As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the shelf-stable food industry, including J. M. Smucker (NYSE:SJM) and its peers.
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 growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. Thankfully, shelf-stable food stocks have been resilient with share prices up 8.8% on average since the latest earnings results.
J. M. Smucker (NYSE:SJM) Best known for its fruit jams and spreads, J.M Smucker (NYSE:SJM) is a packaged foods company whose products span peanut butter to coffee to pet food.
J. M. Smucker reported revenues of $2.13 billion, up 17.7% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a decent beat of analysts’ earnings estimates but underwhelming earnings guidance for the full year.
"We are pleased with the strong start of our fiscal year and ability to deliver net sales and earnings growth in what remains a dynamic consumer environment," said Mark Smucker, Chair of the Board, President and Chief Executive Officer.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $119.71.
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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 20.7% since reporting. It currently trades at $59.59.
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 16.4% since the results and currently trades at $65.69.
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 number was in line with analysts’ expectations. It was a very strong quarter as it also logged an impressive beat of analysts’ earnings and operating margin estimates.
The stock is up 10% since reporting and currently trades at $43.22.
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 result 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 17.8% since reporting and currently trades at $8.06.
This content was originally published on Stock Story
