Canadians did not think twice about supporting the “Buy Local” campaign in response to U.S. tariff threats and President Trump’s rhetoric to make Canada its 51st state. Purchasing domestic products and services would help local businesses and strengthen the economy. Sales of Canadian products, especially food, rose as the trend gathered momentum.
The movement is also a boon for TSX companies, including grocers like Loblaw (TSX:L) and Metro Inc. (TSX:MRU). However, if you have $3,100 to invest, Maple Leaf Foods (TSX:MFI) is the smartest food stock to buy right now. The consumer-defensive stock has risen 25.8%-plus in the last three months. At $26.76 per share, MFI outperforms with a 32.8%-plus year-to-date gain versus the broad market’s 5%-plus. The 3.6% dividend is an enticement to income-oriented investors.
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Strategic transformation
Canadian consumers deserve credit for the surge of Maple Leaf Foods in the stock market. Its President and CEO, Curtis Frank, said, “Maple Leaf Foods has demonstrated its ability to outperform our peers in both top and bottom-line performance. We expect this trend to accelerate in 2025 as our long-term strategies and focus yield clear and measurable results.”
The $3.3 billion packaged goods company produces and processes food products, including meat, poultry, and prepared meals. Maple Leaf, Schneider’s, LightLife, and Field Roast are among its popular or leading brands. Besides Canada, it operates in the U.S. and Asia.
According to Frank, this year will be a significant year of strategic transformation and financial progress for Maple Leaf Foods. The company plans a strategic split and spin-off of its pork operations by the second half of 2025. Canada Packers will become an independent, publicly traded company once it gets shareholders’ approval.
Maple Leaf has completed the first phase of its Fuel for Growth cost competitiveness initiatives, which should result in meaningful improvement in profitable growth. The company will also capitalize on the growing consumer demand for protein as part of its growth strategy.
Robust sales growth
Maple Leaf reported an 8.3% increase in sales to $1.2 billion in Q1 2025 compared to Q1 2024. In the same quarter, earnings dropped 3.9% year-over-year to $49.6 million, although Adjusted EBITDA climbed 43% to $166.3 million from a year ago. Quarterly sales fluctuate depending on changes in pricing, volume, sales mix, and the impact of foreign currency.
Frank notes the robust sales growth across Prepared Foods, Poultry, and Pork, demonstrating significant progress across all business areas. Fluctuations in quarterly sales fluctuate depending on changes in pricing, volume, sales mix, and the impact of foreign currency.
A key deliverable in 2025 is the spin-off of the pork operations. The creation of two independent public companies aims to unlock shareholder value. Maple Leaf Foods will remain a protein-focused consumer packaged goods company. Canada Packers will be a global pork company.
Look for the Leaf
Investors should “Look for the Leaf” if they want to ride on the “Buy Local” boom. The die is cast. Even if America shapes up, Maple Leaf will benefit immensely from the expected long-term support of Canadian consumers for local businesses.
