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Q1 Earnings Roundup: Kraft Heinz (NASDAQ:KHC) And The Rest Of The Shelf-Stable Food Segment


Adam Hejl /
2024/06/17 5:15 am EDT

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Kraft Heinz (NASDAQ:KHC) and the rest of the shelf-stable food stocks fared in Q1.

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 decent Q1; on average, revenues beat analyst consensus estimates by 0.5%. while next quarter's revenue guidance was 1.6% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some of the shelf-stable food stocks have fared somewhat better than others, they collectively declined, with share prices falling 3.4% on average since the previous earnings results.

Kraft Heinz (NASDAQ:KHC)

The result of a 2015 mega-merger between Kraft and Heinz, Kraft Heinz (NASDAQ:KHC) is a packaged foods giant whose products span coffee to cheese to packaged meat.

Kraft Heinz reported revenues of $6.41 billion, down 1.2% year on year, falling short of analysts' expectations by 0.3%. It was a solid quarter for the company: Kraft Heinz exceeded analysts' organic revenue growth expectations, although volumes--the lifeblood of a staples business--continue to be weak. Operating profit was simply in line. The company maintained its previously-provided full year guidance, showing that things are on track with no major surprises.

“I’m pleased that our strategic focus on unlocking end-to-end efficiencies and reinvesting in the business to drive sales growth continues to pay off,” said Kraft Heinz CEO Carlos Abrams-Rivera.

Kraft Heinz Total Revenue

The stock is down 15.9% since the results and currently trades at $32.46.

Is now the time to buy Kraft Heinz? Access our full analysis of the earnings results here, it's free.

Best Q1: Hershey (NYSE:HSY)

Best known for its milk chocolate bar and Hershey's Kisses, Hershey (NYSE:HSY) is an iconic company known for its chocolate products.

Hershey reported revenues of $3.25 billion, up 8.9% year on year, outperforming analysts' expectations by 4.5%. It was a stunning quarter for the company, with an impressive beat of analysts' revenue and EPS estimates.

Hershey Total Revenue

The stock is down 4.5% since the results and currently trades at $187.1.

Is now the time to buy Hershey? Access our full analysis of the earnings results here, it's free.

Weakest Q1: 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 $1.46 billion, up 16.3% year on year, falling short of analysts' expectations by 11.8%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and a miss of analysts' operating margin estimates.

Lamb Weston had the weakest performance against analyst estimates and weakest full-year guidance update in the group. The stock is down 14.5% since the results and currently trades at $86.41.

Read our full analysis of Lamb Weston's results here.

TreeHouse Foods (NYSE:THS)

Whether it be packaged crackers, broths, or beverages, Treehouse Foods (NYSE:THS) produces a wide range of private-label foods for grocery and food service customers.

TreeHouse Foods reported revenues of $820.7 million, down 3.9% year on year, surpassing analysts' expectations by 2.8%. It was a weaker quarter for the company, with a miss of analysts' operating margin estimates and a miss of analysts' gross margin estimates.

The stock is down 5.3% since the results and currently trades at $35.28.

Read our full, actionable report on TreeHouse Foods here, it's free.

SunOpta (NASDAQ:STKL)

Committed to clean-label foods, SunOpta (NASDAQGS:STKL) is a sustainability-focused food and beverage company specializing in the sourcing, processing, and packaging of natural and organic products.

SunOpta reported revenues of $182.8 million, up 18% year on year, surpassing analysts' expectations by 8.3%. It was a solid quarter for the company, with full-year revenue guidance exceeding analysts' expectations and a decent beat of analysts' gross margin estimates.

SunOpta pulled off the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is down 2.9% since the results and currently trades at $5.47.

Read our full, actionable report on SunOpta here, it's free.

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