The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how perishable food stocks fared in Q1, starting with Fresh Del Monte Produce (NYSE:FDP).
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 2.6% on average since the previous earnings results.
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%. Overall, it was a weak quarter for the company with a miss of analysts' gross margin estimates and a miss of analysts' earnings estimates.
“We are pleased with the ongoing momentum in our higher-margin fresh and value-added segment. During the first quarter of 2024, this prioritized area of our business delivered 5% revenue growth driven by our strategic initiatives around distribution, pricing, and premiumization. While service level issues and competitive market pressures in North America and Europe reduced our banana revenue, we continued to generate very strong cash flow, which fuels our growth strategy tied to innovation around fresh-cut and pineapples,” said Mohammad Abu-Ghazaleh, Fresh Del Monte’s Chairman and CEO.
Fresh Del Monte Produce delivered the weakest performance against analyst estimates of the whole group. The stock is down 9% since reporting and currently trades at $23.70.
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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. Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 3.9% since reporting. It currently trades at $10.98.
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.
As expected, the stock is down 25.2% since the results and currently trades at $6.14.
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%. Overall, 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 13.7% since reporting and currently trades at $66.99.
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, surpassing analysts' expectations by 3.6%. Zooming out, it was a solid quarter for the company with an impressive beat of analysts' earnings estimates.
Freshpet had the weakest full-year guidance update among its peers. The stock is up 8.8% since reporting and currently trades at $119.22.
This content was originally published on Stock Story
