Financial Reporting and Consumer Behavior

We show financial reporting shapes consumer behavior. Using granular GPS data, we find that foot-traffic to firms' commerce locations increases after their earnings announcements. Foot-traffic increases more for earnings announcements with extreme surprises and media coverage, that occur on non-Fridays, and that elicit greater internet search volume, consistent with announcements spurring consumer behavior by garnering attention. Foot-traffic also rises with positive earnings among firms selling durable goods, consistent with consumers responding to longevity information. These patterns create feedback effects that bolster revenues and increase the effectiveness of advertising expenditures. Collectively, these results suggest earnings announcements can serve a marketing function.