Companies commonly offer temporary price discounts to stimulate product demand. Despite the considerable impact that such promotional strategies have on performance, firms disclose limited information regarding the extent to which they provide discounts. In this study, I evaluate whether market participants understand the implications of current period couponing activity – a special case of price discounts – for future performance. Using a sample of public manufacturers, I use transaction-level data to construct a firm-level measure of couponing activity and find that earnings are less persistent when generated with heavy reliance on couponing. Further, greater couponing in the current quarter increases analyst optimism for future periods, leading to an increased likelihood that the firm misses analyst expectations in the subsequent period (which results in predictably negative earnings announcement returns). Collectively, my findings highlight how market participants’ forecasting and trading decisions can benefit from information regarding price discounting.