Q2 Earnings Roundup: Lamb Weston (NYSE:LW) And The Rest Of The Shelf-Stable Food Segment
As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at shelf-stable food stocks, 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 Q2. As a group, revenues missed analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was 0.7% below.
Inflation progressed towards the Fed's 2% goal recently, leading the central bank to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive as of late, employment measures bordered on worrisome. The markets will be assessing whether this rate cut (and more potential ones in 2024 and 2025) are ideal timing to support the economy or a bit too late for a macro that has already cooled too much.
Weakest Q2: 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 $1.61 billion, down 4.9% year on year. This print fell short of analysts’ expectations by 5.5%. Overall, it was a disappointing quarter for the company with underwhelming earnings guidance for the full year and a miss of analysts’ organic revenue growth estimates.
“We are disappointed by our fourth quarter performance,” said Tom Werner, President and CEO.
Lamb Weston delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 16.4% since reporting and currently trades at $65.69.
Is now the time to buy Lamb Weston? Access our full analysis of the earnings results here, it’s free.
Best Q2: BellRing Brands (NYSE:BRBR)
Spun out of Post Holdings in 2019, Bellring Brands (NYSE:BRBR) offers protein shakes, nutrition bars, and other products under the PowerBar, Premier Protein, and Dymatize brands.
BellRing Brands reported revenues of $515.4 million, up 15.6% year on year, outperforming analysts’ expectations by 2%. The business had an exceptional quarter with an impressive beat of analysts’ gross margin and organic revenue growth estimates.
The market seems happy with the results as the stock is up 20.7% since reporting. It currently trades at $59.59.
Is now the time to buy BellRing Brands? Access our full analysis of the earnings results here, it’s free.
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 $2.07 billion, down 16.7% year on year, falling short of analysts’ expectations by 10.6%. It was a disappointing quarter as it posted a miss of analysts’ organic revenue growth and earnings estimates.
Hershey delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 1% since the results and currently trades at $199.34.
Read our full analysis of Hershey’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 $788.5 million, down 1.9% year on year. This print met analysts’ expectations. It was a very strong quarter as it also produced an impressive beat of analysts’ earnings and operating margin estimates.
The stock is up 10% since reporting and currently trades at $43.22.
Read our full, actionable report on TreeHouse Foods here, it’s free.
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 $418.8 million, down 6.5% year on year. This print was in line with analysts’ expectations. It was a very strong quarter as it also logged an impressive beat of analysts’ earnings and organic revenue growth estimates.
The stock is up 17.8% since reporting and currently trades at $8.06.
Read our full, actionable report on Hain Celestial here, it’s free.
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