Why robust demand could still lead to solid earnings
Julie Hyman breaks down why she believes the supply chain challenges the market will not affect earnings due to the robust nature of consumer demand.
Video transcript
JULIE HYMAN: OK, so I'm going to push back against this a little bit because, yes, there are these supply chain challenges, but there have been supply chain challenges. The idea to me is just that there are more persistent than estimated. Anyone who's ordered anything, an appliance, a piece of furniture over the past year knows that the supply chain challenges are not new to the market.
So the question is has the market priced in the sustainability or the durability of these supply chain challenges? Maybe, they haven't, Bryan. But the idea that a year from now, we're going to be talking about earnings challenges as a result of all of this, I find that hard to believe, or, at least, hard to believe with any kind of certainty that a lot of this is not going to work itself out.
And I will also come back to the other side of the equation, which is the demand side of the equation. And this is something that we have talked a lot about over the past six months with our late lamented Myles Udland Not really, in actuality, luckily. Which is that.
BRIAN SOZZI: I follow him. He's fine.
BRIAN CHEUNG: He's fine.
JULIE HYMAN: Well, he's lamented certainly that he's not so part of our discussion here. But the idea being that demand is extraordinarily robust and remains robust. And so again, it's hard for me to believe that earnings are going to, across the board, be that depressed if the demand side of the equation remains as robust as it has been. And we haven't been hearing from companies that that is the problem.
I don't-- I can't recall-- I don't know about any examples, but very few examples, where companies has said, demand is the problem, not supply.
BRIAN SOZZI: Well, that's great. But they can't get the products to people. I mean, Nike just told us, sure, listen, we have demand, things are great. We just can't sell people sneakers because we can't get our sneakers out of Vietnam. I mean, again, I just don't think that's a problem that correct itself overnight. One year from now, fine. Will Costco be selling-- still be limiting TP in its stores? Probably not, I get it. But at least, near term, it's a problem.
