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Food Stocks' Earnings Roster for May 11: DAR, ARMK, BGS, VITL

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Stay-at-home and work-from-home trends amid the pandemic have been an upside for several players in the food space. In fact, companies offering packaged food and snacks, ready to cook meals, spices and condiments, meat-based food offerings as well as bakery items benefited from consumers’ at-home dining and cooking practices. Though the food companies continue to witness strong sales trends, the top line growth witnessed in the first-quarter of 2021 are likely to have moderated compared to the prior-year quarter due to the cycling of the pantry loading activity of March 2020 owing to the onset of the pandemic.

Players in the food space have also been benefitting from rising demand for good-for-you’ food options, since there has been a heightened focus on boosting immunity and well-being amid the pandemic. Companies are also gaining from sturdy growth in e-commerce platforms. To continue building on the digital sales momentum, companies in the food space have been investing toward boosting omni channel and fulfillment centre capabilities. Additionally, several food companies have remained dedicated toward enhancing portfolio through innovation, acquisitions and other brand-building efforts, to meet consumers’ changing tastes and preferences.

However, foodservice businesses of many players have been affected by soft away-from-home demand due to social-distancing trends induced by the pandemic. Lower consumer traffic and other restrictions have been adversely impacting demand conditions at restaurants, schools and lodging. Nevertheless, with COVID-19 vaccines being rolled out at large, people are gradually returning to the pre-pandemic lifestyle and opening up to outdoor dining.

Moreover, some of the food companies have been facing disruptions in the supply-chain network amid the crisis. Some companies are witnessing margin pressure from coronavirus-driven costs. Nonetheless, some players in the industry have been focusing on cost-containment initiatives.

All said, let’s take a closer look at four food stocks from the Zacks Consumer Staples sector that are slated to report financial results on May 11. Per the latest Earnings Preview, the total earnings of the Consumer Staples sector are projected to witness year-over-year growth of 12.1% on 5.7% higher revenues.

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Here’s How Darling Ingredients is Placed

Darling Ingredients Inc. DAR is gaining from improved pricing cycle in its global ingredients platform. Also, the company’s feed segment has been gaining from higher raw material volumes and better prices for both proteins and fats. Acquisitions have also played an important role in boosting the company’s brand portfolio. These upsides are likely to have continued supporting the company’s performance during first-quarter 2021.

Notably, the Zacks Consensus Estimate for revenues is pegged at $1,015 million, suggesting 19% growth from the year-ago quarter's reported figure. For quarterly earnings, the Zacks Consensus Estimate is pegged at 57 cents per share, reflecting growth of 11.8% from the prior-year quarter’s reported figure. Notably, the consensus mark has increased by a penny in the past 30 days. The company has a trailing four-quarter earnings surprise of 20.7%, on average.

Our proven model predicts an earnings beat for Darling Ingredients this season. The company has a Zacks Rank #2 and an Earnings ESP of +16.47%.

Darling Ingredients Inc. Price, Consensus and EPS Surprise

Darling Ingredients Inc. Price, Consensus and EPS Surprise
Darling Ingredients Inc. Price, Consensus and EPS Surprise

Darling Ingredients Inc. price-consensus-eps-surprise-chart | Darling Ingredients Inc. Quote

What’s in the Offing for Aramark?

Aramark’s ARMK business operations during second-quarter fiscal 2021 are likely to have been adversely impacted by the pandemic-led higher operating costs. Nevertheless, the company is focused on implementing a disciplined cost structure, which is likely to have offered some cushion. Further, the company’s efforts to enhance client base alongside driving innovations are likely to have served as upsides.

The Zacks Consensus Estimate for revenues is currently pegged at $2,817 million, reflecting a decline of 24.4%. The consensus mark for the bottom line is currently pegged at a loss of 35 cents per share compared with earnings of 25 cents reported in the prior-year quarter. The company has a trailing four-quarter earnings surprise of 2.4%, on average.

Our proven model does not conclusively predict an earnings beat for Aramark this season. The company has a Zacks Rank #3 and an Earnings ESP of 0.00%.

Aramark Price and Consensus

Aramark Price and Consensus
Aramark Price and Consensus

Aramark price-consensus-chart | Aramark Quote

Factors Likely to Impact Vital Farms

Vital Farms, Inc. VITL is gaining from volume increases to distributors and retail partners, backed by favorable demand trends. The company is witnessing rising sales of egg and butter. Such factors along with efforts to strengthen capacity and marketing are likely to have continued to support the company’s performance during first-quarter 2021. Higher operating expenses, stemming from increased labor costs, are likely to have been a headwind for the company in the to-be reported quarter. Also pressures from higher selling, general and administrative expenses remains a worry. The Zacks Consensus Estimate for revenues is currently pegged at $55.5 million. The consensus mark for the bottom line is currently pegged at a loss of a penny.

Our proven model does not conclusively predict an earnings beat for Vital Farms this season. The company has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.

Vital Farms, Inc. Price, Consensus and EPS Surprise

Vital Farms, Inc. Price, Consensus and EPS Surprise
Vital Farms, Inc. Price, Consensus and EPS Surprise

Vital Farms, Inc. price-consensus-eps-surprise-chart | Vital Farms, Inc. Quote

What’s in the Cards for B&G Foods?

B&G Foods, Inc. BGS first-quarter 2021 performance is likely to have gained from rising demand led by higher at-home consumption practices amid the pandemic. In this context, the company has been gaining from strong demand from mass merchants, warehouse clubs, supermarkets and wholesalers. However, the top line is likely to have witnessed tough year over year comparison in the first quarter of 2021 due to excessive pantry loading at the onset of the pandemic in the prior-year quarter. Nonetheless, sturdy e-commerce sales as well as gains from acquisition are likely to have driven the company’s performance during the quarter in review.

The Zacks Consensus Estimate for revenues is pegged at $517.7 million, suggesting an increase of 15.2% from the prior-year quarter’s reported figure. The consensus mark for earnings is pegged at 55 cents per share, which has remained stable in the past 30 days. Further, this indicates a jump of 19.6% from the figure reported in the prior-year quarter. The company has a trailing four-quarter earnings surprise of 4.2%, on average.

Our proven model does not conclusively predict an earnings beat for B&G Foods this season. The company sports a Zacks Rank #2 and an Earnings ESP of 0.00%. (Read More: B&G Foods (BGS) to Post Q1 Earnings: What Awaits the Stock?)

B&G Foods, Inc. Price, Consensus and EPS Surprise

B&G Foods, Inc. Price, Consensus and EPS Surprise
B&G Foods, Inc. Price, Consensus and EPS Surprise

B&G Foods, Inc. price-consensus-eps-surprise-chart | B&G Foods, Inc. Quote

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Darling Ingredients Inc. (DAR): Free Stock Analysis Report

B&G Foods, Inc. (BGS): Free Stock Analysis Report

Aramark (ARMK) : Free Stock Analysis Report

Vital Farms, Inc. (VITL) : Free Stock Analysis Report

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