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 Campbell Soup (NYSE:CPB) and the rest of the shelf-stable food stocks fared in Q2.
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.
The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting 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 7.9% on average since the latest earnings results.
Campbell Soup (NYSE:CPB)
With its iconic canned soup as its cornerstone product, Campbell Soup (NASDAQ:CPB) is a packaged food company with an illustrious portfolio of brands.
Campbell Soup reported revenues of $2.29 billion, up 10.9% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a miss of analysts’ organic revenue growth estimates.
Unsurprisingly, the stock is down 1.5% since reporting and currently trades at $49.41.
Read our full report on Campbell Soup here, it’s free.
Best Q2: BellRing Brands (NYSE:BRBR)
Spun out of Post Holdings in 2019, Bellring Brands (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 22.3% since reporting. It currently trades at $60.39.
Is now the time to buy BellRing Brands? Access our full analysis of the earnings results here, it’s free.
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 18.4% since the results and currently trades at $64.11.
Read our full analysis of Lamb Weston’s results here.
Hormel Foods (NYSE:HRL)
Best known for its SPAM brand, Hormel (NYSE:HRL) is a packaged foods company with products that span meat, poultry, shelf-stable foods, and spreads.
Hormel Foods reported revenues of $2.90 billion, down 2.2% year on year. This result lagged analysts' expectations by 2.2%. It was a slower quarter as it also logged full-year revenue guidance missing analysts’ expectations.
The stock is down 6.2% since reporting and currently trades at $31.11.
Read our full, actionable report on Hormel Foods here, it’s free.
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 $4.85 billion, down 1.2% year on year. This print met analysts’ expectations. Zooming out, it was a mixed quarter as it also recorded an impressive beat of analysts’ organic revenue growth estimates but a miss of analysts’ gross margin estimates.
The stock is flat since reporting and currently trades at $73.99.
Read our full, actionable report on General Mills here, it’s free.
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