Economists have already blamed soft numbers on harsh winter weather. Now CEOs will get their shot.
As the first-quarter earnings season gets started, 9 out of the 21 companies that have reported have mentioned the negative impact of their weather on earnings, according to FactSet. Notably, 6 of these 9 failed to beat earnings expectations.
While the current sample size is small, if this trend continues, then 214 S&P 500 companies will cite the negative impact of weather. This compares with the 195 S&P 500 companies that mentioned it in their fourth-quarter results.
The wide range of companies reporting weather disturbances could be an indication that weather has been a true drag on economic activity in 2014.
"Maybe in quarters past it's been more of an excuse, but this time around, it's probably a more legitimate reason why earnings and revenues have fallen short of expectations," said FactSet senior earnings analyst John Butters.
The problem is that when it comes to any given company, gauging just how big of an impact the weather has had can be nearly impossible for investors and financial analysts alike. As one analyst told CNBC.com, there's simply no way for an outsider to assess whether a company could be overstating the effect of a harsh winter on sales.
On General Mills' earnings call, CFO Don Mulligan said that "severe winter weather resulted in weak sales trends across the food industry and our categories." Later in the call, RBC analyst David Palmer challenged management to clarify the weather impact, given that "restaurants were suffering over those same two months, and so it seems logical that people were eating more at home."
In response, the company's chairman and CEO, Ken Powell, said that in addition to disrupting plant operations and logistics, harsh weather led to fewer trips to food retailers, restaurants and cafeterias. So consumers were "staying at home and probably drawing down a bit from their own pantries, which slowed down the industry."