Data released yesterday from the IRS shows a rapid catch-up in both number of tax returns processed as well as the average refund. This may be welcome news to companies who rely on U.S. consumers spending their tax refund checks.
Please note: This in no way represents investment advice. All transcript text provided by S&P Global Market Intelligence.
How does this compare to what companies are seeing in the field? A look at sentiment through our text analytics platform reveals most companies that reported this week took a cautious, wait-and-see approach. We will continue to track company sentiment vs IRS data throughout tax season. Stay tuned:
"The tax refund question has been kind of complicated and confusing. And I’m not sure we know where it’s going to end up for all of our guests because I think for some of our guests, the refunds are coming later, and we hope when they eventually come, that will help. For some of our guests, I think they’re going to be lower. Whether that’s because they were – the withholdings were changed, and they were getting more income during the year and didn’t notice. And to what degree that’s going to be a surprise and how that may or may not impact their spending, I think it’s not clear to us yet."
"We are certainly monitoring the pace and amount of tax returns as this could either be a significant benefit or detractor based on the total refund dollars that are processed."
"But to your point, so far, in the tax refund season, through last Friday, which we’ve all seen the numbers, we’re down about 40%. I think it’s $100 billion through last Friday this time last year and $60 billion this year. Clearly, that is impactful to our business. We talked every single year over the last decade about the importance of tax refund season. I think that it’s going to be really interesting to see what transpires over the next couple of weeks. The child income tax credit and earned income tax credit both have been delayed. We don’t see those dollars, I think the expectation is not begin to flow this week. We are anxiously awaiting them,and we are going to make sure we are in very good shape and prepared to take advantage of whatever tax monies flow. At the end of the day, there’s nothing we can do about it."
"Early looks at 2019, the consumer continues to look fine. Remember, though, that January is a fairly light month for us and February is in terms of just overall spend. But I wouldn’t say that we’re seeing any signs of deterioration at this point."
"Of course, in February, so far, it’s hard to say because the income tax refunds are coming in slower, and we won’t know for the next couple of weeks what happens with the tax refunds."
"Where we are in optics is we are currently entering soft of our key selling season. This is – this for optics is like the middle of December for most other retailers, and tax refunds are an important part of the Q1, Q2 selling season. It is early. Our core customer is just now starting to get their tax refund dollars, so it’s really hard to comment in any way on that."
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Transcript text provided by S&P Global Market Intelligence.
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