Two consumer goods stocks have fallen sharply while their core businesses hold up. Brown-Forman is down about 65% from its November 2020 peak, with Jack Daniel's sales flat in the quarter ended July 31 and its ready-to-drink portfolio up 20%; the company repaid a $343 million euro-denominated note, sold $500 million of five-year notes, and has paid dividends for 82 consecutive years, while CEO Lawson Whiting plans to retire once a successor is named. Simply Good Foods has lost about 70% from its 52-week high as Atkins sales fell 24.6%, but Quest generated $230 million of the company's $357 million in quarterly sales and is still growing. The company repurchased $213 million of its stock in the first nine months, partly funded by a $150 million loan, and wrote down Atkins and OWYN by $331 million. The author sees Brown-Forman as the less risky holding and Simply Good Foods as a riskier bet that warrants a smaller position, both with a 10-year horizon.
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