Kalkine Media lists 5 consumer stocks to watch after latest CPI data

By - Rupam Roy


  • General Mills, Inc. (NYSE: GIS) noted four per cent YoY growth in its Q2 FY23 net sales.
  • The Kraft Heinz Company (NASDAQ: KHC) would announce its Q3 FY22 earnings results on Wednesday, October 26.
  • The net sales of Dollar General Corporation (NYSE: DG) rose nine per cent YoY.

The US consumer sector has been widely discussed this year, with investors looking for insights into consumer spending behavior, amid a highly volatile trading scenario in the overall market. The consumer sector comprises some of the biggest companies by market cap as well as smaller companies.

Today, we have made a combined list of the consumer sector companies, which include General Mills, Inc. (NYSE: GIS), The Kraft Heinz Company (NASDAQ: KHC), ConAgra Brands, Inc. (NYSE: CAG), Designer Brands Inc. (NYSE: DBI), and Dollar General Corporation (NYSE: DG).

As the recent inflation data showed that inflation remained at a higher level despite restrictive measures taken by policymakers, some investors might keep a close watch on consumer stocks.

Meanwhile, the latest CPI data by the Bureau of Labor Statistics showed that the core inflation jumped to its highest level in four decades in September. However, the market noted significant gains just after the release of the hotter-than-anticipated inflation data last week.

The rally again continued on Monday, October 17, with consumer discretionary as the highest percentage gainer in the S&P 500 index. The corporate earnings showed that the lenders have benefited from the higher interest rates in the latest quarter.

Let's take a closer look at the performance, both financials, and stock movements, of these consumer companies, which might provide some insights into the health of US consumers:

General Mills, Inc. (NYSE: GIS)

The major consumer food company, General Mills holds a dividend yield of 2.78 per cent. The US$ 46.31 billion market cap consumer food manufacturer sells its products through retail stores.

The stock price of the Minnesota-based consumer staples firm soared nearly 16 per cent YTD, and about 27 per cent YoY. This month through October 18, the GIS stock added about two per cent.

The food company's stock touched its 52-week high of US$ 81.24 on September 22 this year, and during writing, its trading price was around three per cent down from that level.

General Mills reported its Q1 FY23 earnings results on September 21, showing a four per cent YoY growth in its net sales of US$ 4.7 billion, while its diluted EPS rose 32 per cent YoY to US$ 1.35 apiece.

The firm now expects its organic net sales to jump between six per cent and seven per cent, up from its prior guidance range of four per cent to five per cent. The consumer food manufacturing firm also declared a dividend at the prevailing rate of US$ 0.54 apiece on September 27, payable on November 1, 2022.

The Kraft Heinz Company (NASDAQ: KHC)

Another major US-based food company, Kraft Heinz's dividend yield was 4.48 per cent. The US$ 44.04 billion market cap company is a leading food and beverage firm in North America, and it is also among the leading food companies worldwide.

The food and beverage firm's stock traded flat through the running year, while declining around two per cent YoY. However, in the running month through Tuesday, October 18, the KHC price shot up nearly eight per cent. On the 28th of last month, it touched its 52-week low of US$ 32.73.

The food company said on October 4, that its earnings results for the third quarter would be released on Wednesday, October 26. Meanwhile, in Q2 FY22, The Kraft Heinz Company's net sales fell 0.9 per cent YoY to US$ 6.55 billion, while its net income jumped 1,136.4 per cent YoY to US$ 265 million.

ConAgra Brands, Inc. (NYSE: CAG)

The consumer foods and packaged goods holding firm, ConAgra Brands holds a dividend yield of 3.85 per cent. The US$ 16.61 billion market cap firm focuses on making and selling its products under many brand names through supermarkets, restaurants, etc.

The price of the food company's stock rose around one per cent YTD and four per cent YoY. In the running month through October 18, the CAG stock was up about six per cent.

ConAgra Brands' net sales for Q1 FY23 was US$ 2.90 billion, an increase of 9.5 per cent YoY, and its net loss totaled US$ 77.5 million, against an income of US$ 235.7 million in the year-ago period, the company said during its earnings release on October 6.

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Designer Brands Inc. (NYSE: DBI)

The shoe store and fashion accessories firm, Designer Brands holds a dividend yield of 1.35 per cent. The stock of the US$ 963.37 million market cap firm that sells designer and name brand shoes and other related products rose five per cent this year and 12 per cent on a YoY basis.

Designer Brands' net sales rose 5.1 per cent YoY to US$ 859.3 million in Q2 FY22. Its net income was US$ 46.21 million, compared to US$ 42.86 million in Q2 FY21.

Dollar General Corporation (NYSE: DG)

Dollar General is a discount variety store operator with a dividend yield of 0.93 per cent. The firm provides products from popular brands at low everyday prices through its variety of stores as well as online. Its stock rose about one per cent YTD and 11 per cent YoY.

Dollar General Corporation holds a market cap of US$ 53.44 billion, and its Q2 FY22 net sales were US$ 9.4 billion, up nine per cent YoY, while its diluted EPS rose 10.8 per cent YoY to US$ 2.98 apiece.

Bottom line:

The third quarter earnings season would play a crucial role in the future trading of the broader market. The investors, who were struggling from the higher rates and still-elevated costs, would now keep a close track of the corporate earnings, for cues on the consumer as well as the businesses' behavior.

In addition to that, the latest hotter-than-expected economic data also cemented bets that the central bank would consider another big increase in the policy rates at their meeting next month.

Notably, Bank of America Corporation (NYSE: BAC) reported its latest quarterly earnings results on Monday, following which its stock closed at around six per cent higher on October 17. The bank's CEO, Brian Moynihan said recently that the US consumers are still in good financial condition, which might have also helped boost some confidence of the traders.

However, the performance of the consumer sector remained gloomy amid several economic challenges hovering over the market. The S&P 500 consumer discretionary sector fell around 26 per cent YoY and 31 per cent YTD, while the consumer staples sector declined three per cent YoY and about 11 per cent YTD.