KFT Preview: Handling the Private-Label Challenge By Ron Thomas About this article: It is indicative of this bear market that even Kraft , a consumer staples stock with big problems, is beginning to look cheap now at $27. Using consensus EPS estimates of $1.91 and $2.02 for this year and next, respectively, the stock discounts 1% EPS growth in perpetuity. The bear story in this environment is that a pressed consumer will turn increasingly to private label. IRI numbers for the four-week period ending in October show private-label gains for 85% of its tracked categories vs. 51% in the year-ago period and 53% on average since the start of 2006. Looking at the situation in food and at Kraft another way, over the past four weeks, branded players have lagged their categories' sales growth by 170 basis points, and Kraft has lagged its categories by 585 basis points. (Note: I realize that four-week periods can be distorted, but... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200.

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