As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the shelf-stable food industry, including Conagra (NYSE: CAG) 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 beat analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.8% since the latest earnings results.
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 $2.78 billion, down 4.3% year on year. This print fell short of analysts’ expectations by 1.7%. Overall, it was a disappointing quarter for the company with full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ EBITDA estimates.
Unsurprisingly, the stock is down 9.7% since reporting and currently trades at $18.38.
Read our full report on Conagra here, it’s free.
Best Q2: 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 $2.61 billion, up 26% year on year, outperforming analysts’ expectations by 3.1%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA and organic revenue estimates.
Hershey delivered the fastest revenue growth among its peers. The market seems content with the results as the stock is up 3.2% since reporting. It currently trades at $192.34.
Is now the time to buy Hershey? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Hain Celestial (NASDAQ: HAIN)
Sold in over 75 countries around the world, Hain Celestial (NASDAQ: HAIN) is a natural and organic food company whose products range from snacks to teas to baby food.
Hain Celestial reported revenues of $363.3 million, down 13.2% year on year, falling short of analysts’ expectations by 2.3%. It was a disappointing quarter as it posted a significant miss of analysts’ organic revenue and adjusted operating income estimates.
Hain Celestial delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 22.7% since the results and currently trades at $1.67.
Read our full analysis of Hain Celestial’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 $381 million, up 13.8% year on year. This number was in line with analysts’ expectations. Overall, it was a satisfactory quarter as it also put up a decent beat of analysts’ EBITDA estimates.
The stock is down 18.3% since reporting and currently trades at $26.45.
Read our full, actionable report on Simply Good Foods here, it’s free.
The Marzetti Company (NASDAQ: MZTI)
Known for its frozen garlic bread and Parkerhouse rolls, The Marzetti Company (NASDAQ: MZTI) sells bread, dressing, and dips to the retail and food service channels.
The Marzetti Company reported revenues of $475.4 million, up 5% year on year. This result topped analysts’ expectations by 4.1%. Taking a step back, it was a satisfactory quarter as it also logged a decent beat of analysts’ EBITDA estimates.
The stock is flat since reporting and currently trades at $177.
Read our full, actionable report on The Marzetti Company here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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