Reflecting On Shelf-Stable Food Stocks' Q2 Earnings: Kraft Heinz (NASDAQ:KHC)

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Kraft Heinz (NASDAQ:KHC) 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 20 shelf-stable food stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.

While some shelf-stable food stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.9% since the latest earnings results.

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 $6.35 billion, down 1.9% year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA and gross margin estimates.

“We are proud to play a vital role in families’ lives, and our commitment to delivering superior, affordable, and accessible products is unwavering,” said Carlos Abrams-Rivera, CEO of Kraft Heinz.

Unsurprisingly, the stock is down 5.8% since reporting and currently trades at $26.95.

Is now the time to buy Kraft Heinz? Access our full analysis of the earnings results here, it’s free.

Best Q2: 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 $2.61 billion, up 26% year on year, outperforming analysts’ expectations by 3.1%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA and organic revenue estimates.

Hershey achieved the fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $185.30.

Is now the time to buy Hershey? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Conagra (NYSE:CAG)

Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today (NYSE:CAG) boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.

Conagra reported revenues of $2.78 billion, down 4.3% year on year, falling short of analysts’ expectations by 1.7%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates.

Conagra delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 6.8% since the results and currently trades at $18.99.

Read our full analysis of Conagra’s results here.

Campbell's (NASDAQ:CPB)

With its iconic canned soup as its cornerstone product, Campbell's (NASDAQ:CPB) is a packaged food company with an illustrious portfolio of brands.

Campbell's reported revenues of $2.32 billion, up 1.2% year on year. This print was in line with analysts’ expectations. More broadly, it was a mixed quarter as it also produced a decent beat of analysts’ EBITDA estimates but full-year EPS guidance missing analysts’ expectations.

The stock is up 4% since reporting and currently trades at $32.71.

Read our full, actionable report on Campbell's here, it’s free.

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 $191.5 million, up 12.9% year on year. This result surpassed analysts’ expectations by 3.1%. Overall, it was a strong quarter as it also put up a beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.

SunOpta pulled off the highest full-year guidance raise among its peers. The stock is up 24.3% since reporting and currently trades at $6.44.

Read our full, actionable report on SunOpta here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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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