It's earnings season once again. This Sunday also happens to be the Easter holiday in the states. What do they have in common? Well, as we move into next week we will start to see tons of companies report their earnings each day. Now when a company reports strong earnings they tend to sit back and comment on only the good things that happened when they have their conference call. Since they met Wall Streets expectations they have no real reason to say anything bad. They enjoy the nice day and get back to work to try and beat the street again next quarter. When things go wrong, that is a completely different story.
We all know that the Christmas holiday is a huge shopping holiday and that retailers are in focus for their sales and store traffic. When a retailer misses their holiday earnings expectations they begin to look for blame. If they can blame something other than themselves then maybe investors wont panic. If there happened to be a sudden snow storm then that is the most common thing to blame.
Why are we talking about this? Well, one holiday you would think that companies couldn't blame would be Easter. As we head into next week watch how many companies try and blame their earnings miss on Easter...EASTER!
And they will get away with it too. Why? Well the Easter holiday sometimes falls in March, and sometimes it falls in April. This year it happens to fall in April which is technically after the first quarter closes. This means that companies like Hershey (NYSE: HSY) will not get to include the bump in sales thanks to the holiday.
Now candy, and alcohol companies you would expect to blame the holiday but believe it or not 70% of consumer companies blame the holiday if they miss earnings. In fact, every sector of the market except telecommunication has blamed the bunny for an earnings miss.
Gardening companies blame the late holiday as reason that people didn't get out in the yard and do some gardening (this is no joke). Theme parks have used the excuse for low traffic at their parks. Even McCormik (NYSE: MKC) has gone as far as blaming an April Easter as a reason that Hispanics didn't go out and buy more spices!
It may sound like this is a joke, but keep your eye out for earnings conference calls and watch how funny it sounds.