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What Annies Inc’s (BNNY) Needs: Healthier Growth

Next Monday, Annies Inc (NYSE:BNNY)‘s will release its latest quarterly results. After having been public for more than a year now, Annie’s biggest need is to show investors that it can sustain its growth trajectory long enough to justify its current stock price.

Annies Inc (NYSE:BNNY)

Over the past year, shares of Annie’s have largely remained stagnant, as investors have waited patiently for the company’s financial results to catch up with the enthusiasm that shareholders had immediately following its IPO. Now, though, it’s time for the natural-foods maker to deliver the growth investors want to see. Let’s take an early look at what’s been happening with Annies Inc (NYSE:BNNY)’s over the past quarter and what we’re likely to see in its quarterly report.

Stats on Annie’s

Analyst EPS Estimate $0.28
Change From Year-Ago EPS 17%
Revenue Estimate $50.73 million
Change From Year-Ago Revenue 18%
Earnings Beats in Past 4 Quarters 2

Source: Yahoo! Finance.

How will Annie’s earnings fare this quarter?
Analysts haven’t budged from their calls on Annies Inc (NYSE:BNNY)’s earnings in recent months, keeping their views on the March quarter and the full fiscal 2014 year stable. The stock, however, has had some difficulty, falling about 9% since early March.

Annies Inc (NYSE:BNNY)’s has been one of the beneficiaries of the industrywide trend toward healthier food offerings. Whole Foods Market, Inc. (NASDAQ:WFM) pioneered the movement, and in many ways, its huge growth over the years has directly contributed to the rise of natural-foods producers. The Hain Celestial Group, Inc. (NASDAQ:HAIN) counts Whole Foods Market, Inc. (NASDAQ:WFM) as its largest customer for its array of products, which include everything from baby food and organic snacks to prepared meals and personal-care products. Annies Inc (NYSE:BNNY)’s, however, has gone well beyond the natural-food retail segment, getting a greater proportion of its overall revenue from mainstream grocery stores as well as broader-based national retailers.

But Annie’s has had to overcome some growth pains lately. In January, the company voluntarily recalled its frozen pizzas after acknowledging the possibility that some of the dough contained what it called “metal fragments.” Nevertheless, the company’s response to the incident doesn’t appear to have slowed growth in its various segments, as its meals, snacks, and condiments divisions all posted substantial growth in the 18% to 25% range, and Annies Inc (NYSE:BNNY)’s issued guidance suggesting 15% to 20% growth even with the continuing impact of the pizza recall.

Moreover, competition will remain fierce in the food segment.

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