The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how SunOpta (NASDAQ: STKL) and the rest of the shelf-stable food stocks fared in Q1.
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 18 shelf-stable food stocks we track reported a slower Q1. As a group, revenues missed analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 0.5% above.
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.
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 $201.6 million, up 9.3% year on year. This print exceeded analysts’ expectations by 3.7%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
"First quarter results exceeded our expectations, and we again delivered double-digit volume growth driven by broad-based gains across segments, products and customers,” said Brian Kocher, Chief Executive Officer of SunOpta.
SunOpta pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 45.6% since reporting and currently trades at $6.61.
Is now the time to buy SunOpta? Access our full analysis of the earnings results 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 achieved the highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.2% since reporting. It currently trades at $53.49.
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 29.5% since the results and currently trades at $4.45.
Read our full analysis of B&G Foods’s results here.
McCormick (NYSE: MKC)
The classic red Heinz ketchup bottle’s competitor, McCormick (NYSE: MKC) sells food-flavoring products like condiments, spices, and seasoning mixes.
McCormick reported revenues of $1.61 billion, flat year on year. This number lagged analysts' expectations by 0.6%. Overall, it was a slower quarter as it also produced a miss of analysts’ EBITDA and EPS estimates.
The stock is down 6.2% since reporting and currently trades at $75.30.
Read our full, actionable report on McCormick here, it’s free.
Kraft Heinz (NASDAQ: KHC)
The result of a 2015 mega-merger between Kraft and Heinz, Kraft Heinz (NASDAQ: KHC) is a packaged foods giant whose products span coffee to cheese to packaged meat.
Kraft Heinz reported revenues of $6.00 billion, down 6.4% year on year. This result was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it also recorded a narrow beat of analysts’ EBITDA estimates but full-year EPS guidance missing analysts’ expectations.
The stock is down 3.7% since reporting and currently trades at $27.73.
Read our full, actionable report on Kraft Heinz 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.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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