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 Q3, starting with Lamb Weston (NYSE:LW).
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 Q3. As a group, revenues beat analysts’ consensus estimates by 0.9%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
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 $1.66 billion, flat year on year. This print exceeded analysts’ expectations by 2.6%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates.
“The Lamb Weston team delivered a strong start to the fiscal year with solid volume growth and positive customer momentum, underscoring the strength of our value proposition and our operating model,” said Mike Smith, Lamb Weston president and CEO.
Lamb Weston delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 7.5% since reporting and currently trades at $60.04.
Is now the time to buy Lamb Weston? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: J&J Snack Foods (NASDAQ:JJSF)
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 $410.2 million, down 3.9% year on year, in line with analysts’ expectations. The business had a very strong quarter with an impressive beat of analysts’ EBITDA and EPS estimates.
The market seems happy with the results as the stock is up 13.5% since reporting. It currently trades at $94.29.
Is now the time to buy J&J Snack Foods? Access our full analysis of the earnings results here, it’s free for active Edge members.
Slowest Q3: 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 $841.9 million, down 1.5% year on year, falling short of analysts’ expectations by 1%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and gross margin estimates.
Interestingly, the stock is up 25.1% since the results and currently trades at $23.84.
Read our full analysis of TreeHouse Foods’s results here.
Hormel Foods (NYSE:HRL)
Best known for its SPAM brand, Hormel (NYSE:HRL) is a packaged foods company with products that span meat, poultry, shelf-stable foods, and spreads.
Hormel Foods reported revenues of $3.19 billion, up 1.5% year on year. This print came in 2% below analysts' expectations. Aside from that, it was a satisfactory quarter as it also recorded a solid beat of analysts’ EBITDA estimates but a miss of analysts’ revenue estimates.
Hormel Foods had the weakest performance against analyst estimates among its peers. The stock is up 1.3% since reporting and currently trades at $23.74.
Read our full, actionable report on Hormel Foods here, it’s free for active Edge members.
SunOpta (NASDAQ:STKL)
Committed to clean-label foods, SunOpta (NASDAQ:STKL) is a sustainability-focused food and beverage company specializing in the sourcing, processing, and packaging of organic products.
SunOpta reported revenues of $205.4 million, up 16.6% year on year. This number topped analysts’ expectations by 5.2%. Overall, it was a very strong quarter as it also recorded a beat of analysts’ EPS estimates and full-year revenue guidance exceeding analysts’ expectations.
SunOpta achieved the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is down 26.8% since reporting and currently trades at $3.85.
Read our full, actionable report on SunOpta here, it’s free for active Edge members.
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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