Over emphasis on quarterly earnings is bad for business

Tom Dougherty, CEO – Stealing Share

5 April 2013

They are short-term looks and can give you a false impression

Marketing campaigns and business models change at dizzying speeds. Problem is, many are scrapped before the true results are known. The culprit? Quarterly earnings.

“Thanks to quarterly earnings, long-term strategy and shareholders are often pitted against each another.”

 

quarterly earningsShareholders use quarterly earnings to judge advertising campaigns. That’s a mistake. Successful marketing moves should ultimately increase earnings, but one bad quarter doesn’t mean the strategy isn’t working.

Take JCPenney, for example. The retailer is in dire need of revitalization. Last year, the company unveiled its “square deal” initiative, which offered everyday low prices instead of coupons and other discounts. Once the first disappointing quarterly report came in, impatient shareholders stomped their feet and demanded a return to sales gimmicks.

Thanks to quarterly earnings, long-term strategy and shareholders are often pitted against each another. As a result, there is little chance to see big change.

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