Wrapping up Q2 earnings, we look at the numbers and key takeaways for the shelf-stable food stocks, including Hain Celestial (NASDAQ: HAIN) 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.
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. This print fell short of analysts’ expectations by 2.3%. Overall, it was a disappointing quarter for the company with 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 of the whole group. Unsurprisingly, the stock is down 33.2% since reporting and currently trades at $1.44.
Read our full report on Hain Celestial 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 achieved the fastest revenue growth among its peers. The market seems content with the results as the stock is up 2.5% since reporting. It currently trades at $191.06.
Is now the time to buy Hershey? Access our full analysis of the earnings results 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 $2.78 billion, down 4.3% year on year, falling short of analysts’ expectations by 1.7%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations.
As expected, the stock is down 7% since the results and currently trades at $18.94.
Read our full analysis of Conagra’s results here.
Campbell's (NASDAQ: CPB)
With its iconic canned soup as its cornerstone product, Campbell's (NASDAQ: CPB) is a packaged food company with an illustrious portfolio of brands.
Campbell's reported revenues of $2.32 billion, up 1.2% year on year. This result met analysts’ expectations. More broadly, it was a mixed quarter as it also recorded a decent beat of analysts’ EBITDA estimates but full-year EPS guidance missing analysts’ expectations.
The stock is up 4.7% since reporting and currently trades at $32.91.
Read our full, actionable report on Campbell's here, it’s free.
Mondelez (NASDAQ: MDLZ)
Founded as Nabisco in 1903, Mondelez (NASDAQ: MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.
Mondelez reported revenues of $8.98 billion, up 7.7% year on year. This print topped analysts’ expectations by 1.5%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates.
The stock is down 9.7% since reporting and currently trades at $62.96.
Read our full, actionable report on Mondelez here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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