Let’s dig into the relative performance of Kellanova (NYSE: K) and its peers as we unravel the now-completed Q1 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 slower Q1. As a group, revenues missed analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 0.5% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.6% since the latest earnings results.
Kellanova (NYSE: K)
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 $3.08 billion, down 3.7% year on year. This print fell short of analysts’ expectations by 2%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $81.91.
Read our full report on Kellanova here, it’s free.
Best Q1: 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 $1.52 billion, up 4.3% year on year, outperforming analysts’ expectations by 2.4%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ gross margin estimates.
Lamb Weston scored the highest full-year guidance raise among its peers. The market seems content with the results as the stock is up 2% since reporting. It currently trades at $55.22.
Is now the time to buy Lamb Weston? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: B&G Foods (NYSE: BGS)
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 $425.4 million, down 10.5% year on year, falling short of analysts’ expectations by 6.8%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
B&G Foods delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 34.9% since the results and currently trades at $4.11.
Read our full analysis of B&G Foods’s results here.
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 $2.81 billion, down 13.8% year on year. This number met analysts’ expectations. Aside from that, it was a satisfactory quarter as it also logged a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ gross margin estimates.
Hershey had the slowest revenue growth among its peers. The stock is down 3.8% since reporting and currently trades at $160.91.
Read our full, actionable report on Hershey here, it’s free.
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 $359.7 million, up 15.2% year on year. This result topped analysts’ expectations by 1.6%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ EBITDA and gross margin estimates.
The stock is up 3% since reporting and currently trades at $34.19.
Read our full, actionable report on Simply Good Foods here, it’s free.
Market Update
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 thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), 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 potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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