Vanguard Consumer Staples ETF

January’s higher-than-expected consumer price index generated worries that the Federal Reserve might start raising interest rates aggressively

The Conference Board LEI uses the level of new orders in the consumer goods and materials as an important constituent of the LEI.

As we’ve discussed, Walgreens Boots Alliance (WBA) reported its 1Q18 results on January 4. The company’s top line increased 7.9% YoY (year-over-year) to $30.74 billion.

Rite Aid (RAD) reported its 3Q17 results after the market closed on January 3. The company’s top line plunged 5.6% YoY (year-over-year) to $5.35 billion (excluding discontinued operations).

Manufacturers’ new orders for consumer goods and materials New orders for consumer goods and materials give investors an insight into the demand for goods and form an important constituent of the Conference Board LEI (Leading Economic Index). Changes to demand in the consumer goods sector impact the performance of FMCG (fast moving consumer goods) companies, which include large retailers such […]

The number of new orders for October increased from a downward revised September reading of 136,014 to 136,268.

According to the September manufacturing new orders report, the number of manufacturers’ new orders for consumer goods and materials continued to increase in September.

Consumer goods and materials The Conference Board LEI (Leading Economic Index) uses new orders for consumer goods and materials as an important constituent. New orders in any sector give an idea of demand trends. Increasing demand for goods increases production, wages, and the number of hours worked, which benefits the economy. This sector includes companies […]

Manufacturers’ new orders for consumer goods and materials New orders for the consumer goods and materials sectors, important leading indicators for any economy, are used for the Conference Board Leading Economic Index (or LEI). Investors in this sector need to observe changes in the number of new orders as they indicate future demand. An increase […]

2017 has been a tough year for Altria. The stock has fallen 5.8% since the beginning of 2017.

Due to high visibility in Altria Group’s (MO) earnings, we have opted for a forward PE (price-to-earnings) ratio for our analysis.

Manufacturers’ new orders are one of leading indicators in the Conference Board Leading Economic Index (or LEI).

American tobacco company Altria Group (MO) is scheduled to announce its 2Q17 earnings before the market opens on July 27, 2017. The company’s stock price has risen 3.6% since the announcement of its 1Q17 earnings.

Philip Morris International (PM) is set to announce its 2Q17 earnings before the market opens on July 20, 2017.

For 2017, Herbalife projects its revenue will rise 0.30%–3.3%, supported by a 2.0%–5.0% rise in volume.

Herbalife (HLF), a global nutrition and weight management company, has been having a strong run. HLF stock has risen about 19.0% YTD as of March 28, 2017.

Both beverage giants have recorded positive segment revenue, earnings, and cash flow, but PepsiCo has a better valuation than Coca-Cola.

Procter & Gamble (PG) has a great track record of rewarding investors with higher dividends, share buyback plans, and share exchanges.

Gorman says that the positive market sentiment has been driving consumption among consumers.

Analyst coverage As of January 17, 2017, of the 20 analysts covering Colgate-Palmolive (CL), three analysts, or 15%, had rated the stock as a “buy.” The stock was rated “hold” by 85% of the analysts. Analysts set the stock’s 12-month price target at $72.20 per share, with an upside potential of 8%. Consensus “hold” rating […]

In fiscal 1Q17, sales for WBA’s Retail Pharmacy USA division rose 1.4%. It was the only segment that reported sales growth.

The consumer staples sector saw positive results in 2016. The Consumer Staples Select Sector SPDR ETF rose 3.8% in the year. It’s returned nearly 8.2% in the last two years.

Clorox (CLX) reported a 60-basis-point fall in its gross margin in fiscal 1Q17, which ended on September 30, 2016.

Analysts expect revenue of $2.2 billion for Hormel Foods (HRL) in fiscal 3Q16—3% higher than revenue of $2.19 billion in fiscal 3Q15.

Analysts expect Hain Celestial’s revenue to be $769 million for fiscal 4Q16. This represents a rise of 10% compared to revenue of $698 million in fiscal 4Q15.

Hershey (HSY) reported its fiscal 2Q16 earnings on July 28, 2016. Adjusted EPS came in around $0.85 for 2Q16, a growth of 9% compared to $0.78 in 2Q15.

Mead Johnson Nutrition revised its net sales outlook. It now expects constant-dollar sales to fall 0%–2% year-over-year in 2016.

Analysts expect Hershey’s adjusted EPS to be $0.78, which is in line with 2Q15 EPS.

Analysts are expecting Ingredion’s (INGR) adjusted EPS for 2Q16 to be $1.65 compared to $1.53 in 2Q15. That’s an increase of 8%.

Analysts are expecting Ingredion’s (INGR) revenue to be $1.4 billion for fiscal 2Q16. That would be a slight fall of 1% compared to $1.5 billion in the 2Q15.

Danone will be acquiring WhiteWave Foods for $56.25 per share in an all-cash transaction. This makes WWAV’s total enterprise value ~$12.5 billion.

Analysts expect ConAgra’s adjusted EPS to be $0.52 in fiscal 4Q16—compared to 4Q15 EPS of $0.59. It represents a decline of 12%.

The Coca-Cola Company (KO) has a market cap of $192.8 billion. It fell by 1.2% to close at $44.79 per share on June 17, 2016.

Cal-Maine Foods (CALM) has a market cap of $2.1 billion. It rose by 2.7% to close at $41.19 per share on June 16, 2016.

Manufacturing growth as measured by the ISM (Institute for Supply Management) index ended lower for the fifth consecutive month at the end of February. However, it rose in March

Whole Foods Market (WFM) is likely to see a slowdown in its top line during fiscal 2016. The organic and natural foods retailer could register sales growth of 3%–5%, according to the company’s guidance.

Mead Johnson (MJN) believes 2016 will be a year of transition for the company. It plans to invest heavily in reshaping its portfolio and boosting investments in new channels in China.

In 2015, INGR made two strategic acquisitions—Penford Corporation and Kerr Concentrates—and both have expanded the company’s special ingredient offerings.

Archer Daniels Midland opened its new flavor creation, application, and customer service facility in Cranbury, New Jersey, to meet customers’ unique demands.

On March 30, a day after the company’s fiscal 1Q16 earnings release, McCormick announced a revised proposal to the board of Premier Foods of 65 pence in cash per Premier Foods share.

McCormick & Company (MKC) has a dividend yield of 1.6% as of March 30, 2016. Management has raised the dividend at an average annual rate of 9.2% over five years.

In fiscal 2016, McCormick’s operating income is estimated to rise 17%–20% from $548 million in fiscal 2015.

On March 23, 2016, General Mills reported its results for fiscal 3Q16, which ended on February 28, 2016. Earnings and sales declined YoY, and adjusted EPS fell by 7% to $0.65 compared to $0.70 in fiscal 3Q15.

Kroger (KR) predicted that its fiscal 2017 earnings will be $2.19–$2.28 per share—compared to consensus estimates of $2.23.

For fiscal 2016, Kroger reported total sales of $109.8 billion. It rose 1.3% from the previous year—the slowest sales growth since fiscal 2010.

As part of its “Drive for 10” initiative, Snyder’s-Lance focused on improving its operating margin. However, the operating margins for 4Q15 fell to 4.07%.

Pinnacle Foods (PF) expects the adjusted diluted EPS (earnings per share) to be $2.08–$2.13. It includes the benefit of the Boulder Brands acquisition.

In fiscal 1Q16, Campbell Soup’s (CPB) gross margin improved to 37.9% compared to 35.3% in fiscal 1Q15. It excluded items impacting comparability in fiscal 2016.

The Refrigerated Foods segment accounted for 51% of Hormel Foods’ total sales and 45% of its total segmental operating profit in fiscal 1Q16.

Whole Foods Market (WFM) has long reaped the benefits of changing customer preferences toward organic foods, with no real competition.

In this part of the series, we’ll conduct a SWOT (strength, weakness, opportunity, and threat) analysis for The Fresh Market (TFM).

ROE (return on equity) measures the net profits earned by equity shareholders as a percentage of equity capital invested.

Compared with other food retail chains, The Fresh Market’s performance in terms of profitability has been best-in-class.

Dr Pepper Snapple exceeded analysts’ sales and earnings estimates in the first three quarters of fiscal 2015.

Mead Johnson’s earnings release provided guidance for fiscal 2016. It expects its fiscal 2016 constant dollar sales to be in a range of 0%–2% above fiscal 2015.

In this section, we’ll look at Walgreens Boots Alliance’s (WBA) current strengths and weaknesses.

Walgreen Boots Alliance’s (WBA) common stock trades on the NASDAQ under the symbol “WBA.”

Rite Aid’s (RAD) acquisition would improve Walgreens Boots Alliance’s (WBA) physical reach across the United States, increasing its store count by over 50%.

On October 27, 2015, Walgreens Boots Alliance (WBA) announced its intention to acquire Rite Aid for a total enterprise value of approximately $17.2 billion.

WBA’s leverage increased as a result of the debt raised by Walgreens to finance the acquisition of Boots Alliance.

Walgreens Boots Alliance (WBA) and CVS Health (CVS) largely dominate the US drug store market.

Under its Retail Pharmacy International division, Walgreens Boots Alliance operates pharmacy-led health and beauty retail businesses in eight countries.

The Retail Pharmacy USA division is Walgreens Boots Alliance’s (WBA) largest revenue generator.

A National Bureau of Economic Research study has found that the evolution and growth of warehouse clubs have been the most significant influences on the retail sector over the last 15-20 years.

Consumer packaged goods companies’ are geographically diverse. They face stiff competition from other international and nationally advertised brands.

Dr Pepper Snapple’s still beverage portfolio consists of brands such as Snapple, Mott’s, Hawaiian Punch, Clamato, Rose’s, and Mr & Mrs T mixers.

Since its listing on the NASDAQ in 2013, Sprouts Farmers Market’s stock has registered heavy losses for its shareholders, falling by almost 40%.

Although Sprouts purchases from a large number of suppliers, the company is still dependent on these suppliers for a large part of their purchases.

Wal-Mart plans to have Cyber Week last from November 28 to December 4, 2015, with ~2,000 online deals per day.

Same-store sales growth came in at 1.5% in 3Q16 for Walmart US compared to 0.4% in 3Q15. Target’s (TGT) same-store sales grew 1.9% in 3Q16, driven by both higher traffic and transaction size.

Campbell Soup’s fiscal 4Q15 results were affected by a fall in sales volume and weaker profit margins. Sales fell by 9% to $1.7 billion in fiscal 4Q15.

On October 19, 2015, Coty announced that it had entered into a definitive agreement to acquire New York- and London-based digital marketing platform Beamly.

Bunge North America, the North American operating segment of Bunge Limited (BG), announced that it had acquired Whole Harvest Foods.

Bunge Limited (BG) reported earnings of $86 million and $0.51 per share in 2Q15. The results fell badly as per analyst’s estimates of $1.43.

The Skin and Body Care segment accounted for 17.6% of Coty’s total net revenue in fiscal 2015.

Mondelēz’s divestiture discussions for its Europe cheese and grocery category are reflective of a trend seen in consumer companies lately.

On September 29, 2015, Diamond Foods (DMND) reported its financial results for the fourth quarter and fiscal year ending July 31, 2015.

General Mills reported its 1Q16 earnings on September 22, 2015. Its stock had been following a rising trend this month but fell by 1.58% on September 18.

After a test run in October 2014, PepsiCo (PEP) has now extended its partnership with SodaStream (SODA) to expand in the home carbonation business. The share prices of SodaStream and PepsiCo rose by 6.4% and 0.6%, respectively, following the announcement on September 11.

PepsiCo’s strategy for its UK business involves continued investment in its core brands across snacks and beverages, including Walkers, Tropicana, Naked, Quaker, and Pepsi.

While Mondelēz has been upbeat on prospects for Emerging Markets, its growth has faced significant challenges lately. The higher US dollar has been a major headwind.

A $486.68 million company, Francesca’s Holdings is known for its collection of hand-selected merchandise. It projects an increase of 9%–12% net sales in 2Q15, compared with $95.011 million in sales in 1Q15.

The domestic sparkling bottled water segment volume increased by 17.9% to 338.8 million gallons in 2014.

Walmart’s store comps were up 1.5% year-over-year in 2Q16. In contrast, Target reported same-store sales growth of 2.4%.

The new company, Coca-Cola European Partners PLC (or CCEP), would be based in the United Kindgom with CCE, CCIP, and The Coca-Cola Company (KO) holding 48%, 34%, and 18% of shares, respectively.

The pace of wage gains for the retail sector has been slower than growth rates experienced in pre-recession times.

Americans are moving toward craft beer due to better taste, innovation, and brewing techniques. Its market share increased to 11% in 2014 from 7.8% in 2013.

Investing in technology and capital to reduce costs as much as possible, including labor costs, has become critical.

Nationwide walkouts appear to be gaining momentum, calling for action to increase the federal minimum wage that has remained stagnant since 2009.