If you haven’t heard a lot about pricing power this earnings season, there’s a good reason: There hasn’t been a lot of it to go around. Many of the companies that have opted to pass along higher costs to consumers in the form of price increases are seeing lower volumes. There are a number of reasons for this, including tougher comparisons with last year’s results, lower demand and constrained supply. Despite this, there are some firms – like most (but not all) travel companies – that are still exhibiting strong pricing power. Outside the travel space, a prime example is Goodyear Tire , which posted its second-quarter results Friday morning. The tire maker continues to do very well despite raw material inflation pressures. Its earnings per share handily beat analyst estimates by 10 cents, and shares are trading higher. Net income rose to $166 million, or 58 cents per share, from $67 million, or 27 cents per share, a year ago. Excluding items, Goodyear earned 46 cents per share, while analysts surveyed by Refinitiv had predicted a profit of 36 cents per share. Goodyear said “price/mix exceeded raw materials by more than $140M.” Pretty impressive. Notably, it has made similar comments in previous quarters, too. Volumes were still up 7% in its legacy business. (You still have to replace your car tires now that everybody’s back on the roads again!) The flip side to pricing power is the issue of price ceilings. It’s unclear if we’re seeing signs of price ceilings yet, but it’s something to be on the lookout for down the road. On Monday, Avis Budget’s earnings report revealed it saw strong demand in the second quarter, but its average rates were only up 2% in the Americas segment. Another surprising example came Thursday after the market’s close. Expedia – like all travel companies – is reaping the benefits of pent-up vacation demand. Lodging bookings are at a record levels . But the average daily booked lodging rates rose only 3%. Admittedly, rates were lapping tough comparisons. Last year, the metric soared 49% in the second quarter. In the first quarter, rates were only up 4% year over year, too. But Expedia’s numbers don’t match up with what we’re seeing across most of the lodging industry. Booking Holdings showed strong growth in rates still in its latest results . So did Airbnb . And the situation has remained strong at both Hilton and Marriott . So it’s a bit of a strange situation with Expedia, which makes it worth watching over the next three to six months to see if other travel companies see any leveling off in rates.
These companies are still flexing pricing power amid strong consumer demand
