TRG | The Bottom Line – 5/27

Q1’22 earnings season has largely wrapped up, and bottom line, the news really wasn’t that bad…in fact, it was better than expected. A few more salient themes from Q1 include: 1) Strong Q1 results that met or beat expectations – 78% of TRG coverage companies met or beat earnings expectations. 2) Maintained or raised FY’22 guidance – Of TRG coverage companies that provide guidance, 42% raised guidance and the rest maintained after Q1’22. 3) Stock repurchases on the rise YTD – Management is more uncertain about 2H’22 but notably does not have a negative view on that timeframe. Of our coverage, 74% have bought back some portion of shares YTD, representing anywhere from 0.2%-3.3% of shares. And 4) Demographics matter – The two biggest demographics impacting spending in the U.S. are Baby Boomers and Millennials. Boomers are entering peak spending years (buying services & experiences), while Millennials are settling down, starting families and are also spending (buying goods to support family household formation and growth). Either way you cut it, it’s a perfect spending storm from a U.S. demographic standpoint.