Wingstop And Hershey Are Two Food Stocks Overcoming InflationThese two food stocks are overcoming inflation and delivering results for shareholders. Both stocks are moving higher in the wake of their earnings reports.

Hershey And Wingstop Outpace Inflation With Market-Beating Results

Food stocks have come into the spotlight as a defensive play for recessionary times. The recession was confirmed with the first estimate for Q2 GDP at -0.9% and the odds are this figure will be revised lower. The idea is that consumers will focus their dollars on food in favor of discretionary items and, in the case ofWingstop (NYSE: WING)andHershey (NYSE: HSY), some brands are in a better position than others. These two iconic names offer comfort food appreciated by a wide range of consumers and have the brand recognition to carry them through the toughest times. While consumers are cutting back on clothes, cars, and houses they are turning to entertainment venues like Wingstop with its line-up of Buffalo wings and movie theaters with their vast assortment of candy treats and that is driving results.

Wingstop Flies Higher On Surprise Profit

Wingstop's success is due to more than just America's love of chicken wings. The company is expanding its footprint and working to capitalize on efficiencies of scale to drive value for shareholders. Among the company's many growth pillars is the digital avenue which accounted for60.5% of sales. The key takeaway from the report, however, is the company's margin which came in well above expectations. The company reported revenue of $83.8 million which missed the analyst consensus by nearly 300 basis points but earnings that were well ahead of expectations. The adjusted $0.45 beat the consensus by $0.09 due to inflation mitigating efforts and the outlook for the back half of the year is even better.

"Our second quarter results demonstrate the resiliency and underlying strength of the Wingstop brand as the unit economics have continued to strengthen throughout 2022, fueling another record number of net new openings this quarter," he said. "We are in a unique position for the back half of 2022 where we are benefiting from meaningful deflation in bone-in wings, have a proven playbook, along with sales-driving levers that give us confidence in our ability to deliver on our outlook for 2022."

Shares of Wingstop are up more than 20% in the wake of the earnings report and could go even higher. The stock underwenta deep correctionearly in the year that opens the door to another 50% increase during the retracement. The stock is trading at a very high valuation for the times but is still delivering resilient results so a move back to the all-time high of $180 is not unrealistic if not without hurdles.

Sweet Results From Hershey, And A Dividend Increase Too

Hershy is among the highest valued consumer stocks on the market and fora reason. The company's iconic brands give it a deep moat and a strong cash flow to fuel the dividend. The dividend isn't the highest in the Consumer Staples sector, either, but is growing just as quickly as any. The stock pays about 1.9% after the 15% distribution increase and it is a safe payout for income investors. The company has beenincreasing the payoutfor 14 years and still has plenty of ammunition to fire off some more.

This stock didn't make quite the move seen in Wingstop shares but they are moving higher. Hershey shares gained more than 2.0% in a trend-following move that should take it up to the recent all-time high. A move to a new all-time high would be bullish and could take the stock up another 10% to 15% but there is a risk. There may be resistance at the all-time high that keeps the stock range bound and moving sideways over the next few months.