Financial Reporting

Fair weather warning

Unfavorable weather takes a whack at earnings this quarter.
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· 3 min read

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There are a lot of macroeconomic factors taking a bite out of earnings right now: High interest rates, inflation, weakening consumer demand, and recessionary fears are stoking earnings slides for companies of all types.

But there’s another, less obvious factor impacting earnings recently: weather. Companies across the country are finding that weather events, especially the California floods earlier this spring, are negatively impacting earnings.

From home improvement chains to amusement parks to power companies, we’ve gathered what companies are saying about the weather's role in the bottom line.

  • Home Depot. The home improvement retailer saw its biggest sales decline since 2009, in part because bad weather delayed many building projects. Home Depot CEO Ted Decker in an earnings call this week said, “Our sales for the quarter were below our expectations, primarily driven by lumber deflation and unfavorable weather. Particularly in our Western division, as extreme weather events in California disproportionately impacted our results.”
  • Duke Energy. Unseasonably warm weather in several states drove down the energy company’s adjusted earnings per share in Q1 as consumers used less power to heat their homes. Duke Energy CEO Lynn Good told investors, “These results reflect a $0.22 headwind from weather, with January and February ranking among the warmest winter months on record across our service territories. In fact, DEP had its warmest January and February in the last 32 years.” Duke Energy CFO Brian Savoy added, “This is the most significant weather impact we've seen in recent memory.”
  • Bally’s Corporation. While the casino operator had a profitable quarter, flooding in Lake Tahoe and tornadoes in Evansville, Indiana, dented earnings. During an earnings call, CFO Robert Lavan said, “Our results were negatively impacted by material weather disruptions in Tahoe. Similarly, towards the end of March, our Evansville property was negatively impacted by tornadoes, which struck the area. A cumulative effect of Tahoe and Evansville caused a $3.5 million shortfall at those two properties.”
  • Cedar Fair Entertainment Company. The amusement and water park operator saw a 14.1% drop in revenue and a first quarter loss per share of $2.61 as bad weather cramped attendance. CEO Richard Zimmerman said on the Q1 earnings call, “While our first quarter results did not meet expectations, the shortfalls are directly attributable to the worst period of weather we've experienced in several decades at our California parks.”
News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.