What are CFOs planning if the economy goes south?

Faced with the prospect of a weakening economy, or even a recession, finance chiefs are dusting off the playbook from past recessions and devising strategies for what is to come.

Across industries, companies have been hit by inflation, which at 8.3% in April is close to its highest level in decades. How long the Federal Reserve̵7;s tough campaign to halt those price advances will continue is unclear.

delinquency on certain consumer loans As soon as the epidemic stimulus amount is over, it has started increasing. Meanwhile, supply-chain disruptions and high commodity prices—due to external events such as Russia’s war on Ukraine and virus-related lockdowns in China—continue to dog business.

Whether these factors add to the broader slowdown remains to be seen. The CFO Journal interviewed chief financial officers, asked what they were preparing for, and reviewed CFO comments at recent investor events. His comments follow, some of which have been edited or condensed for clarity.

Ernst Tunison, TripAdvisor Inc. CFO of, a Needham, Mass.-based online travel company

Ernst Tunison, TripAdvisor’s Chief Financial Officer.



There may be a recession on the horizon, but there’s so much demand in travel that we think it could be one of the last categories that consumers are going to really afford affordable. (June 2)

Jonathan Ramsden, CFO of Big Lots Inc., a Columbus, Ohio-based discount retailer

Being a value-oriented retailer, our experience in the past is that we have performed relatively well during recessions as people are going price up and trading down. That said, it depends on how long or severe the downturn may be. (June 1)

Tom Casey, CFO of LendingClub Corp., a San Francisco-based online lender

We have been disciplined in not extending our credit to those who will be most affected – hourly workers may lose a few hours or potentially lose their jobs as the economy slows. It takes time to play through, and we’ve already put a lot into our models.

Obviously, higher interest rates put pressure on our investor base, and we’ll continue to work on passing some of that on to the borrower. So the cost of credit will go up, and we’ll be disciplined on how fast we do it. (June 1)

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Gary Swidler is the Chief Financial Officer of Match Group.


Courtesy of Match Group

Gary Swidler, CFO of Dallas-based online dating site Match Group Inc.

I think the business was very recession-proof in 2008. In fact, in the midst of the great financial crisis in 2008, there was some spurt in this because people had a little more time on their hands. [A subscription is] Don’t spend they’re going to cut it if they can go and meet people and still be happy. And so I’m not expecting that we’re going to see a significant impact from the downturn on our business. (June 1)

Fernando Tenenbaum, CFO of Anheuser-Busch InBev SA, a Leuven, Belgium-based brewing company

There is no change in the outlook this year. We expect 4% to 8% [earnings before interest, tax, depreciation and amortization] Growth and no change on that front. So far, the consumer is in good shape. So far, volumes are still in good shape.

Historically, beer has always been resilient, so I have no reason to believe it will be anything different going forward. We remain optimistic about the future. (May 31)

Julie Whelan, CFO of Williams-Sonoma Inc., a San Francisco-based home products company

First, we went through this at the very beginning of the pandemic. We all went through this in ’08 and ’09. And thankfully, we have the same management team that is here, so we know how to do that.

Hopefully, we are not in that situation. Certainly, we are not seeing anything close to that situation today. But we know how to reduce expenses. We know how to cut inventory, capital, advertising, withholding all discretionary spending. (May 25)

Bryce Hill, CFO of Applied Materials Inc., a Santa Clara, Calif.-based chip equipment manufacturer

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Bryce Hill, Chief Financial Officer of Applied Materials.


Applicable Materials

What if the atmosphere had changed? Usually the first thing that happens is that our customers will not place new orders. This is not happening.

The second thing would be that they would call us and try to take out the existing orders that they have. This is not happening.

And a third thing would be that their customers—think the biggest companies in the world that are manufacturing silicone products—will ask for less, because they’re starting to pile up inventory. This is not happening either.

Those are the signs we have today. (24 May)

Josh Charlesworth, CFO

Krispy Kreme Inc.,

A Charlotte, NC-based donut chain

Which is fortunate in the case of Krispy Kreme, do you start out with a higher gross margin. So for us, the most important thing is that we are taking advantage of the labor cost, the operating expense of donut shops by selling in more and more convenient locations. And so you get this low-frequency product with a fundamentally high gross-margin product, combined with a strategy that leverages existing assets and drives, therefore, a good margin flow.

It’s something that is working and works, no matter what the context. (May 13)

Eric Tiziani, CFO of Olaplex Holdings Inc., a Santa Barbara, California-based manufacturer of beauty products
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Eric Tiziani, Chief Financial Officer of Olaplex Holdings.


Olaplex Holdings

We enjoy participating in a category that has proven resilient through past economic cycles. In the first quarter of 2022, as reported [market research group] NPD, the prestige hair-care category grew 32% in US retail sales, the highest growth of any beauty category in the US and therefore, we believe it is a very resilient category through various economic cycles. Is, [it] There are significant tailwinds behind it, not just for 2022, but for many years to come.

We are the leaders, and so we believe the demand is going to be strong. (May 11)

James Mock, PerkinElmer Inc. CFO, a Waltham, Mass.-based scientific instrument manufacturer

It is a challenging market environment. But, we have a lot of recurring revenue to make us more resilient during a potential economic crisis. There is always more to do and we will continue to do more.

But I think a lot of work has been put into preparing us to deal with pandemic or cyclical adversity and we will be more resilient during that kind of market environment. (May 11)

Jim Peters, CFO of Whirlpool Corp., a Benton Harbor, Mich.-based home appliance company

As listings on the housing market continue to grow stronger and people stop living in their existing homes, remodeling is becoming more lucrative again. And so we look at all those factors right now in the US and for us, so we’re still pretty bullish on demand.

Our big issue is trying to stabilize our supply chain so that we can meet that demand. (April 27)

Recent stock market performance has prompted people to talk about a possible US recession. So what are the key economic indicators that have been solid recession trackers, and what can you do to prepare for a recession? WSJ’s Dion Rabouin explains. Illustration: David Fang

write to Kristin Broughton et [email protected]

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