Let’s dig into the relative performance of Dole (NYSE:DOLE) and its peers as we unravel the now-completed Q2 perishable food earnings season.
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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 5.7%.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Luckily, perishable food stocks have performed well with share prices up 12.2% on average since the latest earnings results.
Dole (NYSE:DOLE)
Cherished for its delicious, world-famous pineapples and Hawaiian roots, Dole (NYSE:DOLE) is a global agricultural company specializing in fresh fruits and vegetables.Dole reported revenues of $2.12 billion, flat year on year. This print exceeded analysts’ expectations by 1.3%. Overall, it was a strong quarter for the company with a decent beat of analysts’ operating margin and earnings estimates.
Interestingly, the stock is up 9.2% since reporting and currently trades at $15.89.
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Best Q2: Mission Produce (NASDAQ:AVO)
Founded in 1983 in California, Mission Produce (NASDAQ:AVO) grows, packages, and distributes avocados.Mission Produce reported revenues of $324 million, up 23.9% year on year, outperforming analysts’ expectations by 40.3%. The business had an incredible quarter with an impressive beat of analysts’ earnings estimates and gross margin estimates.
Mission Produce scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 16.8% since reporting. It currently trades at $12.50.
Weakest Q2: 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 $785.9 million, up 71.1% year on year, exceeding analysts’ expectations by 11.5%. Still, it was a slower quarter as it posted a miss of analysts’ earnings estimates.
Interestingly, the stock is up 16% since the results and currently trades at $89.20.
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 $1.14 billion, down 3.5% year on year. This number missed analysts’ expectations by 3.5%. In spite of that, it was a strong quarter as it logged an impressive beat of analysts’ earnings estimates.
Fresh Del Monte Produce had the weakest performance against analyst estimates among its peers. The stock is up 17.3% since reporting and currently trades at $28.89.
Calavo (NASDAQ:CVGW)
A trailblazer in the avocado industry, Calavo Growers (NASDAQ:CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.Calavo reported revenues of $179.6 million, down 30.9% year on year. This number met analysts’ expectations. Taking a step back, it was a mixed quarter as it also logged an impressive beat of analysts’ earnings estimates but a miss of analysts’ gross margin estimates.
Calavo had the slowest revenue growth among its peers. The stock is up 16.7% since reporting and currently trades at $28.05.
This content was originally published on Stock Story
