Consumer staples are those items that are considered essential for everyday life. This includes things such as food, clothing, and personal care products. Consumer staples stocks refer to the publicly traded companies that produce these goods. Investors tend to like consumer staples stocks because they are considered to be relatively safe and stable investments. Consumer staples companies tend to have strong balance sheets and generate consistent cash flow, even during economic downturns. Historically, popular consumer staples companies among stock market investors are names like Procter & Gamble (NYSE: PG), Coca-Cola Company (NYSE: KO), and PepsiCo Inc. (NASDAQ: PEP) just to name a couple.
However, consumer staples stocks tend to underperform when the economy is booming. This is because investors usually prefer to put their money into more speculative investments at that time. As a result, investing in consumer staples stocks is generally considered to be a suitable strategy for conservative investors. If this has you interested in taking a deeper dive into the consumer staples industry, check out these two top consumer staples stocks in the stock market this week.
Consumer Staples Stocks To Invest In [Or Avoid] Now
1. Performance Food Group (PFGC Stock)
Leading off the list today is Performance Food Group Company (PFGC). In brief, Performance Food Group is the third-largest U.S. food service distributor. The company has a heavy presence along the Eastern seaboard, the Southeast, and the Midwest of the United States. Additionally, PFGC services a broad range of customers, from small independent restaurateurs to large national chains.
PFGC Recent Stock News
In August, the company reported its fourth quarter and full-year 2022 financial results. For starters, PFGC reported fourth quarter 2022 earnings of $1.07 per share and revenue of $14.6 billion for Q4 2022. The revenue figure signifies a 56.8% increase during the same period, a year prior. Meanwhile, the company said it estimates Q1 2023 revenue of $14.20 billion to $14.50 billion.
Switching our focus over to the 2022 full-year results. Performance Food Group reported its net sales for fiscal 2022 came in at $50.9 billion. This represents an increase of 67.4% on a year-over-year basis. With that, the company also said that it estimates fiscal 2023 revenue to come in between $56 billion to $58 billion.
George Holm, PFG’s Chairman & Chief Executive Officer commented, “As a result of the positive momentum in all three business segments, today, we are able to provide strong financial guidance for fiscal 2023. We believe our business is well positioned to achieve our objectives and is equipped to succeed in the current operating environment.“
PFGC Stock Chart
Continuing on, shares of PFGC are down 7.42% so far in 2022. Though, this means PFGC stock has also outperformed the broader markets year-to-date. As we move into this new trading week, Performance Food Group stock is set to open at around $42.95 per share. All in all, do you think PFGC stock is a good consumer staple stock to keep on watch right now?
2. Grocery Outlet Holding (GO Stock)
Next up, let’s take a look at Grocery Outlet Holding Corp. (GO). For starters, Grocery Outlet Holding Corp is a grocery store operator in the United States. The company’s flexible buying model allows them to offer quality, name-brand products at prices generally 40% to 70% below conventional retailers. For a sense of scale, Grocery Outlet currently has more than 420 stores throughout the United States.
GO Recent Stock News
At the beginning of last month, Grocery outlet reported a beat for its second quarter 2022 financial results. In the report, the company posted earnings of $0.29 per share along with revenue of $897.7 million for the 2nd quarter ended June 2022. This is versus the street’s consensus estimates, which were earnings of $0.24 per share and revenue of $854.1 million for Q2 2022. Moreover, the revenue numbers for the second quarter of 2022 represented a 15.7% increase during the same period in 2021.
Also in the release, Grocery Outlet said it’s now projecting 2022 non-GAAP earnings of $0.97 to $1.00 per share, and revenue of $3.46 billion to $3.48 billion. This was revised higher compared to the company’s previously announced forecast for the 2022 fiscal, which was earnings of $0.94 to $0.99 per share and revenue estimates of $3.39 billion to $3.42 billion.
Charles Bracher, CFO of Grocery Outlet, said this in the company’s release to shareholders, “We delivered strong second quarter results, exceeding both our top and bottom-line expectations, which is a testament to our value-oriented model and our hard-working team. Our increased full year outlook reflects solid first half performance, ongoing momentum in the current quarter, and continued reinvestments in our business in support of our long-term objectives.“
GO Stock Chart
Separate from that, year-to-date shares of GO stock have outperformed the broader markets. In detail, shares of GO stock have advanced 16.56% so far this year. Meanwhile, going into the Monday morning’s trading session GO stock is set to open at around $33.29 a share. Given the company’s recent quarterly performance, is now a good time to add Grocery Outlet to your consumer staples stocks watchlist?