cost cutting
Efficiency is the new growth story
Companies leading with cost discipline on earnings calls are either responding to investor pressure or buying time while growth re-accelerates. The operator question: is this sustainable efficiency or deferred investment that comes back to bite?
What Executives Are Saying
“We've built a strong foundation, with best-in class cost management and a focus on strengthening the balance sheet. Looking forward, I'm confident that continued investments in our network, customer experience and loyalty program will position us well to drive revenue growth and shareholder value in 2026 and beyond.”
“The American Airlines team is delivering on our commitments.”
“During the third quarter, we made solid progress in areas within our control, as we navigated a highly dynamic global environment. We advanced our portfolio optimization initiatives, accomplished cost savings through targeted streamlining, efficiently ran our plants, and generated robust cash flow.”
“Looking forward, we expect biofuel policy clarity and trade policy evolution to provide demand signals for our industry. However, based on the environment since our last earnings call, we are revising our 2025 full-year expectations primarily to reflect lower crush margins.”
“We are a company built to endure cycles, and our asset network, combined with our skilled workforce, will remain a source of reliable strength for our farmers, customers, partners and investors.”
“I am pleased to report third quarter revenues, Clear Aligner volumes, and non-GAAP operating margins, all above our outlook.”
Companies in This Theme
CVS Health is projecting mid-teens adjusted EPS CAGR through 2028, raised 2025 guidance across all metrics, and initiated 2026 guidance showing continued earnings acceleration. Aetna margin recovery and pharmacy-as-front-door strategy are the key drivers.
Crushing margins collapsed 93% as deferred U.S. biofuel policy killed demand. Full-year EPS guidance slashed from ~$4.00 to $3.25-$3.50. The only bright spots are Nutrition (up 24%) and ethanol pricing, but they can't offset the structural margin compression in the core oilseeds business.
Record Q3 revenue of $13.7B but still posted a net loss. Unit revenues declining across most regions. Cost pressure from labor (+8.9% YoY) is real, but fuel savings and debt reduction provide a cushion.
Pricing power is strong (+5% price gains) but volume is falling hard (-6% total, -7% in Tools & Outdoor). They're spending tariff-mitigation energy just to stay flat. The cost reduction program is nearly done ($1.9B of $2.0B target) which means the easy margin gains are behind them.
Air Products is in strategic reset mode — exiting $3.7B in clean energy projects, cutting costs globally, and refocusing on core industrial gases. Europe is the bright spot with 15% operating income growth. Americas margins compressed 380bps on higher maintenance costs and volume loss.
Volume declines across both segments with snack category softness persisting. Tariffs are hitting gross margins directly. Cost savings program delivering $15M/quarter but not enough to offset inflation and volume erosion.
Avery Dennison is holding steady in a tough environment but organic sales were flat. Materials Group is seeing deflation-related price reductions eating into volumes. Solutions Group is the bright spot with Intelligent Labels growing mid-single digits and Vestcom/Embelex both up double digits.
Orthodontic and dental markets remain mixed, especially in North America. International markets (EMEA, APAC, LatAm) are driving volume growth. Restructuring charges of $88M signal serious cost-cutting underway while teens/kids category is a bright spot at 8.3% YoY growth.
ATN is executing a slow grind from legacy telecom toward fiber and carrier services. Revenue growth is modest at 3% but Adjusted EBITDA grew 9% on cost discipline. The U.S. segment is turning the corner after a brutal prior year, but international mobility is flat.
Under Armour is expanding its restructuring plan to $255M in charges, separating Curry Brand, and cutting deeper. They raised adjusted operating income guidance to $95-110M but GAAP operating loss widened to $56-71M. This is a company in full transformation mode — not growth mode.
Celanese is in full-on cash preservation and deleveraging mode against a macro backdrop that refuses to improve. Sequential net sales declined 4%, auto builds fell 2%, and consumer/medical/industrial demand remains below normal. The only bright spots are self-help cost cuts and inventory discipline — not demand recovery.
IBM is firing on all cylinders with 7% revenue growth — highest in years — driven by z17 mainframe strength, accelerating AI book of business at $9.5B inception-to-date, and $4.5B in AI-powered productivity savings. All segments accelerated sequentially. Guidance raised across revenue, EBITDA, and free cash flow.
PepsiCo is under activist pressure from Elliott and responding with aggressive cost cuts, SKU rationalization (20% reduction), and plant closures. They're guiding 2-4% organic revenue growth for 2026 after essentially flat 2025 — signaling the consumer staples giant is grinding for growth. Core EPS declined ~0.5% in 2025.
Competitor Mentions Across This Theme
| Competitor | Mentions | By | Sentiment |
|---|---|---|---|
| Red Hat | 5 | 1 company | BULLISH |
| Wilmar International | 4 | 1 company | CAUTIOUS |
| DEWALT | 4 | 1 company | BULLISH |
| HashiCorp | 3 | 1 company | BULLISH |
| Angelalign Technology | 2 | 1 company | THREATENED |
| Mantle Ridge | 2 | 1 company | NEUTRAL |
| Citi | 1 | 1 company | BULLISH |
| Honeywell | 1 | 1 company | NEUTRAL |
Operator Implications
If you're building health tech or digital health engagement tools, CVS is investing heavily in an open consumer engagement platform — that's either a distribution partner or a well-funded competitor coming for your market.
If you're selling into ag-tech or biofuel supply chains, budget cycles are frozen until Washington provides biofuel policy clarity — probably not until mid-2026. Shift sales focus to Nutrition/flavors customers where ADM is actually growing.
If you sell into airline or corporate travel budgets, the spend is there but margins are razor-thin — expect procurement to squeeze harder on vendor pricing even as travel volumes hold steady.
If you're selling into construction, remodeling, or trades channels, volume is contracting despite price holds. Budget holders are buying less at higher prices — classic demand destruction signal. Plan for unit volume declines through H1 2026.
If you're selling into industrial gas or clean energy infrastructure, expect delayed timelines and tighter vendor scrutiny as APD rationalizes its project portfolio. Their $4B capex plan for FY2026 signals continued spending but with far more discipline on returns.
If you're selling into grocery retail or food distribution, expect private label pressure and tighter shelf-space decisions. Brands that can't prove velocity are getting cut.
If you're selling into retail or supply chain digitization, the RFID/intelligent labels wave is real and accelerating — Avery's Solutions Group growth confirms enterprise buyers are actively spending here even as broader materials demand softens.
If you're selling into dental or orthodontic practices, expect North American budgets to stay tight. International expansion and pediatric/teen segments are where the growth is — orient your GTM accordingly.
If you're building in rural connectivity or carrier-managed services, ATN's expansion signals growing demand in underserved markets — but the pace is methodical, not explosive. Budget cycles here are long.
If you're selling into athletic or lifestyle brands, expect procurement freezes and vendor consolidation as UA rationalizes contracts and headcount through FY2026.
If you sell into any Celanese end-market — auto, industrial, construction, coatings — budget cycles are frozen. Their entire strategy is cost-cutting and deleveraging, not growth investment. Don't expect procurement teams at materials companies to greenlight new vendor relationships until demand visibly turns.
If you sell into enterprise IT, IBM's clients are spending — especially on AI transformation and infrastructure modernization. The z17 cycle and AI consulting demand signal real budget allocation, not just pilots. Position your product as part of the AI deployment stack, not a net-new budget line.
If you sell into CPG or food retail supply chains, PepsiCo is consolidating hard — 3 plant closures, 20% SKU cuts, and go-to-market restructuring mean vendor relationships are being re-evaluated. Get ahead of procurement changes now or risk being rationalized out.