US consumers are holding up better than expected despite elevated inflation and high borrowing costs, according to earnings reports released this week from major companies across multiple industries. The word 'resilient' has become a common refrain among executives describing consumer behaviour in the third quarter, even as diesel fuel prices reached an all-time high of $6.52 per gallon in September and economists worried about pullback in spending.
Retail sales rose 0.8% in September following a jump of 1.3% in August, with gas station spending contributing to the September gains. Coca-Cola beat analyst expectations for third-quarter earnings and revenue despite what Chief Executive Henrique Braun described as an 'uneven environment'. The company's North America unit case volume held flat, indicating steady demand despite higher prices. The company raised its full-year forecast, now expecting comparable earnings per share to grow at least 11%, up from a prior forecast of 9% to 10%. Coca-Cola's Chief Financial Officer John Murphy told CNBC that 'the underlying momentum remains quite strong' and that consumers across income levels are seeking value.
Royal Caribbean reported increased third-quarter bookings, with the number of guests served rising 9% year over year to 2.7 million vacationers. Booking volumes for 2027 were already 'up in the high teens', pacing ahead of historical levels. Chairman and CEO Jason Liberty said on the company's earnings call that the results 'really talks to the resilience of the business, the resilience of the consumer'. UPS beat Wall Street expectations for both earnings per share and revenue in the third quarter, with US revenue rising 4.5% to $14.86 billion. CEO Carol Tomé told investors that consumers remain 'resilient' ahead of the holiday season and raised the company's full-year revenue forecast to approximately $92.6 billion, up from prior expectations of $91.2 billion.
Sherwin-Williams beat revenue expectations though it fell short on earnings per share, with net sales increasing 7.9% year over year. CEO Heidi Petz said the paint retailer's performance demonstrated 'the resilience of our Company and the strength of our strategy in a challenging demand environment'. However, the benefits were partially offset by increased raw material and supply-chain costs. Sherwin-Williams maintained its full-year guidance, cautioning that 'customer sentiment and the leading indicators we track point to muted demand over the remainder of the year and into 2027'. Not all companies have shared this optimism. Appliance maker Whirlpool missed expectations on both top and bottom lines and cut its full-year revenue guidance, with North America net sales falling more than 8% year over year during the period ending 30 September.
For American consumers and borrowers, resilient spending despite high inflation and borrowing costs suggests immediate financial stress remains manageable, though some industries show signs of weakening demand.