Q3 Earnings Outperformers: Kraft Heinz (NASDAQ:KHC) And The Rest Of The Shelf-Stable Food Stocks

Wrapping up Q3 earnings, we look at the numbers and key takeaways for the shelf-stable food stocks, including Kraft Heinz (NASDAQ:KHC) 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 Q3. As a group, revenues beat analysts’ consensus estimates by 0.9%.

Luckily, shelf-stable food stocks have performed well with share prices up 107% on average since the latest 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 $6.24 billion, down 2.3% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ organic revenue estimates and a miss of analysts’ gross margin estimates.

Unsurprisingly, the stock is down 2.8% since reporting and currently trades at $24.74.

Read our full report on Kraft Heinz here, it’s free for active Edge members.

Best Q3: J&J Snack Foods (NASDAQ:JJSF)

Best known for its SuperPretzel soft pretzels and ICEE frozen drinks, J&J Snack Foods (NASDAQ:JJSF) produces a range of snacks and beverages and distributes them primarily to supermarket and food service customers.

J&J Snack Foods reported revenues of $410.2 million, down 3.9% year on year, in line with analysts’ expectations. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.

The market seems happy with the results as the stock is up 13.9% since reporting. It currently trades at $94.64.

Is now the time to buy J&J Snack Foods? Access our full analysis of the earnings results here, it’s free for active Edge members.

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 $841.9 million, down 1.5% year on year, falling short of analysts’ expectations by 1%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ gross margin estimates.

Interestingly, the stock is up 25.6% since the results and currently trades at $23.94.

Read our full analysis of TreeHouse Foods’s results here.

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 $1.66 billion, flat year on year. This result topped analysts’ expectations by 2.6%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.

Lamb Weston had the weakest full-year guidance update among its peers. The stock is up 6.5% since reporting and currently trades at $59.48.

Read our full, actionable report on Lamb Weston here, it’s free for active Edge members.

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 $2.63 billion, down 5.8% year on year. This print beat analysts’ expectations by 0.7%. It was a very strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ gross margin estimates.

The stock is down 2.9% since reporting and currently trades at $17.79.

Read our full, actionable report on Conagra here, it’s free for active Edge members.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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