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 Simply Good Foods (NASDAQ:SMPL) and the rest of the shelf-stable food stocks fared in Q3.
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 Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 5.7% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
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 $375.7 million, up 17.2% year on year. This print exceeded analysts’ expectations by 0.6%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates.
"In fiscal 2024, the Simply Good Foods team delivered on our strategic initiatives driving solid retail takeaway gains that resulted in full year volume driven legacy(5) net sales growth of about 5% and an increase of Adjusted EBITDA of nearly 10%," said Geoff Tanner, President and Chief Executive Officer of the Company.
Interestingly, the stock is up 23.7% since reporting and currently trades at $39.88.
Is now the time to buy Simply Good Foods? Access our full analysis of the earnings results here, it’s free.
Best Q3: 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 $555.8 million, up 17.6% year on year, outperforming analysts’ expectations by 2%. The business had a strong quarter with full-year revenue guidance exceeding analysts’ expectations and an impressive beat of analysts’ gross margin estimates.
BellRing Brands delivered the fastest revenue growth and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 7.2% since reporting. It currently trades at $78.74.
Is now the time to buy BellRing Brands? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: J&J Snack Foods (NASDAQ:JJSF)
Best known for its SuperPretzel soft pretzels and ICEE frozen drinks, J&J Snack Foods (NASDAQ:JJSF) produces a range of snacks and beverages and distributes them primarily to supermarket and food service customers.
J&J Snack Foods reported revenues of $426.8 million, down 3.9% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and gross margin estimates.
As expected, the stock is down 2.7% since the results and currently trades at $168.62.
Read our full analysis of J&J Snack Foods’s results here.
Mondelez (NASDAQ:MDLZ)
Founded as Nabisco in 1903, Mondelez (NASDAQ:MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.
Mondelez reported revenues of $9.20 billion, up 4% year on year. This result surpassed analysts’ expectations by 0.9%. Overall, it was a strong quarter as it also put up a solid beat of analysts’ EBITDA estimates.
The stock is down 11.4% since reporting and currently trades at $61.29.
Read our full, actionable report on Mondelez here, it’s free.
Kellanova (NYSE:K)
With Corn Flakes as its first and most iconic product, Kellanova (NYSE:K) is a packaged foods company that is dominant in the cereal and snack categories.
Kellanova reported revenues of $3.23 billion, flat year on year. This number topped analysts’ expectations by 2.5%. Aside from that, it was a satisfactory quarter as it also produced an impressive beat of analysts’ organic revenue estimates.
The stock is flat since reporting and currently trades at $80.31.
Read our full, actionable report on Kellanova here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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