As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at shelf-stable food stocks, starting with Utz (NYSE:UTZ).
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 18 shelf-stable food stocks we track reported a slower Q1. As a group, revenues missed analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 0.6% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.9% since the latest earnings results.
Utz (NYSE:UTZ)
Tracing its roots back to 1921 when Bill and Salie Utz began making potato chips in their kitchen, Utz Brands (NYSE:UTZ) offers salty snacks such as potato chips, tortilla chips, pretzels, cheese snacks, and ready-to-eat popcorn, among others.
Utz reported revenues of $352.1 million, up 1.6% year on year. This print exceeded analysts’ expectations by 0.6%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates.
“I’m pleased with our strong start to the year, as we delivered nearly 3% Organic Net Sales growth(1), and gained dollar and pound share of the Salty Snacks category in the first quarter(2). Our use of bonus packs and focused trade promotions have been effective in addressing consumer value needs. We’ve now shown our ability to grow despite category softness, due to our unique geographic expansion opportunity. In addition, we delivered our ninth consecutive quarter of year-over-year Adjusted EBITDA Margin expansion, and we drove Adjusted Earnings Per Share growth of over 14%,” said Howard Friedman, Chief Executive Officer of Utz.
Utz Total Revenue
Unsurprisingly, the stock is down 4.7% since reporting and currently trades at $12.68.
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 $1.52 billion, up 4.3% year on year, outperforming analysts’ expectations by 2.4%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ gross margin estimates.
Lamb Weston Total Revenue
Lamb Weston achieved the highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 4.3% since reporting. It currently trades at $51.83.
Started as a small grocery store in New York City, B&G Foods (NYSE:BGS) is an American packaged foods company with a diverse portfolio of more than 50 brands.
B&G Foods reported revenues of $425.4 million, down 10.5% year on year, falling short of analysts’ expectations by 6.8%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
B&G Foods delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 30.6% since the results and currently trades at $4.38.
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 $2.84 billion, down 6.3% year on year. This print lagged analysts' expectations by 2%. It was a softer quarter as it also recorded a significant miss of analysts’ EBITDA and gross margin estimates.
The stock is down 12.8% since reporting and currently trades at $23.00.
Best known for its portfolio of powerhouse breakfast cereal brands, General Mills (NYSE:GIS) is a packaged foods company that has also made a mark in cereals, baking products, and snacks.
General Mills reported revenues of $4.84 billion, down 5% year on year. This number missed analysts’ expectations by 2.4%. Overall, it was a slower quarter as it also logged a miss of analysts’ organic revenue estimates and EBITDA in line with analysts’ estimates.
The stock is down 10.5% since reporting and currently trades at $54.12.
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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