The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how shelf-stable food stocks fared in Q2, starting with Simply Good Foods (NASDAQ: SMPL).
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 Q2. As a group, revenues beat analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was in line.
While some shelf-stable food stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.9% since the latest earnings results.
Simply Good Foods (NASDAQ: SMPL)
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 $381 million, up 13.8% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a decent beat of analysts’ EBITDA estimates.
“I am pleased with the continued momentum on our business, with net sales up 14% highlighted by approximately 4% organic net sales growth. Consumption increased double-digits again for both Quest and OWYN which, in aggregate, represent about 70% of net sales today, while Atkins remained under pressure, as expected," said Geoff Tanner, President and Chief Executive Officer of Simply Good Foods.
Unsurprisingly, the stock is down 16.9% since reporting and currently trades at $26.88.
Is now the time to buy Simply Good Foods? Access our full analysis of the earnings results here, it’s free.
Best Q2: Hershey (NYSE: HSY)
Best known for its milk chocolate bar and Hershey's Kisses, Hershey (NYSE: HSY) is an iconic company known for its chocolate products.
Hershey reported revenues of $2.61 billion, up 26% year on year, outperforming analysts’ expectations by 3.1%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA and organic revenue estimates.
Hershey delivered the fastest revenue growth among its peers. The market seems content with the results as the stock is up 1.6% since reporting. It currently trades at $189.39.
Is now the time to buy Hershey? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Hain Celestial (NASDAQ: HAIN)
Sold in over 75 countries around the world, Hain Celestial (NASDAQ: HAIN) is a natural and organic food company whose products range from snacks to teas to baby food.
Hain Celestial reported revenues of $363.3 million, down 13.2% year on year, falling short of analysts’ expectations by 2.3%. It was a disappointing quarter as it posted a significant miss of analysts’ organic revenue and adjusted operating income estimates.
Hain Celestial delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 31% since the results and currently trades at $1.49.
Read our full analysis of Hain Celestial’s results here.
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 $801.4 million, up 1.6% year on year. This print beat analysts’ expectations by 1.7%. Overall, it was a strong quarter as it also logged a beat of analysts’ EPS and EBITDA estimates.
The stock is down 14.2% since reporting and currently trades at $17.65.
Read our full, actionable report on TreeHouse Foods here, it’s free.
Lamb Weston (NYSE: LW)
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 $1.68 billion, up 4% year on year. This result topped analysts’ expectations by 5.7%. It was a very strong quarter as it also produced a solid beat of analysts’ EBITDA and organic revenue estimates.
Lamb Weston pulled off the biggest analyst estimates beat among its peers. The stock is up 16% since reporting and currently trades at $56.99.
Read our full, actionable report on Lamb Weston here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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