Let’s dig into the relative performance of McCormick (NYSE: MKC) and its peers as we unravel the now-completed Q1 shelf-stable food earnings season.
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.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.2% since the latest earnings results.
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 print fell short of analysts’ expectations by 0.6%. Overall, it was a slower quarter for the company with a miss of analysts’ EBITDA and EPS estimates.
Brendan M. Foley, Chairman, President, and CEO, stated, "We are pleased to start the year with solid first quarter results that are in line with our expectations, as we are managing a dynamic environment. Our continued volume-driven performance reflects the success of our prioritized investments in the areas that are driving the greatest value and will sustain our momentum for the remainder of 2025 and beyond. We achieved share gains in core categories across key markets and delivered volume growth in both the Consumer and Flavor Solutions segments.
The stock is down 10.6% since reporting and currently trades at $71.80.
Read our full report on McCormick 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 an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ gross margin estimates.
Lamb Weston pulled off 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 1.7% since reporting. It currently trades at $53.20.
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 34.4% since the results and currently trades at $4.14.
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 lagged 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 12.9% since reporting and currently trades at $168.07.
Read our full, actionable report on Lancaster Colony here, it’s free.
TreeHouse Foods (NYSE: THS)
Whether it be packaged crackers, broths, or beverages, Treehouse Foods (NYSE: THS) produces a wide range of private-label foods for grocery and food service customers.
TreeHouse Foods reported revenues of $792 million, down 3.6% year on year. This result was in line with analysts’ expectations. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is down 2.4% since reporting and currently trades at $22.85.
Read our full, actionable report on TreeHouse 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.
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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