Disaggregated Sales and Stock Returns

Sumit Agarwal, Wenlan Qian, Xin Zou*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


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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