Goldman Sachs Q1 performance briefing with essential consumer goods companies, saying that exchange rate trends may alleviate revenue pressure.

Recently, before several essential consumer goods companies announced their first quarter earnings, the Goldman Sachs Group, Inc. engaged in discussions with these companies' investor relations teams and released research reports outlining the key points of the meetings. These points will ultimately become the focus of each company's earnings conference calls. These companies include Coca-Cola European Partners Company (CCEP.US), Celsius Holdings (CELH.US), Church & Dwight Company (CHD.US), Colgate-Palmolive Company (CL.US), Clorox Company (CLX.US), VitaCoco (COCO.US), Coty Inc. Class A (COTY.US), Estee Lauder Companies Inc. Class A (EL.US), e.l.f. Beauty (ELF.US), Keurig Dr Pepper (KDP.US), Kimberly-Clark Corporation (KMB.US), Coca-Cola Company (KO.US), Kenvue (KVUE.US), Murphy USA, Inc. (MUSA.US), PepsiCo, Inc. (PEP.US), Procter & Gamble Company (PG.US), and Molson Coors Beverage Company (TAP.US). Recent data and comments from consumer packaged goods (CPG) management at an investor conference indicate that U.S. consumers are showing increasingly cautious behavior due to concerns over perceived inflation, tariff uncertainty, and political unrest like that of GEO Group Inc. This has led to a moderation in consumer trends this quarter, and retailers may engage in destocking due to the pressure on consumer trends, showing more caution in their inventory levels, which also brings related risks. However, the recent favorable foreign exchange rate trend so far this quarter should help alleviate revenue pressures, although each company's earnings may vary. Overall, the bank has seen some short-term challenges and adjusted its estimates accordingly to reflect these dynamic changes before the first quarter earnings season. Recent foreign exchange rate trends suggest headwinds may weaken In 2024, foreign exchange rates are a significant headwind for the entire consumer packaged goods industry, with most currencies depreciating against the U.S. dollar. Additionally, initial guidance for 2025 from various companies shows that foreign exchange rates may continue to be a headwind in that year due to the ongoing strength of the U.S. dollar. Concerns about economic slowdown, political tensions like that of GEO Group Inc, and policy changes including tariffs and immigration policies have increased macro market volatility from 2025 onwards. While it is still too early to determine the final direction of this year, recent foreign exchange rate trends suggest that the U.S. dollar has depreciated against most currencies in 2025, indicating that the headwind from foreign exchange translations may be smaller than what companies expected when they announced their fourth quarter 2024 earnings and initial 2025 guidance at the end of January/early February.