Q3 Earnings Outperformers: TreeHouse Foods (NYSE:THS) And The Rest Of The Shelf-Stable Food Stocks
As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the shelf-stable food industry, including TreeHouse Foods (NYSE:THS) 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 20 shelf-stable food stocks we track reported a mixed Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 5.7% below.
In light of this news, share prices of the companies have held steady as they are up 1.2% on average since the latest earnings results.
TreeHouse Foods (NYSE:THS)
Whether it be packaged crackers, broths, or beverages, Treehouse Foods (NYSE:THS) produces a wide range of private-label foods for grocery and food service customers.
TreeHouse Foods reported revenues of $854.4 million, down 1% year on year. This print fell short of analysts’ expectations by 2.9%. Overall, it was a softer quarter for the company with a significant miss of analysts’ organic revenue and gross margin estimates.
"Our third quarter results were mixed, as a tough operating environment with softer consumer takeaway led to sales below our expectations. However, I was pleased with our supply chain savings, which led to margin improvement and profit that was within our guidance range," said Steve Oakland, Chairman, Chief Executive Officer, and President.
TreeHouse Foods Total Revenue
TreeHouse Foods delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 9.8% since reporting and currently trades at $33.53.
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 $555.8 million, up 17.6% year on year, outperforming analysts’ expectations by 2%. The business had a strong quarter with full-year revenue guidance exceeding analysts’ expectations and an impressive beat of analysts’ gross margin estimates.
BellRing Brands Total Revenue
BellRing Brands achieved the fastest revenue growth and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 6.2% since reporting. It currently trades at $78.
Best known for its SuperPretzel soft pretzels and ICEE frozen drinks, J&J Snack Foods (NASDAQ:JJSF) produces a range of snacks and beverages and distributes them primarily to supermarket and food service customers.
J&J Snack Foods reported revenues of $426.8 million, down 3.9% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and gross margin estimates.
The stock is flat since the results and currently trades at $172.19.
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 $4.85 billion, down 1.2% year on year. This result topped analysts’ expectations by 1%. Zooming out, it was a satisfactory quarter as it also logged a decent beat of analysts’ organic revenue estimates but a slight miss of analysts’ gross margin estimates.
The stock is down 10.8% since reporting and currently trades at $66.45.
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 $6.38 billion, down 2.8% year on year. This result came in 0.6% below analysts' expectations. More broadly, it was a mixed quarter as it also produced full-year EPS guidance slightly topping analysts’ expectations but a slight miss of analysts’ EBITDA estimates.
The stock is down 9.3% since reporting and currently trades at $31.58.
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.
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