Hormel Foods Earns 39 Cents per Share

We had another earnings report this morning, this time from Hormel Foods (HRL). The Spam people earned 39 cents per share for the quarter which was up 15% from a year ago. The results matched Wall Street’s expectations. The company reaffirmed their full-year guidance of $1.81 to $1.95 per share. Net sales were up 7% while organic sales were flat.

Overall, this was an OK earnings report, but nothing great. The downside is that Hormel trimmed its full-year sales estimate to a range of $9.4 billion to $9.6 billion.

The CEO said:

“We reported record sales and earnings for the quarter and remain on track to deliver our full year earnings guidance range amid volatility due to tariffs and broader industry dynamics,” said Jim Snee, chairman of the board, president, and chief executive officer. “We continue to execute on our strategic initiatives while investing in growth for the future.”

“Grocery Products and International delivered solid results this quarter,” Snee said. “Refrigerated Foods’ branded value-added strategy was able to offset a dramatic decline in commodity profits. We also saw a strong increase in value-added sales at Jennie-O Turkey Store.”

“We increased our advertising investment this quarter and those investments are paying off with growth from brands such as Skippy®, Natural Choice®, Jennie-O®, Applegate®, Wholly Guacamole® and Herdez®,” Snee said. “I’m also pleased to report our recent strategic acquisitions of Columbus Craft Meats, Fontanini, and Ceratti are on track with expectations.”

The story is the same and it all comes down to prices. There’s a glut of beef, chicken and pork. That’s holding down prices and that cuts into Hormel’s business. The company is forced to cut prices.

The shares looked to take a big bath in the pre-market, but HRL is currently down about 2.6%.

Posted by on August 23rd, 2018 at 8:00 am


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