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.
The Resilience of Packaged Food Stocks
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 Mixed Q3
As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 5.7% below. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.1% since the latest earnings results.
Mcormick (NYSE:MKC)
The classic red Heinz ketchup bottle’s competitor, McCormick (NYSE:MKC) sells food-flavoring products like condiments, spices, and seasoning mixes.
Revenues
McCormick reported revenues of $1.68 billion, flat year on year. This print exceeded analysts’ expectations by 0.8%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ EPS estimates.
CEO’s Statement
Brendan M. Foley, President and CEO, stated, ‘We are pleased with our year to date performance, which was in line with our expectations and reflects the success of our prioritized investments in the areas within our portfolio that we believe will drive the greatest value. This quarter we reached a meaningful milestone by delivering total global positive volume growth, reflecting improved trends across both segments, and we expect this momentum to continue into the fourth quarter.
In our Consumer segment, we delivered solid volume growth, despite a more challenging macro environment in China. In Flavor Solutions, we drove sequential volume improvement, as we delivered strong growth in Branded Foodservice.’
Stock Performance
The stock is down 8.3% since reporting and currently trades at $75.64.
BellRing Brands
Founded in 2019, BellRing Brands is a packaged food company known for its PowerBar, Premier Protein, and Dymatize brands.
Revenues
BellRing Brands reported revenues of $555.8 million, up 17.6% year on year. This number surpassed analysts’ expectations by 2%. Overall, it was a strong quarter as it also recorded full-year revenue guidance exceeding analysts’ expectations and an impressive beat of analysts’ gross margin estimates.
Stock Performance
The stock is up 3.5% since reporting and currently trades at $75.64.
Post (NYSE:POST)
Founded in 1895, Post (NYSE:POST) is a packaged food company known for its namesake breakfast cereal and healthier-for-you snacks.
Revenues
Post reported revenues of $2.01 billion, up 3.3% year on year. This result surpassed analysts’ expectations by 2.2%. It was a strong quarter as it also logged a solid beat of analysts’ EPS estimates and a decent beat of analysts’ adjusted operating income estimates.
Stock Performance
The stock is up 5.2% since reporting and currently trades at $113.48.
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 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.
Outlook for 2025
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.
Investing in Winners with Rock-Solid Fundamentals
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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Disclaimer
The information provided is for general informational purposes only and should not be considered as investment advice. Investing in the stock market involves risk, and it’s essential to do your own research before making any investment decisions.
