3 Food Companies Likely To Stand Out This Earnings Season
Zacks Investment Research | Oct 30, 2019 09:49PM ET
The quarterly results of food companies, this earnings season, are likely to reflect benefits from well-chalked pricing initiatives and product innovations. Also, acquisitions and divestitures have enabled many of these companies to refine their portfolio. Such endeavors are likely to have contributed to aggregate revenues in this space.
Players in the industry have also been adhering to prudent cost-saving initiatives, which include moves like streamlining operational structures as well as optimizing manufacturing capacity and supply networks. These are likely to get reflected in margins.
However, companies in the food industry might have faced headwinds like rising input costs. In this context, inflationary trends for supplies like grains, edible oils, vegetables, dairy items, eggs as well as animal feed among others are likely to have been a drag. Moreover, higher logistics, warehouse and packaging expenses are anticipated to have increased cost burden.
Moreover, as these firms operate in a highly competitive arena, they are required to invest heavily in promotional activities. Unfavorable product mix and adverse currency fluctuations are other threats that cannot be counted out.
These aspects make us somewhat apprehensive regarding the performance of food companies. that are housed within the broader Zacks Original post
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