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18 Public Companies Who Are Worried About Inflation

We are generally concerned about the inflation environment. There is too much debt in the system and more dollars chasing fewer and fewer goods. We have highlighted multiple times why we are accumulating gold, real assets and anything that could be used as an inflation hedge at a rapid pace. We are not alone. There are a substantial amount of public companies who have started to mention cost pressures due to inflation. The cycle of higher prices has begun.

This Keynesian experiment of cheap debt and endless spending is on its last legs. Interest rates will move up from here as investors dump bonds to avoid the potential of a real negative return. If rates move the bond market is over. The ability to borrow at 0% into infinity will end along with the financial markets as we know it.

We have tracked hundreds of companies that have mentioned they are seeing inflation in recent conference calls. Inflation is here whether you are prepared for it or not. Here are 18 companies that are worried about the recent inflationary trends.

18 Companies Worried About Inflation

Berkshire Hathaway: We are seeing very substantial inflation. It’s very interesting. We are raising prices. People are raising prices to us and it’s being accepted. We’ve got nine homebuilders in addition to our manufacture housing and operation, which is the largest in the country. So we really do a lot of housing. The costs are just up, up, up. Steel costs, you know, just every day they’re going up. – CNBC

Flower Foods Inc. (FLO): And you are seeing, a lot of volatility and inflation in packaging, particularly around the corrugated area and arena. But the reality is when you look at what’s driving kind of the commodity inflation, a lot of that is not necessarily wheat. I mean, the wheat crop is in pretty decent shape, but it’s other grains like corn and beans, and it’s more of a global market. We are seeing, China back into that market in a big way. And just — and as grains turn to feed grains and there is tightness on availability of the supply, then that starts to impact things like wheat and other grain crops. So, the reality is that today’s prices, if we had to go out and cover, it would be significant commodity inflation. But, we still have a lot of runway with regard to the corn crop, the bean crop. We’ll cycle a wheat crop but, we just thought it was important to get that out there from a transparency perspective. – 2021 Q1 Earnings Call

Advanced Drainage Systems (WMS): On the cost side, we are seeing inflationary pressure in materials, labor and transportation, as well as some issues with labor availability. Within transportation, the third-party market availability is tight, and there is inflationary cost pressure on diesel, wages and common carrier rates. 2021 Q4 Earnings Call

The Kroger Co. (KR): I do think there are a number of specific drivers that potentially create at higher inflation as we look further out this year. And our goal will be to manage it, as I mentioned earlier through the processes that we use. And I do you think that, typically some inflation for the food retail business is a good thing. If you can be in that anything around 3% is generally a nice place to be for the food retail industry. – BMO 16th Annual Farm to Market Conference

Brady Corporation (BRC):  The cost side of this recovery has definitely been swift and has absolutely resulted in inflation in areas such as resin, freight, paper, base materials and wages. – Q3 2021 Earnings Call

Groupo Aval Acciones y Valore S.A. (AVAL): The largest contribution to April’s inflation came from food, non-alcoholic beverages, and housing costs. Going forward, we expect headline inflation to continue to trend up, driven by a statistical base effect by a pass-through of higher commodity prices, and by a short lived effect of price increases in transportation associated to the ongoing demonstration – Q1 2021 Earnings Call

CSW Industrials, Inc. (CSWI): Our consolidated profitability metrics remain solid, with consolidated gross profit margin of 40.5% compared to 45.4% in the prior year period, with a decline primarily related to the effective purchase accounting as well as freight and transportation cost increases that accelerated more rapidly than we were able to pass on cost inflation to the market. – Q4 2021 Earnings Call

Hormel Foods Corporation (HRL): We anticipate inflationary pressure on freight in the back-half of the year, but tactical action to optimize our distribution with two new DCs combined with improvements in load efficiencies will help mitigate a portion of the increase. – Q2 2021 Earnings Call

Iron Mountain Incorporation (IRM): So, I would say on cost inflation, we certainly embedded in our guidance, as I talked about on the fourth quarter call, and again, on the first quarter call that we expected a level of inflation. The types of – where we would see inflation is traditional wage, and there’ll be some level of rent inflation, other costs, et cetera. – Berenberg USA Conference 2021

Lowe’s Corporation (LOW): Lumber again delivered the highest comp driven by strong Pro demand and unprecedented inflation in the category. Our electrical category posted strong comps in the quarter driven by inflation in copper as well as solid demand from the robust repair remodel market. – 2021 Q1 Earnings Call

Union Pacific (UNP): Fuel is probably the most direct, most immediate inflationary impact to us. But again, we hedge against that by passing that to customers on a surcharge basis, still visits on us, right. We had to talk about it last quarter. I am sure we will talk about it this quarter in terms of fuel surcharge lag on fuel price increase. But ultimately, in the long run, it kind of gets washed out. – BofA Conference

Analog Devices (ADI): So let me take the inflation piece first. So I think it was Ambrish who asked a question and we are seeing cost increases from our supply base, but we feel that we’re guiding margins on a net basis are going to be neutral for that, because we are where we can pushing that price through. – 2021 Q2 Earnings Call

Home Depot (HD): Similar to what we reported in our previous three quarters, the growth in our comp average ticket was driven by elevated project demand, customers trading up to new and innovative products, and continued inflation in many product categories, including lumber. Inflation from core commodity categories positively impacted our average ticket growth by approximately 375 basis points during the first quarter. – 2021 Q1 Earnings Transcript

Hostess Brands (TWNK): We are seeing inflation. We are seeing certain areas tick up a little bit more than we saw at the beginning of the year, but we are pretty confident that we can offset that with pricing productivity and mix – 2021 Q1 Earnings Call

Ross Stores (ROST): But overall, the recovery to 2019 margin levels, it’s highly dependent on strong sales performance. And over time — and again, the persistence of the cost inflation we’re seeing today, especially in things like freight. – 2021 Q1 Earnings Call

Colgate-Palmolive (CL): So yes, there has obviously been additional cost inflation. Things have moved farther and faster than we had expected. And so we need to adapt them. – Goldman Sachs 2021 Conference

Coinbase Global (COIN): As I mentioned, kind of there are three drivers for why they onboard today. One is portfolio diversification that crypto is now an accepted instrument to be in a diversified portfolio. Many people have an investment thesis that Bitcoin is new digital gold, is a store of value, it’s a hedge against inflation. – 2021 Barclays Conference

Masonite International Corp (DOOR): Since outlining our 2021 outlook earlier this year, the inflationary environment has worsened. We saw higher inflation on our wood purchases than contemplated in our original outlook and experienced rapidly increasing inflation in resin due to the impact of February’s severe winter weather, which extended all the way to the Gulf Coast. – Q1 2021 Earnings Call

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