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<\/figure>\n\n\n\nEurozone inflation hit a painful rate of 0.8% month-over-month (m\/m), much hotter than expectations of a 0.6% increase, erasing progress from January’s 0.2% decline. On a year-over-year basis (y\/y), consumer prices rose 8.5%, slightly slower than last month’s 8.6% reading due to high base effects from lofty energy prices. Core prices led the advance last month as we eclipsed the one-year mark of Russia\u2019s invasion of Ukraine. The food, alcohol and tobacco category, services, and industrial goods were the largest gainers, up 1.6%, 0.9%, and 0.8% m\/m, respectively. Energy fell 1.1% during the period as slower demand, a cooler than expected winter, and ample supplies provided relief to consumers.<\/p>\n\n\n\n
Inflation’s impact continues to echo across the retail industry, with Best Buy and Macy’s kicking off the day with negative outlooks for consumer spending in the coming months.<\/p>\n\n\n\n
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- Best Buy’s sales during the company’s fiscal fourth quarter ended January 28 of $14.74 billion exceeded the Refinitiv analyst consensus expectation of $14.72 billion. However, revenues declined 3% from the company’s most recent fourth quarter before the COVID-19 pandemic, which caused consumers to splurge on home office equipment and other electronics while social distancing. In a sign of weakening consumer spending, Best Buy expects same-store sales to decline between 3% and 6% in its current fiscal year.<\/li>\n\n\n\n
- Macy’s provided an encouraging update for its fourth quarter, but the company estimates that net sales during its current fiscal year will decline between 1% and 3% relative to its most recent fiscal year. Macy’s fourth-quarter revenue of $8.26 billion met the Refinitiv consensus expectation, and its earnings of $1.71 per share trounced the expected $1.57 earnings number. Unlike many other retailers, Macy’s inventory has declined significantly, allowing the company to limit promotional pricing, which supported the company’s earnings. Looking forward, Macy’s CEO Jeff Gennette said this morning that discretionary consumer spending is under pressure, and consumers are continuing to shift spending from goods to services.<\/li>\n<\/ul>\n\n\n\n
The shift to focusing on entertainment drove mixed results for Six Flags, an amusement park operator. In the fourth quarter, revenues declined by 12% y\/y as park attendance decreased due to the company’s decision to increase ticket prices, eliminate free tickets and heavily discounted passes. The company also had fewer operating days compared to the same period in 2021. On an encouraging note, spending per capita increased $6.60 for admission and $5.55 for in-park purchases.<\/p>\n\n\n\n
While consumers are tightening their purse strings, the secular trend of businesses digitizing their operations and embracing cloud computing has supported revenues and sales for Salesforce, which said sales during its fourth quarter ended January 31 climbed 14% y\/y to $8.38 billion, driven in part by better results for MuleSoft, a program that integrates applications and data. The company also reported earnings of $1.68 per share, substantially exceeding the $1.37 a share expected by analysts and up from 84 cents a share in the fourth quarter of 2021.<\/p>\n\n\n\n
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