Looking back on perishable food stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Fresh Del Monte Produce (NYSE:FDP) and its peers.
The perishable food industry is diverse, encompassing large-scale producers and distributors to specialty and artisanal brands. These companies sell produce, dairy products, meats, and baked goods and have become integral to serving modern American consumers who prioritize freshness, quality, and nutritional value. Investing in perishable food stocks presents both opportunities and challenges. While the perishable nature of products can introduce risks related to supply chain management and shelf life, it also creates a constant demand driven by the necessity for fresh food. Companies that can efficiently manage inventory, distribution, and quality control are well-positioned to thrive in this competitive market. Navigating the perishable food industry requires adherence to strict food safety standards, regulations, and labeling requirements.
The 11 perishable food stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 5.7%.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
Luckily, perishable food stocks have performed well with share prices up 10.8% on average since the latest earnings results.
Fresh Del Monte Produce (NYSE:FDP)
Translating to "of the mountain" in Spanish, Fresh Del Monte (NYSE:FDP) is a leader in providing high-quality, sustainably grown fresh fruits and vegetables.
Fresh Del Monte Produce reported revenues of $1.14 billion, down 3.5% year on year. This print fell short of analysts’ expectations by 3.5%, but it was still a strong quarter for the company with an impressive beat of analysts’ earnings and gross margin estimates.
"We are pleased to see our growth strategy and company focus yielding positive results, in the fresh and value-added products segment, where we achieved strong margin improvement during the second quarter of 2024. We see pineapple, fresh-cut fruit, avocados, and value-added products as core strengths—with consumers appreciating the innovation, convenience, and taste," said Fresh Del Monte Chairman and CEO Mohammad Abu-Ghazaleh.
Fresh Del Monte Produce Total Revenue
Fresh Del Monte Produce delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 18.6% since reporting and currently trades at $29.21.
Founded in 1983 in California, Mission Produce (NASDAQ:AVO) grows, packages, and distributes avocados.
Mission Produce reported revenues of $324 million, up 23.9% year on year, outperforming analysts’ expectations by 40.3%. The business had an incredible quarter with an impressive beat of analysts’ earnings and gross margin estimates.
Mission Produce Total Revenue
Mission Produce delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 19.4% since reporting. It currently trades at $12.78.
Known for brands such as Egg-Land’s Best and Land O’ Lakes, Cal-Maine (NASDAQ:CALM) produces, packages, and distributes eggs.
Cal-Maine reported revenues of $785.9 million, up 71.1% year on year, exceeding analysts’ expectations by 11.5%. Still, it was a slower quarter as it posted a miss of analysts’ earnings estimates.
As expected, the stock is down 1% since the results and currently trades at $76.10.
A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ:BYND) is a food company crafting innovative, sustainable, and delicious alternatives to traditional meat products.
Beyond Meat reported revenues of $93.19 million, down 8.8% year on year. This result topped analysts’ expectations by 5.4%. It was a very strong quarter as it also logged an impressive beat of analysts’ gross margin estimates and full-year revenue guidance exceeding analysts’ expectations.
Beyond Meat pulled off the highest full-year guidance raise among its peers. The stock is up 27.8% since reporting and currently trades at $6.71.
A trailblazer in the avocado industry, Calavo Growers (NASDAQ:CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.
Calavo reported revenues of $179.6 million, down 30.9% year on year. This print was in line with analysts’ expectations. More broadly, it was a mixed quarter as it also recorded an impressive beat of analysts’ earnings estimates but a miss of analysts’ gross margin estimates.
Calavo had the slowest revenue growth among its peers. The stock is up 16.8% since reporting and currently trades at $28.07.
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