The latest stats for 3Q25 reporting season
Reporting season remains strong from the perspective of beat rates. Through Wednesday, 81% of S&P 500 companies were beating consensus on EPS while 76% were beating on sales. Both stats are down slightly since our prior update. EPS beats remain slightly above final levels in place for 2Q25, but sales beats are now tracking slightly below 2Q25 levels.
The rate of upward EPS estimate revisions for the broader market indices improved last week, but remains well below their August peak. This is a gauge of earnings sentiment and is more of a forward-looking indicator than beat rates. This stat is now tracking at 55.8% (up from 51.9% last week) for the S&P 500. In August, this stat was in the mid-60s.
Macro color from last week’s earnings calls
Overall, we’d characterize what we read about the overall macro in last week’s earnings calls as mixed and varying in tone by sector. On the more positive side, we read about strong/strengthening/healthy demand from a number of companies, with much of the positive commentary coming from Technology, some parts of Communication Services, and Health Care. Less constructive comments tended to come from Consumer.
With more Consumer companies reporting and fewer Financials in the queue last week, the tone around the consumer was a notch below what we read in the first few weeks of 3Q25 reporting season, when the conversation about the consumer was driven mostly by Banks. The Consumer-related companies that reported last week continued to describe a price-sensitive and value-conscious consumer with a preference for experiences. Several highlighted how the consumer was “under pressure” with one company noting “we don't really see, candidly, a catalyst for that to change any time in the near term.”
More specifically, companies described worsening consumer sentiment, ongoing affordability challenges with housing, anticipated SNAP headwinds, shorter length of stays in travel, inventory pullback from corporate customers, the compounding impacts of inflation, weakness among Hispanic customers, student loan repayments, uncertainty regarding tariffs and AI, more couponing and an increased promotional environment, softness in September, softness around Halloween, lower demand for vehicle repairs, middle-income consumers being on the sidelines with Botox, and pressures on dining out among low- to middle-income customers and those in the 25-to-35 age cohort. One consumer-related quote that we’ll have a hard time forgetting highlighted how they were expanding inventory in salvage. Another quote that stuck out was a payments company highlighting macro-related deceleration in September and a trade-down in basket sizes.
