The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Freshpet (NASDAQ:FRPT) and the rest of the perishable food stocks fared in Q1.
The perishable food industry is diverse, encompassing large-scale producers and distributors to specialty and artisanal brands. These companies sell produce, dairy products, meats, and baked goods and have become integral to serving modern American consumers who prioritize freshness, quality, and nutritional value. Investing in perishable food stocks presents both opportunities and challenges. While the perishable nature of products can introduce risks related to supply chain management and shelf life, it also creates a constant demand driven by the necessity for fresh food. Companies that can efficiently manage inventory, distribution, and quality control are well-positioned to thrive in this competitive market. Navigating the perishable food industry requires adherence to strict food safety standards, regulations, and labeling requirements.
The 11 perishable food stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 4.5%. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and perishable food stocks have held roughly steady amidst all this, with share prices up 0.1% on average since the previous earnings results.
Freshpet (NASDAQ:FRPT) Contrasting itself with the typical processed pet foods found throughout the industry, Freshpet (NASDAQ:FRPT) is a pet food company whose product portfolio includes natural meals and treats for dogs and cats.
Freshpet reported revenues of $223.8 million, up 33.6% year on year, topping analysts' expectations by 3.6%. It was a very strong quarter for the company, with an impressive beat of analysts' earnings and operating margin estimates.
"Our strong first quarter results provide solid evidence that we can deliver our long-term financial goals– and we are now determined to prove that we can achieve this level of performance consistently over time,” commented Billy Cyr, Freshpet’s Chief Executive Officer.
Freshpet delivered the weakest full-year guidance update of the whole group. The stock is up 18.6% since the results and currently trades at $130.
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Best Q1: Mission Produce (NASDAQ:AVO) Founded in 1983 in California, Mission Produce (NASDAQ:AVO) grows, packages, and distributes avocados.
Mission Produce reported revenues of $297.6 million, up 34.6% year on year, outperforming analysts' expectations by 31.4%. It was an incredible quarter for the company, with an impressive beat of analysts' earnings estimates.
Mission Produce pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 14.7% since the results and currently trades at $9.74.
Weakest Q1: Fresh Del Monte Produce (NYSE:FDP) Translating to "of the mountain" in Spanish, Fresh Del Monte (NYSE:FDP) is a leader in providing high-quality, sustainably grown fresh fruits and vegetables.
Fresh Del Monte Produce reported revenues of $1.11 billion, down 1.8% year on year, falling short of analysts' expectations by 3.8%. It was a weak quarter for the company, with a miss of analysts' gross margin and earnings estimates.
Fresh Del Monte Produce had the weakest performance against analyst estimates in the group. The stock is down 15.6% since the results and currently trades at $21.98.
Cal-Maine (NASDAQ:CALM) Known for brands such as Egg-Land’s Best and Land O’ Lakes, Cal-Maine (NASDAQ:CALM) produces, packages, and distributes eggs.
Cal-Maine reported revenues of $703.1 million, down 29.5% year on year, surpassing analysts' expectations by 1.5%. It was a weaker quarter for the company, with a miss of analysts' gross margin estimates.
Cal-Maine had the slowest revenue growth among its peers. The stock is up 2.7% since the results and currently trades at $60.48.
Beyond Meat (NASDAQ:BYND) A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQGS:BYND) is a food company crafting innovative, sustainable, and delicious alternatives to traditional meat products.
Beyond Meat reported revenues of $75.6 million, down 18% year on year, in line with analysts' expectations. It was a weak quarter for the company, with a miss of analysts' gross margin and earnings estimates.
The stock is down 16% since the results and currently trades at $6.89.
