Consumer Staples

Consumer Staples Strategy

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Thesis

Why this sector matters to investors right now. Structural, not market timing.

Consumer staples on this page is four businesses that share a shopping trip and not a margin structure. Staples retail is a volume and traffic problem: Walmart FY2026 net sales were $706.4 billion (Walmart U.S. $483.0 billion), Costco FY2025 net sales were $269.9 billion with $5.32 billion of membership fees, and Kroger FY2025 sales were $147.6 billion. Branded CPG is a price, mix, and input-cost problem: P&G FY2026 net sales were $87.0 billion with organic sales up 1 percent, Coca-Cola 2025 net revenues were $47.9 billion with organic revenues up 5 percent, and Mondelez 2025 net revenues were $38.5 billion with volume/mix down 3.7 points against cocoa. PepsiCo 2025 net revenue was $93.9 billion because Frito-Lay and Quaker sit inside a beverage ticker.

The live questions are inside the houses. Walmart U.S. is still 68 percent of Walmart. Half of PepsiCo is convenient food. P&G is still Fabric and Home Care first ($30.3 billion). PMI smoke-free was 41.5 percent of 2025 net revenues. Target's largest merchandise line is food and beverage ($24.1 billion) even as group net sales fell 1.7 percent. This page is not restaurants, not athletic apparel, and not the Retail sector's off-price and specialty names.

Structural drivers

Forces that shape long-run demand and economics. Each driver is sourced.
  • •Scale at the shelf still belongs to the merchandisers. Walmart FY2026 net sales $706.4 billion, up 4.7 percent; Walmart U.S. $483.0 billion (68 percent). Costco FY2025 net sales $269.9 billion, up 8.1 percent. Kroger FY2025 $147.6 billion. Source: Walmart FY2026 8-K / 10-K; Costco FY2025 10-K; Kroger FY2025 8-K.
  • •Membership income is a different P&L than merchandise. Costco FY2025 membership fees were $5.32 billion, up 10 percent, on 81.0 million paid members and 914 warehouses. Source: Costco FY2025 10-K.
  • •Concentrate economics are not bottler economics. Coca-Cola 2025 net revenues $47.9 billion, +2 percent reported and +5 percent organic, with North America $19.6 billion. PepsiCo 2025 $93.9 billion includes PBNA $28.2 billion and PFNA $27.5 billion. Source: Coca-Cola FY2025 8-K; PepsiCo FY2025 8-K.
  • •Household brands still print cash at low organic growth. P&G FY2026 net sales $87.0 billion, +3 percent reported and +1 percent organic. Fabric and Home Care $30.3 billion is the largest sector. Colgate 2025 net sales $20.4 billion, +1.4 percent. Source: P&G FY2026 results; Colgate FY2025 results.
  • •Foodservice is a staples adjacency that is not grocery. Sysco FY2026 sales $84.6 billion, +3.9 percent, with U.S. Foodservice $58.8 billion. That demand sits with restaurants, healthcare, and lodging, which this page does not roster. Source: Sysco FY2026 results.
  • •Reduced-risk nicotine is already a material share of PMI. 2025 net revenues $40.6 billion, smoke-free $16.9 billion (41.5 percent of sales, +15 percent). Combustibles were still $23.8 billion. Source: PMI FY2025 earnings release.
  • •Value formats kept growing after the grocery trip traded down. Dollar General FY2025 net sales $42.7 billion, +5.2 percent, with consumables $35.1 billion. Dollar Tree continuing-ops net sales $19.4 billion, +10.4 percent. Source: Dollar General FY2025 results; Dollar Tree FY2025 results.

Structural risks

Forces that could compress demand, change economics, or break the thesis.
  • •Volume is giving way to price in several branded houses. Mondelez 2025 volume/mix was -3.7 points against +5.8 percent reported sales. Kraft Heinz 2025 net sales $24.9 billion, -3.5 percent, with volume/mix -4.1 points and $9.3 billion of impairments. Source: Mondelez FY2025 results; Kraft Heinz FY2025 8-K.
  • •Cocoa and other ag inputs can erase a sales beat. Hershey 2025 net sales $11.7 billion, +4.4 percent, while reported diluted EPS fell 60.3 percent. Mondelez called out unprecedented cocoa cost headwinds in 2025. Source: Hershey FY2025 results; Mondelez FY2025 results.
  • •Target is shrinking while Walmart is not. Target FY2025 net sales $104.8 billion, -1.7 percent, with comparable sales -2.6 percent. Food and beverage was the largest merchandise line at $24.1 billion. Source: Target FY2025 10-K / earnings.
  • •Legal and one-time items distort protein. Tyson FY2025 sales $54.4 billion included a $653 million legal-accrual reduction to sales. GAAP operating income was $1.1 billion. Source: Tyson FY2025 8-K.
  • •Kenvue plus Kimberly-Clark is unfinished. Kenvue 2025 net sales $15.1 billion, -2.1 percent. Kimberly-Clark 2025 net sales $16.4 billion, -2.1 percent reported and +1.7 percent organic. The companies describe a cash-and-stock combination targeted for the second half of 2026, still subject to remaining approvals. Source: Kenvue FY2025 results; Kimberly-Clark FY2025 results.
  • •General Mills is smaller after portfolio moves. FY2026 net sales $18.4 billion, -5 percent, including a 6-point divestiture and acquisition headwind and a 2-point 53rd-week benefit. Organic net sales were -2 percent. Source: General Mills FY2026 8-K.
  • •KDP's 2026 sales guide embeds a pending coffee deal. 2025 net sales $16.6 billion, +8.2 percent. The 2026 net sales range of $25.9 to $26.4 billion assumes an incremental JDE Peet contribution and is not an actual. Source: KDP FY2025 results.

Competitive landscape

How to think about the players. Framing along axes (pure play vs diversified, incumbent vs challenger, etc). Not stock picking.

Read the roster as archetypes, not as a ranked buy list.

1. Staples merchandisers (WMT, COST, KR, TGT, DG, DLTR, CASY). Traffic, comps, private brand, and (for Costco) membership. Costco, Target, and the dollar stores stay on this page. They are not on Retail.

2. Global beverage platforms (KO, PEP, KDP, MNST). Concentrate versus finished product versus energy. PepsiCo is also a snack company.

3. Packaged food (MDLZ, KHC, GIS, HSY, TSN, plus SYY as the foodservice distributor). Cocoa, protein cycles, and food-away-from-home volume.

4. Household and personal care (PG, CL, KMB, KVUE, EL, plus CHD and CLX on the roster). Category leaders with low organic growth and a pending KMB/KVUE combination.

5. Tobacco (PM, MO). PMI is the smoke-free mix story. Altria remains the domestic combustible and related-products name.

6. Ag merchants (ADM, BG). Upstream to packaged food, not branded CPG.

Key metrics to watch

The operational and financial metrics that matter most in this sector. Each one names its source and update cadence.
MetricSourceFrequencyWhy it matters
Walmart U.S. net sales and comps (ex-fuel)Walmart quarterly earnings release and Form 10-KquarterlyWalmart U.S. was $483.0 billion and 68 percent of FY2026 net sales. If this line slows, the retail pile on this page slows.
Costco membership fees and paid-member countCostco Form 10-K and quarterly resultsquarterlyFY2025 fees were $5.32 billion on 81.0 million paid members. That is the high-margin attach, not the $269.9 billion merchandise line.
Coca-Cola and PepsiCo organic revenue and concentrate versus finished mixCompany 8-K exhibits and Form 10-K segment notesquarterlyReported sales can be FX and structural. Organic plus the North America versus bottling split is what prices the concentrate model.
PepsiCo PFNA versus PBNAPepsiCo segment note in the 10-K / 8-KquarterlyPFNA $27.5 billion and PBNA $28.2 billion in 2025. Treating PEP as a soda stock misses half the firm.
P&G organic sales and Fabric and Home CareP&G quarterly resultsquarterlyFY2026 organic sales +1 percent on $87.0 billion. Fabric and Home Care $30.3 billion is the sector's largest branded pile.
PMI smoke-free net revenue sharePhilip Morris International earnings releasequarterlySmoke-free was 41.5 percent of 2025 net revenues ($16.9 billion). That mix is the tobacco thesis on this page.
Mondelez and Hershey volume/mix versus cocoa commentaryCompany earnings releasesquarterlyBoth printed sales growth in 2025 while volume/mix or cocoa costs hit the P&L. Price without volume is not the same as demand.

Catalysts and milestones

Known upcoming events that could move the sector. Dated where possible.
  • •Costco FY2026 year-end (August 30, 2026) and the FY2026 10-K. This page still uses FY2025 ($269.9 billion net sales) because the full year had not printed as of the August 25, 2026 review.
  • •Kimberly-Clark and Kenvue combination close, described as second half of 2026 subject to remaining foreign approvals (Kenvue FY2025 results, January 29, 2026 shareholder votes already recorded).
  • •KDP and JDE Peet close assumptions inside the 2026 net sales guide of $25.9 to $26.4 billion (KDP FY2025 results, February 24, 2026).
  • •Walmart FY2027 guide: net sales (cc) +3.5 to 4.5 percent off FY2026 net sales of $706.4 billion (Walmart Q4 FY26 release).
  • •Coca-Cola and PepsiCo 2026 quarterly organic revenue prints, starting with Q1 2026 reports already in the 2026 calendar.
  • •Kraft Heinz 2026 operating plan after pausing separation work and announcing a $600 million commercial investment (Kraft Heinz FY2025 results, February 11, 2026).

What would change the view

Conditions or evidence that would invalidate the thesis or materially shift the risk picture.
  • •Walmart U.S. comps (ex-fuel) turn negative for a full year while Costco membership fees stall. That would say the merchandiser pile is no longer compounding traffic.
  • •PepsiCo convenient foods (PFNA plus LatAm and Asia Pacific foods) fall below beverages on a sustained basis, or the company splits the foods P&L out of the beverage conversation.
  • •P&G organic sales stay at or below zero for several consecutive years while Fabric and Home Care loses dollars. The household thesis is low growth, not no growth.
  • •PMI smoke-free mix reverses toward combustibles for a full year, or U.S. nicotine-pouch regulation materially caps ZYN.
  • •Mondelez and Hershey restore volume/mix while cocoa costs normalize, or the opposite: another year of price-up, volume-down with margin compression.
  • •The KMB/KVUE combination fails or is restructured, leaving two shrinking reported-sales stories instead of one combined household platform.
  • •Target food and beverage dollars roll over the way apparel and home already have, which would weaken the claim that this is a staples retailer rather than a discretionary box.

What we are not covering

Sub-areas, technologies, or companies we are deliberately excluding from the analysis, and why.
  • •Restaurants (MCD, SBUX, CMG, YUM, and the rest). Those names sit on Travel and Leisure.
  • •Athletic and apparel brands (NKE, LULU, TPR, GAP). Those names sit on Athletic and Apparel.
  • •Home improvement, off-price, auto retail, and specialty retail. Those names sit on Retail. Costco, Target, and the dollar stores do not.
  • •Private CPG (Mars, Ferrero, Lactalis, Cargill branded foods) and most international grocers. No sourced public filings in this pass.
  • •Alcohol deep-dives for STZ, TAP, and Brown-Forman. They are on the roster. They are not in the first chart set because this pass did not lock a sourced latest-year total for each.
  • •Custom per-company KPI floors. Deferred on purpose for new staples tickers.

Sources

Primary sources cited in this analysis. Links open in a new tab.

Audit trail

Record of the last review and what changed. Required on every refresh.
Last reviewed: 2026-08-25
Change log
  • 2026-08-25Replaced the scaffold strategy with sourced copy from FY2025 and FY2026 company filings and earnings releases. Charts on Overview, Food, Beverage, Household, and Retail use the same figures.
Unresolved questions
  • •What are the sourced latest-year totals for STZ, TAP, BF-B, ADM, BG, MO, CHD, CLX, HRL, MKC, and SJM so they can join the roster-revenue chart?
  • •Does Costco FY2026 (August 2026 year-end) change the membership-fee or warehouse-count story enough to replace the FY2025 bars?
  • •If KMB/KVUE closes, does this page keep two rows or one combined household name?
  • •Should PepsiCo foods also appear as a labeled bar on the Food tab, or does that double-count PEP?
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Consumer Staples Strategy: Market Data | Sterling