FY24 Consumer Company Outlook

May 1, 2024 | Macro Insights, No Bull Economics

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As we are entering fully into 1Q24 earnings season we look at FY24 analyst forecasts for the 80 consumer retail companies under our coverage. While the median revenue growth forecast for the next 12 months (NTM) is just +3.7% (in line with inflation), expectations are for +9.3% EBITDA growth as management teams continue to drive operating efficiencies sufficient to improve margins. This portends well for future top-line growth as more profitable companies are better able to make investments to drive future revenue growth.  

Top Growing Companies

  • The hotels are expected to continue generating the fastest top-line growth in the consumer space as spending on travel remains a top priority.
  • Next up on the growth curve are the top restaurant & coffee chains that continue to offer cash-strapped consumers an affordable luxury.
  • The list also includes car part stores & Dollar General which reflects that lower-income consumers need to stretch their dollars as far as they will go.
  • These stocks have strongly outperformed the aggregate consumer list & also enjoy the highest valuations (enterprise value/EBITDA).

Forecasted Revenue Growth >6% For Next 12 Months Chart

Middle Growing Companies

  • It is notable that this list, which includes many mature blue chip consumer companies, has generated sub-par stock performance as investors have been rewarding growth over safety post-covid (with the exception of 2022’s bear market).   

Forecasted Revenue Growth Middle Growth Forecasts Chart

Bottom Growing Companies

  • This list includes housing related companies that are suffering from high mortgage rates, mid-range sit down restaurants that are oriented towards lower-income consumers and food companies that are also dependent on lower-income consumers.
  • Not surprisingly, this low growth stock list has performed the worst.

Forecasted Revenue Growth Low Growth Forecasts Chart

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