Forecasting is especially tough for companies that rely on discretionary spending
These companies are trying to predict when the resilient American consumer will break under rising prices and stop splurging on things like travel and takeout.

Corporate results are continuing to roll in for the first quarter. This week we’ll hear from Chipotle, Pepsi and Southwest Airlines to name a few consumer-facing companies that may have an especially tough time offering us guidance on where they’re headed.
Companies offer guidance that they believe they can meet or, better yet, beat in their next quarterly results, according to Randy Burt, an analyst with Alixpartners.
“Generally though, when you miss expectations, your stock price goes down — and usually very quickly,” he said.
So there’s a lot riding on the narratives companies share about where they’re headed.
But right now, “we are at a time where there is a great lack of visibility,” said Caleb Silver, editor-in-chief at Investopedia.
That’s the case for all companies trying to forecast their outlook, but especially those that compete for our discretionary dollars.
They’re trying to predict when the resilient American consumer will break under rising prices and stop splurging on travel and takeout, Silver said.
“That’s why you’re hearing so many companies in the discretionary sector say ‘We just can’t provide a forecast’ or ‘We have two different paths that this could go,’” he said — one set of guidance for if American consumers just keep spending and another for if we start to tighten our belts.