As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at shelf-stable food stocks, starting with General Mills (NYSE:GIS).
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 mixed Q2. As a group, revenues missed analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was 0.7% below.
Stocks--especially those trading at higher multiples--had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts. Thankfully, shelf-stable food stocks have been resilient with share prices up 8.7% on average since the latest earnings results.
General Mills (NYSE:GIS) Best known for its portfolio of powerhouse breakfast cereal brands, General Mills (NYSE:GIS) is a packaged foods company that has also made a mark in cereals, baking products, and snacks.
General Mills reported revenues of $4.71 billion, down 6.3% year on year. This print fell short of analysts’ expectations by 3%. Overall, it was a slower quarter for the company with a miss of analysts’ organic revenue growth estimates.
“We delivered on our updated guidance in fiscal 2024 by pivoting our plans and enhancing our efficiency in response to a more challenging operating environment,” said General Mills Chairman and Chief Executive Officer Jeff Harmening.
Interestingly, the stock is up 9.8% since reporting and currently trades at $73.85.
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Best Q2: BellRing Brands (NYSE:BRBR) Spun out of Post (NYSE: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 $515.4 million, up 15.6% year on year, outperforming analysts’ expectations by 2%. The business had an exceptional quarter with an impressive beat of analysts’ gross margin and organic revenue growth estimates.
The market seems happy with the results as the stock is up 18.4% since reporting. It currently trades at $58.45.
Weakest Q2: 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 $1.61 billion, down 4.9% year on year, falling short of analysts’ expectations by 5.5%. It was a disappointing quarter as it posted underwhelming earnings guidance for the full year and a miss of analysts’ organic revenue growth estimates.
Lamb Weston delivered the weakest full-year guidance update in the group. As expected, the stock is down 18% since the results and currently trades at $64.49.
Mondelez (NASDAQ:MDLZ) Founded as Nabisco in 1903, Mondelez (NASDAQ:MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.
Mondelez reported revenues of $8.34 billion, flat year on year. This result lagged analysts' expectations by 1.3%. Overall, it was a slower quarter as it also logged a miss of analysts’ organic revenue growth estimates.
The stock is up 12.3% since reporting and currently trades at $75.27.
J&J Snack Foods (NASDAQ:JJSF) Best known for its SuperPretzel soft pretzels and ICEE frozen drinks, J&J Snack Foods (NASDAQ:JJSF) produces a range of snacks and beverages and distributes them primarily to supermarket and food service customers.
J&J Snack Foods reported revenues of $440 million, up 3.3% year on year. This result was in line with analysts’ expectations. Taking a step back, it was a slower quarter as it also produced a narrow beat of analysts’ operating margin estimates but a miss of analysts’ gross margin estimates.
The stock is up 6.9% since reporting and currently trades at $170.35.
This content was originally published on Stock Story
