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Will Kellogg's Pringles LOUD Help Revive Snack Business?
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Pringles, one of the major brands of Kellogg Company (K - Free Report) , recently introduced Pringles LOUD – a corn grain & veggie-based crisps.
The crisps come in five different varieties – fiery chili lime, mighty margherita pizza, salsa fiesta, spicy queso and super cheesy Italian. Management believes that consumers who enjoy “a little food adventure are sure to love the LOUD crunch and flavor."
In Jun 2012, Kellogg acquired Procter & Gamble’s snack unit, Pringles, which is now its second-largest brand. Pringles has been doing well in spite of the deterioration in the U.S. snacks business since 2013 due to weak volumes. However, there was a slight improvement in the snacks business in the third quarter of 2016. The upside was driven by a return to growth in core brands, such as the “Big 3” in crackers (Cheez-It, Club, and Town House); Rice Krispies Treats and Pringles.
The wholesome snacks business has mostly remained weak over the past few quarters due to lost distribution, including the effect of the underperformance of certain prior innovations. Though management is working to revive the business through investments in innovation and better in-store execution, the efforts are yet to bear significant results.
The company’s shares have been lagging the broader Zacks categorized Food-Miscellaneous/Diversified industry in the last one-year period. The stock has gained only 0.8% in the last one year, compared with the 10% rally of the broader food market. Estimates for this Zacks Rank #4 (Sell) company have moved down slightly for the current quarter, next quarter and next year over the last 60 days.
That said, Kellogg boasts a legacy of over 100 years built on solid product portfolio and brand identity in both cereals and snacks. Amid tepid sales growth, the company is making aggressive efforts to improve its product line. It is channeling funds toward product and packaging innovation as well as reformulation of many existing products to meet the rapidly changing taste of consumers regarding health and wellness.
Stock to Consider
Better-ranked stocks in the industry include B&G Foods, Inc. (BGS - Free Report) , Conagra Brands, Inc. (CAG - Free Report) and J&J Snack Foods Corp. (JJSF - Free Report) .
Full-year 2016 earnings for B&G Foods are expected to grow 42.2%.
Conagra – a Zacks Rank #2 (Buy) company – beat estimates in all the trailing four quarters with an average beat of 13.3%.
J&J Snack Foods, also a Zacks Rank #2 stock, are expected to witness 5.8% growth in fiscal 2017 earnings.
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Will Kellogg's Pringles LOUD Help Revive Snack Business?
Pringles, one of the major brands of Kellogg Company (K - Free Report) , recently introduced Pringles LOUD – a corn grain & veggie-based crisps.
The crisps come in five different varieties – fiery chili lime, mighty margherita pizza, salsa fiesta, spicy queso and super cheesy Italian. Management believes that consumers who enjoy “a little food adventure are sure to love the LOUD crunch and flavor."
In Jun 2012, Kellogg acquired Procter & Gamble’s snack unit, Pringles, which is now its second-largest brand. Pringles has been doing well in spite of the deterioration in the U.S. snacks business since 2013 due to weak volumes. However, there was a slight improvement in the snacks business in the third quarter of 2016. The upside was driven by a return to growth in core brands, such as the “Big 3” in crackers (Cheez-It, Club, and Town House); Rice Krispies Treats and Pringles.
The wholesome snacks business has mostly remained weak over the past few quarters due to lost distribution, including the effect of the underperformance of certain prior innovations. Though management is working to revive the business through investments in innovation and better in-store execution, the efforts are yet to bear significant results.
The company’s shares have been lagging the broader Zacks categorized Food-Miscellaneous/Diversified industry in the last one-year period. The stock has gained only 0.8% in the last one year, compared with the 10% rally of the broader food market. Estimates for this Zacks Rank #4 (Sell) company have moved down slightly for the current quarter, next quarter and next year over the last 60 days.
That said, Kellogg boasts a legacy of over 100 years built on solid product portfolio and brand identity in both cereals and snacks. Amid tepid sales growth, the company is making aggressive efforts to improve its product line. It is channeling funds toward product and packaging innovation as well as reformulation of many existing products to meet the rapidly changing taste of consumers regarding health and wellness.
Stock to Consider
Better-ranked stocks in the industry include B&G Foods, Inc. (BGS - Free Report) , Conagra Brands, Inc. (CAG - Free Report) and J&J Snack Foods Corp. (JJSF - Free Report) .
B&G Foods sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Full-year 2016 earnings for B&G Foods are expected to grow 42.2%.
Conagra – a Zacks Rank #2 (Buy) company – beat estimates in all the trailing four quarters with an average beat of 13.3%.
J&J Snack Foods, also a Zacks Rank #2 stock, are expected to witness 5.8% growth in fiscal 2017 earnings.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>