Wrapping up Q2 earnings, we look at the numbers and key takeaways for the shelf-stable food stocks, 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 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 6.2% since the latest 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 from peanut butter and coffee to pet food.
J. M. Smucker reported revenues of $2.11 billion, flat year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ gross margin estimates.
"Our first quarter results exceeded our expectations and reflect the continued momentum of the business. Our teams demonstrated agility throughout the organization, and though the external environment continues to be dynamic we are successfully managing what we can control," said Mark Smucker, Chief Executive Officer and Chair of the Board.
Unsurprisingly, the stock is down 2.1% since reporting and currently trades at $108.01.
Is now the time to buy J. M. Smucker? Access our full analysis of the earnings results 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 a solid beat of analysts’ EBITDA and organic revenue estimates.
Hershey scored the fastest revenue growth among its peers. The market seems content with the results as the stock is up 1.5% since reporting. It currently trades at $189.28.
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.
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 $547.5 million, up 6.2% year on year. This result topped analysts’ expectations by 3%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ organic revenue estimates.
The stock is down 32.2% since reporting and currently trades at $36.40.
Read our full, actionable report on BellRing Brands here, it’s free.
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 $6.35 billion, down 1.9% year on year. This print surpassed analysts’ expectations by 1.2%. It was a strong quarter as it also produced a solid beat of analysts’ EBITDA and gross margin estimates.
The stock is down 7.6% since reporting and currently trades at $26.44.
Read our full, actionable report on Kraft Heinz here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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