As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the shelf-stable food industry, including TreeHouse Foods (NYSE:THS) 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 those trading at higher multiples--had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts. Thankfully, shelf-stable food stocks have been resilient with share prices up 6.7% on average since the latest earnings results.
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 $788.5 million, down 1.9% year on year. This print was in line with analysts’ expectations, and overall, it was a very strong quarter for the company with an impressive beat of analysts’ earnings estimates.
"I'm pleased with our second quarter performance, which included sequentially improved net sales trends and profit that exceeded the upper-end of our guidance," said Steve Oakland, Chairman, Chief Executive Officer, and President.
Interestingly, the stock is up 6% since reporting and currently trades at $41.64.
Is now the time to buy TreeHouse Foods? Access our full analysis of the earnings results 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 18.9% since reporting. It currently trades at $58.68.
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 18.7% since the results and currently trades at $63.87.
Read our full analysis of Lamb Weston’s results here.
Simply Good Foods (NASDAQ:SMPL)
Best known for its Atkins brand that was inspired by the popular diet of the same name, Simply Good Foods (NASDAQ:SMPL) is a packaged food company whose offerings help customers achieve their healthy eating or weight loss goals.
Simply Good Foods reported revenues of $334.8 million, up 3.1% year on year. This print was in line with analysts’ expectations. It was a satisfactory quarter as it also put up a decent beat of analysts’ gross margin estimates.
The stock is down 7.7% since reporting and currently trades at $33.37.
Read our full, actionable report on Simply Good Foods here, it’s free.
Conagra (NYSE:CAG)
Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today (NYSE:CAG) boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.
Conagra reported revenues of $2.91 billion, down 2.3% year on year. This number was in line with analysts’ expectations. Aside from that, it was a very strong quarter as it logged a miss of analysts’ organic revenue growth estimates and underwhelming earnings guidance for the full year.
The stock is up 10.9% since reporting and currently trades at $31.94.
Read our full, actionable report on Conagra here, it’s free.
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