Q3 Earnings Outperformers: Utz (NYSE:UTZ) And The Rest Of The Shelf-Stable Food Stocks
Let’s dig into the relative performance of Utz (NYSE:UTZ) and its peers as we unravel the now-completed Q3 shelf-stable food earnings season.
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. On average, they are relatively unchanged 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 $365.5 million, down 1.7% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.
"In the third quarter our momentum continued with solid Organic Net Sales growth, our seventh consecutive quarter of Adjusted EBITDA Margin expansion, and Adjusted Earnings Per Share growth of nearly 24%,” said Howard Friedman, Chief Executive Officer of Utz.
Utz Total Revenue
Interestingly, the stock is up 5.1% since reporting and currently trades at $17.03.
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 $1.65 billion, flat year on year, outperforming analysts’ expectations by 6.5%. The business had a strong quarter with an impressive beat of analysts’ organic revenue estimates and full-year revenue guidance slightly topping analysts’ expectations.
Lamb Weston Total Revenue
Lamb Weston delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 26.6% since reporting. It currently trades at $82.20.
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.
As expected, the stock is down 3.3% since the results and currently trades at $167.67.
With Corn Flakes as its first and most iconic product, Kellanova (NYSE:K) is a packaged foods company that is dominant in the cereal and snack categories.
Kellanova reported revenues of $3.23 billion, flat year on year. This print topped analysts’ expectations by 2.5%. More broadly, it was a satisfactory quarter as it also produced an impressive beat of analysts’ organic revenue estimates but a miss of analysts’ EBITDA estimates.
The stock is flat since reporting and currently trades at $80.63.
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 $461.1 million, down 8.3% year on year. This result missed analysts’ expectations by 2.2%. It was a softer quarter as it also recorded a significant miss of analysts’ EBITDA and EPS estimates.
B&G Foods had the slowest revenue growth among its peers. The stock is down 13.7% since reporting and currently trades at $7.62.
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 US 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. Said differently, there's still much uncertainty around 2025.
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