Looking back on shelf-stable food stocks' Q1 earnings, we examine this quarter's best and worst performers, 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 decent Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was 1.6% below consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts 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% on average since the previous 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 $2.21 billion, down 1.3% year on year, falling short of analysts' expectations by 1.7%. It was a decent quarter for the company, with an impressive beat of analysts' gross margin estimates but underwhelming earnings guidance for the full year.
The stock is down 0.4% since the results and currently trades at $109.85.
Is now the time to buy J. M. Smucker? 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 an exceptional quarter for the company, with an impressive beat of analysts' gross margin and organic revenue growth estimates.
The stock is down 5.7% since the results and currently trades at $184.76.
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' gross margin estimates.
Lamb Weston had the weakest performance against analyst estimates and weakest full-year guidance update in the group. The stock is down 18.9% since the results and currently trades at $82.
Read our full analysis of Lamb Weston's results here.
McCormick (NYSE:MKC)
The classic red Heinz ketchup bottle’s competitor, McCormick (NYSE:MKC) sells food-flavoring products like condiments, spices, and seasoning mixes.
McCormick reported revenues of $1.64 billion, down 1% year on year, in line with analysts' expectations. It was a solid quarter for the company, with a decent beat of analysts' organic revenue growth and earnings estimates.
The stock is up 2.1% since the results and currently trades at $69.09.
Read our full, actionable report on McCormick 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 5.3% since the results and currently trades at $5.34.
Read our full, actionable report on SunOpta here, it's free.
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