions.

“It’s just an unusual situation to be entering into this choppy environment when you have a consumer with strong health and such a tight labor market,” Fraser said on Citi’s earnings call. “And I think that’s where you hear so many of us not so much concerned about an imminent recession in the [United] States.”

But Solomon, the Goldman CEO, said the company is playing it safe even though its economists expect inflation to pull back in the second half of the year.

“I think our tone is cautious because the environment is uncertain. The environment is very uncertain,” he said. “There’s no question that economic conditions are tightening to try to control inflation, and as economic conditions tighten, it will have a bigger impact on corporate confidence and also consumer activity in the economy. I think it’s hard to gauge exactly how that will play out, and so I think it’s prudent for us to be cautious.”

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
OpenAI’s Bold Bet: Teaching AI to Think, Not Just Chat
BP’s Largest Oil and Gas Find in 25 Years Uncovered Offshore Brazil
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Russia Formally Recognizes Taliban Government in Afghanistan
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Emirates Airline Expands Market Share with New $20 Million Campaign
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
×