1. Setup Recap
Original prediction (CPB, before the open): called for a downside reaction (mid-single digits) on the idea that the tape was focused on tariffs/costs and the forward message, not just the quarter.
What the base case expected: “fine” results but a cautious forward posture that keeps pressure on the stock.
Key evidence emphasis (from the preview framing): forward profitability/cost messaging as the deciding factor.
2. Results vs Expectations
Reported results vs consensus:
- EPS beat consensus on an adjusted basis (0.77 vs 0.73 expected).
- Revenue beat consensus (2.68B vs 2.66B expected).
Guidance and management tone:
- Full-year outlook was reaffirmed; the forward frame acknowledged tariff-driven costs and mitigation actions, but did not step up the outlook.
Qualitative surprises:
- The “beat” didn’t change the macro/cost narrative; investors continued to price the name through the lens of tariff pressure and category softness.
3. Price Action & Scoreboard
Because this was before-the-open, the scoring window is: prior close → report-day open/close.
- Pre-earnings close: 30.04
- Reaction-day open: 30.58
- Reaction-day close: 28.47
Computed:
- Earnings gap return: 0.01798 (up)
- Session return: -0.05226 (down)
Scoreboard:
- Opening gap direction vs prediction: did not match (gapped up).
- Full-session direction vs prediction: matched (sold off into a down close).
- Meaningful reversal: yes — up open reversed into a large down close.
4. Options, Flows & Example Structures
Options/vol:
- No auditable post-print IV/skew snapshots in the captured sources; not grading vol crush.
Flows / positioning:
- No clean flow/short updates in-scope.
Example structures:
- The specific structures from the prediction aren’t available in the captured sources; not grading individual spreads.
5. Hindsight on Reasoning & Weights
- The model was early on direction (wrong at the open), but right on the day’s close: the market rejected the initial “beat” pop.
- The key was narrative: tariff cost pressure and forward profitability framing mattered more than the quarter beating by a few cents.
Weight check:
- Correctly weighted narrative/cost pressure for the close outcome.
- Underweighted the chance of an initial relief pop before sellers took control.
6. Lessons & Playbook Updates
Ticker-specific:
- For CPB, a small beat can still reverse hard if the forward margin/cost story stays uncomfortable.
Process tweak:
- Treat “beat + reaffirm” as a high reversal-risk setup when the market is already focused on costs and pricing elasticity.
Published: