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Kraft Foods Group, Inc. (KRFT - Analyst Report) is set to report first-quarter fiscal 2014 results on May 1, after the market closes. Last quarter, the company posted 26.2% negative surprise. Let’s see how things are shaping up for this announcement.

Factors to Consider This Quarter

Kraft’s top-line has been soft ever since the split from Mondelez International Inc. (MDLZ - Analyst Report) in Oct 2012 due to broader macro pressures. Several of its product categories — salad dressings, powdered beverages and ready-to-eat desserts — have been soft for the past few quarters due to lower consumption and increased competition. Changes in consumer preferences, their shopping behavior and tough consumer spending environment are hurting retail sales.

Moreover, first-quarter earnings are expected to be soft due to the shift in Easter timing to the second quarter. Also, a weak holiday sell-through resulted in higher inventory with retailers that may not be willing to buy much in the first quarter. Moreover, rising cheese costs are expected to hurt profits in the to-be-reported quarter.

Additionally, the North American food industry is facing headwinds from a weak job market and recent cut in federal food assistance offered through the Supplemental Nutrition Assistance Program, formerly known as food stamps. The headwinds are likely to persist in 2014 as well.

Moreover, Kraft is still lagging many peers on the advertising and promotional spending front, which has been affecting its sales performance. Accordingly, the company is boosting advertising investments which, in turn, is putting pressure on margins.

Earnings Whisper?

Our proven model does not conclusively show that Kraft is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Negative Zacks ESP:  The Earnings ESP is -1.28%.

Zacks Rank: Kraftcarries a Zacks Rank #4 (Sell). We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Other food stocks that have both a positive Earnings ESP and a favorable Zacks Rank are:

General Mills, Inc. (GIS - Analyst Report) with Earnings ESP of +4.29% and a Zacks Rank #3 (Hold).

Treehouse Foods, Inc. (THS - Snapshot Report), with Earnings ESP of +1.25% and a Zacks Rank #2 (Buy).

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