The Most Conservative Guidance Numbers Ever?

“We project revenues of $127 million.”

Six weeks later: “Actually, it’ll be $99 million.”

Announcements like these were a norm on investor calls in late 2023 and 2024, as firm after firm revised guidance figures they’d provided weeks or months earlier. As of this past September, 39 companies in the S&P 500 had lowered their guidance for full-year revenue, and more by the end of the quarter. CFOs at other firms read the tea leaves and stopped providing quarterly guidance altogether: Just 24% of S&P 500 companies were offering quarterly guidance as of Q3, down from the norm of roughly 30%, according to a report by Consello Research. “There were a lot of restated guidance numbers—and that’s a no-win,” says Jane Edison Stevenson, global vice chair of Korn Ferry.

The question is what strategy firms should use for announcing guidance next year. Some, such as companies impacted by upcoming Trump administration tariffs, are facing extremely hard-to-predict circumstances. For example, a US company with a third of its manufacturing and sales in China will understandably struggle to forecast upcoming revenues; many other firms will have their own supply chains impacted by tariffs. “It’s an enormous question mark for CEOs,” says Chad Astmann, co-head of global investment management at Korn Ferry.

Guidance figures have long been seen as an element of strong relationships with investors and shareholders, and each company decides how and when to provide them. Revised guidance, typically triggered by major geopolitical events such as wars or trade shifts, has historically been the exception. For example, a military conflict could cause firms operating in the war zone, as well as defense companies, to restate their guidance. During the pandemic, a wide variety of firms withheld guidance simultaneously, because, well, the world was ending—who could possibly predict future revenues? As Wall Street operated with fewer guidance figures, the no-guidance approach became mildly normalized, though it’s still seen as less than ideal. “It’s an admission that you have a little less control over revenue streams—which isn’t a good thing,” says Astmann.

Will firms return to the no-guidance approach? Experts say no. “The widespread suspension of guidance does not appear to be a prevalent strategy,” says Alan Guarino, vice chairman of the CEO and Board Services practice at Korn Ferry. While a few firms might be withholding guidance, many are continuing to provide it “to maintain transparency with investors.”

Instead, experts say to prepare for two strategies: caution and caveats. Firms facing uncertainties may release guidance with a caveat—or many caveats, says Astmann. And others may purposely lowball their expected numbers, a practice known as “sandbagging,” in order to overdeliver—which will in turn help them avoid multiple years of walking back guidance. Experts say this can be smart amid volatility. “In this era of ‘no-surprises’, planning conservatively so as to not have to restate guidance is usually a smart move.” says Edison Stevenson. 

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