Report: Supply chain agility contributes positively to stock performance

Editor’s note: A version of this article first appeared in the Straight Talk newsletter on April 20. To sign up for the weekly newsletter and receive news like this before others, click here.

The COVID-19 pandemic ushered in a new era of supply chain visibility. Not in terms of what supply chain professionals have traditionally sought, but rather the importance of the supply chain to company performance.

Now, that importance has been documented, and the impact it has on a company’s fortunes can be clearly seen.

According to Cleo’s 2025 Supply Chain Earnings Impact Report, companies that invest in real-time visibility, automation, and operational agility are consistently outperforming their peers on Wall Street.

The report analyzed more than 1,000 earnings calls between 2019 and 2025 from mid-sized companies in the Russell 2000 exchange, analyzing the calls for key supply chain terminology and reviewing stock prices of the firms in the seven days prior and the seven days following the earnings call. The findings draw a clear line between market winners and underperformers—and the supply chain is at the center of that divide.

“Companies that prioritized resilience, technology integration, and data-driven decision-making didn’t just survive—they outperformed the market,” the report states.

Among the analyzed companies, Cleo found that 46% of companies whose stocks declined in the day’s following the earnings calls cited disruptions, with 37% reporting delays as a major contributing factor to their performance. Additional 44% that saw stock declines referenced visibility issues and 42% cited backlogs.

In total, the report found that 27% of earnings calls in 2022 included supply chain discussions—up from just 2% in 2019—and 51% of companies that experienced stock price increases noted having greater control over supplier onboarding as a critical success factor.

“Uncertainty is the new normal in supply chains. The past five years have shown us that disruption isn’t an exception—it’s an expectation,” Mahesh Rajasekharan, CEO at Cleo, says. “From pandemic-driven shutdowns to geopolitical instability and climate-related crises, volatility is the only certainty. Our findings make one thing clear: Businesses that embrace supply chain visibility, automation, and technology integration don’t just survive through these challenges—they thrive and come out ahead.”

The Bell Curve of disruption

Supply chain conversations peaked in 2022, as companies wrestled with the fallout from COVID-19, inventory misalignments, labor shortages, and global port congestion. While earnings calls have since quieted, the report notes that the effects are long-lasting: the average company took 176 days to recover its stock value following a supply chain-related disruption.

Major global events—including the pandemic, the Suez Canal blockage, Red Sea shipping threats, and the return of tariff uncertainty—have underscored the fragility of global supply networks. But Cleo’s research shows that volatility favors the prepared.

What winners got right

Companies that delivered strong earnings and stock gains shared five critical characteristics, the report found. They are:

1. They blended workforce development, supplier expansion with automation. Leading companies upskilled employees, paired teams with smart technology, and built strong supplier partnerships to enable faster pivots and better execution. Twenty-six percent cited workforce improvements as a contributing factor to earnings growth.
2. Used backlogs as strategic growth engines. Companies focused on high-margin products and used order backlogs as a signal to investors of long-term stability. Fifty percent of companies said backlogs were a sign of future growth.  
3. They turned pent-up demand into a strategic growth engine. Companies capitalized on demand and easing restrictions by focusing on strategic positioning, virtual brand expansions, and omnichannel strategies to retain current customers and attract new ones.
4. They prioritized operational efficiency. High-performing companies cut costs and increased productivity by leveraging Lean processes, dynamic pricing, and demand-driven production to help protect margins.
5. They embraced market shifts. Top performers moved quickly into growth areas like e-commerce, electric vehicles, and virtual product categories, and used supply chain agility to accelerate product launches and tap into new revenue streams.

The common thread to the leaders, Cleo found, was a willingness to embrace the supply chain as a catalyst for growth.

“Rather than reacting to disruptions, winners leveraged real-time visibility, smart automation, and proactive planning to turn challenges into opportunities—futureproofing their supply chains while unlocking new revenue streams,” the report states.

Where others fell behind

Companies that struggled had one or more of these five failings:

1. Disruptions, delays and visibility gaps. Companies that failed to anticipate and manage disruptions such as slow production or late deliveries saw cascading challenges and lost revenue. A lack of visibility resulted in reactive decision-making, with 44% of companies facing stock declines citing visibility issues as the main cause, and 42% saying production backlogs were an issue.
2. Rising costs without pricing power. Sudden input cost increases for items such as raw materials, transportation and labor strained margins. Lagging companies were slow to adjust prices and saw profit margins shrink, undermining investor confidence.
3. Failure to adjust to a post-pandemic world. Many companies failed to adjust to a post-pandemic market, with 77% of companies that saw stock declines citing COVID-related impacts and 29% citing labor challenges.
4. Market weaknesses. Companies that relied too heavily on specific markets or that used outdated supply chain resilience strategies were more vulnerable to external shocks. Underperforming core product lines and regional disruptions were among the challenges faced, with 27% citing weather events impacting stock levels. Inability to pivot quickly led to prolonged disruptions.
5. Execution failures and investor skepticism. Operational inefficiencies, particularly in individual business units that increased costs and dragged revenues overall, and vague recovery timelines undermined investor confidence.

Among the companies that underperformed, Cleo found that a failure to modernize the foundational technologies and data strategies were a core culprit to lower stock performance.

“Supply chain strength isn’t built in the moment of crisis—it’s the result of strategic, long-term investments in integration, agility, and data-driven decision-making,” the report states.

Looking ahead: A blueprint for resilient growth

The report closes with a roadmap to future-proofing supply chains. Among Cleo’s recommendations:

1. Build agility and diversify suppliers to anticipate and mitigate disruptions
2. Leverage technology (automation, AI) to reduce manual tasks and improve real-time decision-making
3. Centralize business operations through integration platforms that connect disparate systems
4. Build and manage high-value backlogs strategically, prioritizing high-margin orders and align backlogs with demand forecasts
5. Align pricing with costs by regularly reviewing cost trends and implementing dynamic pricing updates
6. Invest in workforce development and automation by upskilling employees while integration automation
7. Exceed customer and investor expectations by adopting real-time analytics to track KPIs and improve forecasting accuracy.

“As our report shows, the companies that thrived didn’t just react to disruptions—they prepared for them. The difference between winners and losers came down to proactive strategies: Companies that diversified their supply chains and invested in automation turned volatility into opportunity. These are critical learnings for companies to get ahead of the next major supply chain disruption,” Rajasekharan concludes.

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