Q4 Rundown: Conagra (NYSE:CAG) Vs Other Shelf-Stable Food Stocks
Wrapping up Q4 earnings, we look at the numbers and key takeaways for the shelf-stable food stocks, including Conagra (NYSE:CAG) 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 4 shelf-stable food stocks we track reported a slower Q4. As a group, revenues missed analysts’ consensus estimates by 0.7%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.5% since the latest earnings results.
Conagra (NYSE:CAG)
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 $3.20 billion, flat year on year. This print exceeded analysts’ expectations by 1.5%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ organic revenue estimates but full-year EPS guidance missing analysts’ expectations.
Sean Connolly, president and chief executive officer of Conagra Brands, commented, "Our business returned to growth in the second quarter despite a continued challenging consumer environment as our investments paid off, driving strong market share performance. While momentum remains strong, we expect the business to be impacted by two headwinds in the back half including higher than expected inflation and unfavorable foreign exchange rates, leading us to update our fiscal 2025 outlook."
Conagra Total Revenue
Unsurprisingly, the stock is down 2.8% since reporting and currently trades at $26.60.
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 $5.24 billion, up 2% year on year, outperforming analysts’ expectations by 1.9%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ gross margin estimates.
General Mills Total Revenue
General Mills achieved the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 7.4% since reporting. It currently trades at $61.
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 $1.60 billion, down 7.6% year on year, falling short of analysts’ expectations by 4.3%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Lamb Weston delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 22.1% since the results and currently trades at $60.89.
Best known for its Atkins brand that was inspired by the popular diet of the same name, Simply Good Foods (NASDAQ:SMPL) is a packaged food company whose offerings help customers achieve their healthy eating or weight loss goals.
Simply Good Foods reported revenues of $341.3 million, up 10.6% year on year. This number came in 1.7% below analysts' expectations. All in all, it was a mixed quarter for the company.
Simply Good Foods delivered the fastest revenue growth among its peers. The stock is down 1.6% since reporting and currently trades at $36.18.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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