Consumer staples names in focus ahead of earnings this week

Several big brands in the consumer staples sector are set to report earnings this week, including Coca-Cola (KO), Kraft Heinz (KHC), and Molson Coors (TAP). Yahoo Finance Retail Reporter Brooke DiPalma highlights analyst comments on the sector and the biggest factors pressuring these companies.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video transcript

- Consumer staples stocks and focus this week with Kraft Heinz and Coca-Cola among the companies set to report results. Yahoo Finance's Brooke DiPalma is here with a preview. Brooke.

- Good morning, Akiko. That's right, many household names, one that all Americans know very well in their cupboard, are set to report this week. And some of those we're taking a closer look at include Molson Coors, waiting to see if that company continued to gain share after Bud Light lost its market share in the latter part or rather beginning throughout 2023.

Coca-Cola, many expecting low single-digit volume growth there.

W.K Kellogg, now, this will be the second earnings report for that company since its split from Kellanova. But many wondering how exactly they could buy in. Well, earlier today, bank of America analyst Bryan Spillane told Yahoo Finance that he's seeing investors be a little bit more selective on buying into the sector as a whole. But when high-quality stocks stumble, well, investors seem to be buying in then.

He shared some of his top picks as well. Take a listen.

- Within beverages right now, we're actually Coke over Pepsi. And again, it gets back into this, we think Coke has a year where they'll have a higher-quality top line, both in terms of balance between volume and price mix. And among the center-store packaged food companies, we still like Kraft Heinz-- sort of best in class in what is somewhat of a challenged block.

- And another analyst telling Yahoo Finance that Coke and PepsiCo have long-term competitive advantages over the sector in the next 20 years-- over their rivals rather in the next 20 years, and Kraft Heinz continues to be one to watch among many analysts on the Street. And so we'll be keeping a close eye on that one as well.

- What's the outlook for the sector overall, Brooke?

- Yeah, Akiko, well, the sector continues to under perform-- the S&P 500 quite significantly. And there are four things that I'm really watching when it comes to consumer staples sector is volume growth here. Are consumers pulling back on just how much they're buying with those laps of both price hikes taken in 2022 and 2023? Particularly for Kraft Heinz, I'm taking a closer look at promotion levels seen last year and if those worked to get consumers enticed to buy more.

Food away from home continues to outpace the price of food at home. Of course, with the CPI out tomorrow, that will be something to watch when it comes to the sector. And also, Akiko, I'm watching the impact of those conflicts that we continue to see in the Middle East, particularly how it's weighing on Coca-Cola. So those are just some of the things that might impact the sector as a whole.

- A busy week ahead for you, Brooke. Appreciate you breaking that down for us.