Consumers Show Resilience and Restraint in Early Earnings Reports

Earnings season is dawning for the third quarter, and the first corporate scorecards from Delta Air Lines, Levi Strauss and PepsiCo revealed a consumer who is still spending—but with discernment.

From air travel to denim to beverages, consumers in the United States are trading off, trading down and holding the line on discretionary purchases, balancing value and experience as budgets tighten.

Amid the spate of earnings reports that came this week, PYMNTS Intelligence data reinforced what corporate commentary and the numbers revealed. Consumers are still spending, but they are more careful and selective.

The PYMNTS Intelligence report “Why Paycheck-to-Paycheck Consumers Can’t Weather a $2,000 Shock” found that the share of consumers living paycheck to paycheck remains high. In August, 68% of U.S. consumers reported that they were in this position, a number that leaves little room for error when an unexpected bill arrives. The average household’s liquid savings have declined by more than 10% in the past 16 months, leaving thinner cushions to absorb shocks.

And yet, there’s at least some breathing room. Data released Tuesday (Oct. 7) by the Federal Reserve painted a picture of consumers who still have dry powder in the form of available credit but are using it judiciously as the year winds down. There was a 5.5% annualized contraction in revolving credit, a category that includes but is not limited to credit cards.

These findings contextualize the cautious optimism voiced by Delta, Levi Strauss and PepsiCo executives. Discretionary categories are holding up only where consumers perceive clear, lasting value.

Delta Air Lines’ September-quarter earnings results, released Thursday (Oct. 9), highlighted how affluent travelers continue to spend even as broader consumer sentiment cools.

President Glen Hauenstein told investors that “the premium products used to be loss leaders, and now they’re the highest margin products.”

He also said he thinks premium could surpass main-cabin revenue.

Revenue rose 4.1% year over year, driven by premium, corporate and loyalty segments. The company’s results showed that high-income travelers are still paying for comfort and perks, while mid-income fliers are pulling back to base fares or deferring trips altogether, a signal of stratified resilience.

Levi Strauss’ third-quarter earnings results, also released Thursday, captured the same divide.

Global direct-to-consumer sales were up 9%, CEO Michelle Gass said on the company’s call. Management also noted that momentum has been healthy and that there are signs of consumer optimism.

Gass said on the call that “our value brands, led by Signature by Levi Strauss & Co., delivered double-digit growth this quarter as consumers continue to look for trusted brands at accessible price points.”

This is a sign that consumers are trading off, not trading out, as they prioritize lasting goods and flexible price points, she said.

PepsiCo’s third-quarter earnings call, which took place Thursday, underscored how food and beverage spending has bifurcated between staples and indulgences.

“When you look at low-income households or middle-income households, they’re very stretched,” Chairman and CEO Ramon Laguarta told analysts. “That will create the need for affordability and value and price points and cost consciousness.”

Even so, Laguarta added that “some of the larger brands like Pepsi grew volume,” crediting smaller pack sizes and local pricing, as overall net revenues grew 2.6%.

Together, the earnings and PYMNTS data portray a U.S. consumer still active but increasingly calculating. Premium travel and name-brand apparel remain aspirational splurges, while food and beverage companies succeed when they deliver affordability and trust simultaneously.

Delta’s premium flyers continue to pay for comfort; Levi’s D2C customers are balancing price and brand; and PepsiCo’s shoppers are staying loyal to familiar products but scaling purchases to fit tighter budgets.

This year’s spending story is less about exuberance and more about economic triage, like stretching dollars, delaying indulgences and favoring brands that fit the new model of cost and confidence.

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