As the Q1 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers in the shelf-stable food industry, including Post (NYSE:POST) and its peers.
As America industrialized and moved away from an agricultural economy, people faced more demands on their time. Packaged foods emerged as a solution offering convenience to the evolving American family, whether it be canned goods or snacks. Today, Americans seek brands that are high in quality, reliable, and reasonably priced. Furthermore, there's a growing emphasis on health-conscious and sustainable food options. Packaged food stocks are considered resilient investments. People always need to eat, so these companies can enjoy consistent demand as long as they stay on top of changing consumer preferences. The industry spans from multinational corporations to smaller specialized firms and is subject to food safety and labeling regulations.
The 21 shelf-stable food stocks we track reported a decent Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was 1.6% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some of the shelf-stable food stocks have fared somewhat better than others, they collectively declined, with share prices falling 4.3% on average since the previous earnings results.
Post (NYSE:POST) Founded in 1895, Post (NYSE:POST) is a packaged food company known for its namesake breakfast cereal and healthier-for-you snacks.
Post reported revenues of $2.00 billion, up 23.4% year on year, falling short of analysts' expectations by 1.5%. It was a strong quarter for the company, with an impressive beat of analysts' gross margin estimates and a decent beat of analysts' earnings estimates.
The stock is down 0.5% since the results and currently trades at $104.36.
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Best Q1: Hershey (NYSE:HSY) Best known for its milk chocolate bar and Hershey's Kisses, Hershey (NYSE:HSY) is an iconic company known for its chocolate products.
Hershey reported revenues of $3.25 billion, up 8.9% year on year, outperforming analysts' expectations by 4.5%. It was an exceptional quarter for the company, with an impressive beat of analysts' organic revenue growth estimates.
The stock is down 6.2% since the results and currently trades at $183.75.
Weakest Q1: Lamb Weston (NYSE:LW) Best known for its Grown in Idaho brand, Lamb Weston (NYSE:LW) produces and distributes potato products such as frozen french fries and mashed potatoes.
Lamb Weston reported revenues of $1.46 billion, up 16.3% year on year, falling short of analysts' expectations by 11.8%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and a miss of analysts' gross margin estimates.
Lamb Weston had the weakest performance against analyst estimates and weakest full-year guidance update in the group. The stock is down 18.2% since the results and currently trades at $82.68.
BellRing Brands (NYSE:BRBR) Spun out of Post Holdings in 2019, Bellring Brands (NYSE:NYSE:BRBR) offers protein shakes, nutrition bars, and other products under the PowerBar, Premier Protein, and Dymatize brands.
BellRing Brands reported revenues of $494.6 million, up 28.3% year on year, surpassing analysts' expectations by 5.9%. It was a stunning quarter for the company, with an impressive beat of analysts' organic revenue growth estimates.
BellRing Brands achieved the fastest revenue growth among its peers. The stock is up 3.3% since the results and currently trades at $59.1.
Conagra (NYSE:CAG) Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today (NYSE:CAG) boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.
Conagra reported revenues of $3.03 billion, down 1.7% year on year, in line with analysts' expectations. It was a strong quarter for the company, with an impressive beat of analysts' organic revenue growth estimates and a decent beat of analysts' gross margin estimates.
The stock is down 2.7% since the results and currently trades at $28.28.
This content was originally published on Stock Story
