Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at General Mills (NYSE: GIS) and its peers.
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 slower Q1. As a group, revenues missed analysts’ consensus estimates by 0.9% 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 7.9% since the latest earnings results.
General Mills (NYSE: GIS)
Best known for its portfolio of powerhouse breakfast cereal brands, General Mills (NYSE: GIS) is a packaged foods company that has also made a mark in cereals, baking products, and snacks.
General Mills reported revenues of $4.84 billion, down 5% year on year. This print fell short of analysts’ expectations by 2.4%. Overall, it was a slower quarter for the company with a miss of analysts’ organic revenue estimates and EBITDA in line with analysts’ estimates.
“Our third-quarter organic net sales finished below our expectations, driven largely by greater-than-expected retailer inventory headwinds and a slowdown in snacking categories,” said General Mills Chairman and Chief Executive Officer Jeff Harmening.
The stock is down 10.7% since reporting and currently trades at $53.99.
Read our full report on General Mills 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 1.2% since reporting. It currently trades at $54.80.
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 29.4% since the results and currently trades at $4.46.
Read our full analysis of B&G Foods’s results here.
Lancaster Colony (NASDAQ: LANC)
Known for its frozen garlic bread and Parkerhouse rolls, Lancaster Colony (NASDAQ: LANC) sells bread, dressing, and dips to the retail and food service channels.
Lancaster Colony reported revenues of $457.8 million, down 2.9% year on year. This number missed analysts’ expectations by 5.3%. It was a disappointing quarter as it also recorded a significant miss of analysts’ EBITDA estimates.
The stock is down 13.2% since reporting and currently trades at $167.40.
Read our full, actionable report on Lancaster Colony 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 beat analysts’ expectations by 1.6%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ EBITDA and gross margin estimates.
The stock is down 2.7% since reporting and currently trades at $32.32.
Read our full, actionable report on Simply Good Foods here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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