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As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the shelf-stable food industry, including Hormel Foods (NYSE:HRL) 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 Q4. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.5% above.
While some shelf-stable food stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.4% since the latest earnings results.
Hormel Foods (NYSE:HRL)
Best known for its SPAM brand, Hormel (NYSE:HRL) is a packaged foods company with products that span meat, poultry, shelf-stable foods, and spreads.
Hormel Foods reported revenues of $2.99 billion, flat year on year. This print exceeded analysts’ expectations by 1.3%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EBITDA and gross margin estimates.
The stock is up 2.8% since reporting and currently trades at $29.54.
Read our full report on Hormel Foods here, it’s free.
Best Q4: Lancaster Colony (NASDAQ:LANC)
Known for its frozen garlic bread and Parkerhouse rolls, Lancaster Colony (NASDAQ:LANC) sells bread, dressing, and dips to the retail and food service channels.
Lancaster Colony reported revenues of $509.3 million, up 4.8% year on year, outperforming analysts’ expectations by 2.8%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates.
Lancaster Colony achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 7.8% since reporting. It currently trades at $179.52.
Is now the time to buy Lancaster Colony? Access our full analysis of the earnings results here, it’s free.