A year ago, investors were reaping the rewards of a reporting season that pointed to a significant turnaround in corporate earnings, prompting a number of companies to reinstate dividends, launch share buyback programs, and reinvest for growth.

Fast forward to the beginning of the new year, and the corporate outlook is more murky. Recent months have seen businesses battle supply chain and labour constraints. Inflation and cost pressures are weighing on companies and consumers. Omicron has dampened consumer confidence. Results over the coming weeks will shed light on these challenges, but here are the key questions.

Which price-makers and price-takers will emerge amid rising inflation?

With inflation coming in at 3.5% during the December quarter, the signs are already in place that cost concerns will prove a key theme this reporting season. And that if you disregard the fact a number of companies have already come out and flagged a warning about the impact of inflation.

Domino (ASX: DMP) and Inghams (ASX: ING) were among the first to warn about rising input costs late last year. They have been joined by large-cap players such as Fortescue Metals Group (ASX: FMG), which has signalled cost inflation of around 20%, while Liontown Resources (ASX: LTR) has indicated its new lithium mine will cost up to 45% more than originally forecast. That comes amid rising labour costs, transport and fuel costs, as well as raw materials.

The prospect that price-makers', which are businesses with price-setting power, may be able to pass on higher costs could separate them from companies that are more exposed to inflationary pressure. This might include mining service operators, pathology related businesses, and energy producers, among others.

How will supply chain disruptions hit the top and bottom line?

Already a factor contributing towards higher labour costs and margin pressure, supply chain disruptions are also something that may hit the top line of a number of companies including Pilbara Minerals (ASX: PLS), which has forewarned export volumes could be downgraded.

Mining companies based out of Western Australia have pointed to significant difficulties in securing labour amid closed borders, with labour shortages impacting costs and operations.

Meanwhile, supermarkets like Woolworths (ASX: WOW) have also faced consistent issues in sourcing goods, staffing availability and difficulties stocking shelves as the spread of Omicron meant a growing contingent of its workforce was forced into isolation. Woolworths' CEO Brad Banducci cited the HY22 environment as one of the most challenging in recent history due to operational constraints.Food suppliers like Bega (ASX: BGA) have also touched on the stress and bottlenecks tied to the supply chain, which have been impacting costs.Elsewhere, natural disasters are also taking their toll, with Whitehaven Coal (ASX: WHC) warning about rainfall disrupting production, and recent floods in South Australia disrupting the train network that spans the Nullabor and serves as a food supply line for the likes of Coles (ASX: COL).

With interest rates set to rise, do the banks see conditions improving?

As central banks around the world slowly come around to the prospect of a new rate hike cycle, the Reserve Bank of Australia is expected to follow suit, even though it is currently downplaying the odds of a near-term hike.

Nonetheless, more analysts and company directors are expecting the RBA to move on fiscal policy, including Westpac (ASX: WBC) and National Australia Bank (ASX: NAB), which are both tipping the first increase in local interest rates for the second-half of this year.

The banks have seen their net interest margins (NIM) squeezed in recent quarters amid historically-low rates, as well as an intense level of competition in the mortgage market that could dampen what might normally be the tailwinds of a rising rate environment. 

This upcoming reporting season, particularly the mid-year result from Commonwealth Bank (ASX: CBA), will provide another clue on whether NIM has deteriorated further across the industry, notwithstanding some banks have already moved to lift fixed rates in recent weeks. 

More broadly, companies with high debt levels are among those susceptible to earnings shock' this reporting season, while stocks with strong balance sheets are likely to be shielded from concerns. The banking sector outlook will be key given the prospect of a credit squeeze for both households already swimming in record debt levels and businesses hit by COVID disruption leading into a rate hike.

What will be the impact of subdued consumer sentiment?

The new year has started with some of the worst consumer confidence readings seen throughout the entire pandemic, with consumers worried about the spread of the Omicron variant and other issues like rapid test availability.

Consumer discretionary shares and travel stocks are among those that have already seen hurdles dampen enthusiasm. Qantas (ASX: QAN) has revealed plans to reduce domestic capacity in the wake of the Omicron variant and Western Australia decision to keep its borders closed, while other travel platforms like Webjet (ASX: WEB) and Flight Centre (ASX: FLT) are contending with subdued appetite for long-haul travel.In terms of retailers, City Chic (ASX: CCX), Myer (ASX: MYR) and two of Wesfarmers' (ASX: WES) most-popular businesses in Kmart and Target are seeing an impact from supply chain disruption and subdued consumer sentiment on trading. Kogan (ASX: KGN) is another name facing similar challenges. 

Meanwhile, in the midst of a shadow lockdown', retailers are now coming to terms with trading conditions that are no longer being propped up by stimulus support and JobKeeper subsidies, ultimately taking the edge off buying activity and increasing running costs. Look out for commentary around trading conditions to start the new half, and guidance for conditions improving.

What is the new normal'?

The emergence of a number of headwinds in recent months has shifted the course for the economic rebound unfolding across Australia. This reporting season is likely to prove challenging for a number of companies to provide an outlook for, with the one-off' uncertainties from earlier in the pandemic now effectively replaced by a number of unknowns.