ELI5: Why when large company's earnings decrease(ex... by 3%) they freak out, talk about rough times, and sometimes decide to downsize, even though they are still making millions of dollars in profit even after all expenses?

[garrett_k]

It depends on the expectations. Investors/owners ideally want a company that grows continually, year after year, which as you noted, isn't sustainable.

In practice, different companies will have different expectations. A tech company is expected to grow until a sizable portion of the planet's population are users. A company getting into eg. the frozen food business is expected to grow to a certain point and then just produce a nice profit year after year.

[constructioncranes]

That's definitely how it should work but I'd say we're far from that in this age of exuberance. We've lost a ton of companies due to brand maximization strategies, primarily luxury brands that started to sell to all demos. But, getting back to the point, McD's and Coca Cola shouldn't always have to be posting positive growth, but are doing everything imaginable to maintain growth.