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 shelf-stable food stocks fared in Q2, starting with B&G Foods (NYSE:BGS).
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 0.7% while next quarter’s revenue guidance was 0.7% below.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
Thankfully, shelf-stable food stocks have been resilient with share prices up 7.3% on average since the latest earnings results.
B&G Foods (NYSE:BGS) Started as a small grocery store in New York City, B&G Foods (NYSE:BGS) is an American packaged foods company with a diverse portfolio of more than 50 brands.
B&G Foods reported revenues of $444.6 million, down 5.3% year on year. This print exceeded analysts’ expectations by 2%. Despite the top-line beat, it was still a slower quarter for the company with a miss of analysts’ earnings and gross margin estimates.
Commenting on the results, Casey Keller, President and Chief Executive Officer of B&G Foods, stated, “B&G Foods remains committed to execute against our long-term strategy to improve organic growth and focus the portfolio, despite short-term weakness in consumer packaged food demand.”
Interestingly, the stock is up 6.1% since reporting and currently trades at $9.20.
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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 22.5% since reporting. It currently trades at $60.47.
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 16.9% since the results and currently trades at $65.30.
TreeHouse Foods (NYSE:THS) Whether it be packaged crackers, broths, or beverages, Treehouse Foods (NYSE:NYSE:THS) produces a wide range of private-label foods for grocery and food service customers.
TreeHouse Foods reported revenues of $788.5 million, down 1.9% year on year. This print was in line with analysts’ expectations. It was a very strong quarter as it also put up an impressive beat of analysts’ earnings estimates.
The stock is up 6.7% since reporting and currently trades at $41.94.
Hain Celestial (NASDAQ:HAIN) Sold in over 75 countries around the world, Hain Celestial (NASDAQ:HAIN) is a natural and organic food company whose products range from snacks to teas to baby food.
Hain Celestial reported revenues of $418.8 million, down 6.5% year on year. This print was in line with analysts’ expectations. It was a very strong quarter as it also put up an impressive beat of analysts’ earnings and organic revenue growth estimates.
The stock is up 12.7% since reporting and currently trades at $7.71.
This content was originally published on Stock Story
