Financial Reporting and Consumer Behavior

We find that financial reporting spurs consumer behavior. Using granular GPS data, we find that foot-traffic to firms’ commerce locations significantly increases in the days following their earnings announcements. Foot-traffic increases more for announcements with extreme earnings surprises, that correspond to firms’ fiscal year-ends, that occur outside of Fridays, and that elicit greater internet search volume, consistent with earnings announcements spurring consumer behavior by garnering attention. Foot-traffic also rises with positive earnings surprises among firms selling durable goods, consistent with consumers responding to information about longevity conveyed by some firms’ earnings news. Using demographic information, we find financial reporting disproportionately affects foot-traffic in populations more likely to consume financial news. Collectively, these results suggest that earnings announcements serve a marketing function by drawing attention to and providing information about firms, and that a byproduct of the financial reporting process is that it shapes consumer behavior.