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Berkshire Hathaway 2023: Warren Buffett says managers were 'surprised' by the economy

Warren Buffett is bracing for a slowdown in the economy this year, and his top managers are acting accordingly.

"It is a different climate than it was six months ago," Buffett told a packed house in Omaha, Nebraska, at the Berkshire Hathaway (BRK-A, BRK-B) annual meeting on Saturday.

Buffett added his managers "were surprised" by the economic conditions. As a result, many Berkshire companies will be employing sales to move excess inventory, Buffett suggested.

"In the general economy, the feedback we get is that perhaps the majority of our businesses will actually report lower earnings this year than last year," Buffett added.

Berkshire posted a $35.5 billion first quarter profit on Saturday. The results reflect gains on stocks such as Apple (AAPL).

Higher investment income also benefited the bottom line, and the company repurchased some $4.4 billion in stock.

Some Berkshire-owned companies told Yahoo Finance Live on the ground they are seeing a more cautious consumer, but nothing alarming.

"I think we're all cautious," Brooks Running CEO Jim Weber told Yahoo Finance. "And there's anxiety. There's apprehension. But we've seen in the past that running often can kind of transcend a recession."

Weber said he has seen record sales at Brooks from inside the Berkshire exhibition center this weekend.

"So we're pretty confident, cautiously, that running is going to be fine through this," Weber added. "But I don't think anyone knows. Retail is really hard to judge for fall. We think the consumers— their employment is good. You know, households are still in good, healthy shape. So I'm optimistic. But hard to know."

FILE - Warren Buffett, Chairman and CEO of Berkshire Hathaway, speaks during a game of bridge following the annual Berkshire Hathaway shareholders meeting on May 5, 2019, in Omaha, Neb. Buffett assured investors Wednesday, April 12, 2023, that Berkshire Hathaway will be fine when he's no longer around to lead the conglomerate because Vice Chairman Greg Abel will do a great job and the conglomerate's basic model won't change. (AP Photo/Nati Harnik, File)
Warren Buffett, Chairman and CEO of Berkshire Hathaway, speaks during a game of bridge following the annual Berkshire Hathaway shareholders meeting on May 5, 2019, in Omaha, Neb. (AP Photo/Nati Harnik, File) (ASSOCIATED PRESS)

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations or anything else? Email brian.sozzi@yahoofinance.com

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