PROFITS BEFORE LOWER PRICES:
As the U.S. Chamber of Commerce holds an event — including UPS CEO Carol Tomé as a keynote speaker — on the state of American businesses and on the eve of the Labor Department’s monthly report on the consumer price index, Republicans in Congress continue to conveniently let their big corporate donors off the hook for the outsized role they play on inflation. Much like how Congressional Republicans are exploiting the struggles of working families and small businesses navigating a once-in-a-lifetime pandemic, it’s clear many corporations are taking advantage of this moment for their own selfish gain.
More and more companies are using the pandemic to increase their wealth and line their shareholders’ pockets as they boast to their investors of record profits and healthy balance sheets. These corporations have a choice: they can reward themselves with lucrative stock buybacks and bigger CEO bonuses — or they can pass their success onto their customers with lower prices. As Accountable.US continues to document, too many companies are choosing to profiteer rather than do right by consumers and the economy.
- Albertsons Companies — owner of Safeway — enjoyed “better-than-expected results,” with its quarterly net income increasing 243% over the prior-year period — yet the company still chose to hike prices onto consumers.
- In the same breath that Constellation Brands — owner of notable alcohol brands such as Corona, Modelo, and SVEDKA Vodka — announced that their strong performance this quarter allowed them to increase its earnings per share guidance, it also shared that it was raising prices.
- Darden Restaurants — owner of Olive Garden and LongHorn Steakhouse — is hungry for higher profits at the expense of consumers. In its second quarter, Darden Restaurants’ net earnings increased by nearly $100 million over the previous year with the help of increased prices on Americans. Meanwhile, Darden spent over $400 million on stock buybacks and shareholder dividends for the quarter.
EARNINGS CALLS HIGHLIGHTS
- Albertsons Companies (January 11): For its 2021 fiscal year, Albertsons Company poured over $1.2 billion into capital expenditures and in its third quarter, paid out $56 million in dividends and has paid out $149 million to date.
- Walgreens Boots Alliance (January 6): For the quarter, Walgreens Boots Alliance spent $413 million on dividend payments and $154 million buying back company stock — a 40% increase on buybacks from the prior-year period.
- Darden Restaurants (December 17): Darden Restaurants spent over $400 million on stock buybacks and shareholder dividends, with the company still having over $760 million in its buyback program.
CORPORATE GREED IN ACTION
- Constellation Brands Chief Financial Officer Garth Hankinson: “As you know, we have a consumer set that skews a bit more Hispanic than some of our competitors, and in times of economic downturn, if you will, or weakness, they tend to get hit a little bit harder and they recover a little bit slower, so we want to make sure we’re not leaving any pricing on the table. We want to take as much as we can but we also don’t want to take so much pricing that we impair the performance of our brands or impair the growth of our brands.”
- As UPS CEO Carol Tomé cozies up today with the U.S. Chamber to discuss “opportunities accelerated by the pandemic,” we’re flashing back to October when Tome bragged about record operating profits and price increases: “When you add it up in the fourth quarter, we expect to generate record consolidated operating profit and expand operating margin year-over-year. While we are laser-focused on peak, our business doesn’t end on December 31st. Later this week, we will release our U.S. general rate increase. The 2022 increase will be 5.9%, reflecting the value of the services we offer and cost inflation pressures.”