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Unpacking Q1 Earnings: Lancaster Colony (NASDAQ:LANC) In The Context Of Other Shelf-Stable Food Stocks


Max Juang /
2024/07/04 8:46 am EDT

As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the shelf-stable food industry, including Lancaster Colony (NASDAQ:LANC) 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 decent Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was 1.6% below consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and while some of the shelf-stable food stocks have fared somewhat better than others, they collectively declined, with share prices falling 4.4% on average since the previous earnings results.

Lancaster Colony (NASDAQ:LANC)

Known for its frozen garlic bread and Parkerhouse rolls, Lancaster Colony (NASDAQ:LANC) sells bread, dressing, and dips to the retail and food service channels.

Lancaster Colony reported revenues of $471.4 million, up 1.4% year on year, in line with analysts' expectations. It was a slower quarter for the company, with a miss of analysts' earnings estimates and a miss of analysts' gross margin estimates.

CEO David A. Ciesinski commented, “We completed our fiscal third quarter with record net sales of $471.4 million. In the Retail segment, net sales increased 0.3% to $248.1 million driven by volume gains for our successful licensing program, led by Chick-fil-A® sauces and dressings; our newly introduced Subway® sandwich sauces and Texas Roadhouse® steak sauces; and Olive Garden® dressings. Sales volume for the Retail segment, measured in pounds shipped, increased 1.5%, outpacing the sales dollar growth as we invested in trade spending that supported household penetration growth and new items.”

Lancaster Colony Total Revenue

The stock is down 0.4% since the results and currently trades at $190.52.

Read our full report on Lancaster Colony 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 an exceptional quarter for the company, with an impressive beat of analysts' organic revenue growth estimates.

Hershey Total Revenue

The stock is down 6.2% since the results and currently trades at $183.75.

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.

Lamb Weston had the weakest performance against analyst estimates and weakest full-year guidance update in the group. The stock is down 18.2% since the results and currently trades at $82.68.

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

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, with an impressive beat of analysts' organic revenue growth estimates.

The stock is down 16.8% since the results and currently trades at $32.1.

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

Post (NYSE:POST)

Founded in 1895, Post (NYSE:POST) is a packaged food company known for its namesake breakfast cereal and healthier-for-you snacks.

Post reported revenues of $2.00 billion, up 23.4% year on year, falling short of analysts' expectations by 1.5%. It was a strong quarter for the company, with a decent beat of analysts' earnings estimates.

The stock is down 0.5% since the results and currently trades at $104.36.

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

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