Disaggregated Sales and Stock Returns

Sumit Agarwal, Wenlan Qian, Xin Zou*

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    9 Citations (Scopus)
    77 Downloads (Pure)


    Using transaction-level credit-card spending from a large U.S. financial institution, we show that disaggregated sales provide accurate and persistent signals of customer demand relevant to a firm’s stock pricing. After controlling for earnings and sales surprises, one interquintile increase in the adjusted customer spending during a firm’s fiscal quarter leads to a 1.5 percentage point increase in the 60-day post–earnings announcement cumulative abnormal return. The predictability concentrates in consumer-oriented firms, especially those relying more on indirect sales distribution channels. We also find a stronger return response to spending from high-FICO-score, high-liquidity, and loyal customers. The transmission speed of disaggregated sales information is slower than that of the earnings information, and small firms or firms far from their end customers exhibit a more delayed price response. Finally, the return implications of adjusted customer spending extend to firms along the production chain.

    Original languageEnglish
    Pages (from-to)7167-7183
    Number of pages17
    JournalManagement Science
    Issue number11
    Early online date19 Feb 2021
    Publication statusPublished - Nov 2021

    Scopus Subject Areas

    • Strategy and Management
    • Management Science and Operations Research

    User-Defined Keywords

    • Big data
    • Consumption
    • Credit cards
    • Customer demand
    • Disaggregated sales
    • Financial institution
    • Household finance
    • Informed investors
    • Return predictability


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