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Will Strong Brands Aid Hormel Foods' (HRL) Q4 Earnings?
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Hormel Foods Corporation (HRL - Free Report) is slated to report fourth-quarter fiscal 2018 results on Nov 20, before market opens. The company has a mixed record of earnings surprises in the trailing four quarters. Let’s see what’s in store for this renowned meat products company this time.
Strong Brands & Buyouts to Aid Performance
Hormel Foods boasts a portfolio with strong brands that have been fueling popularity and growth. Some of the renowned names adorning the portfolio are Hormel Black Label bacon, SPAM, Muscle Milk and Wholly Guacamole dips. Moreover, the increasing popularity of other brands like The Natural Choice, Cafe H products and Hormel fire braised meats are expected to drive its performance. The company is committed toward strategic advertisement investments, which yielded in the third quarter of fiscal 2018. This was evident from improvements in brands like Skippy, Applegate, Natural Choice, Jennie-O, Herdez and Wholly Guacamole.
To enhance offerings, Hormel Foods unveiled plans to expand Burke manufacturing facility in September. Worth almost $150 million, the expansion initiative is likely to boost the company’s pizza toppings and other food products manufacturing capabilities.
Acquisitions are another lucrative mechanism through which the company has been developing its brand. Buyouts like Fontanini and Columbus have been yielding and are expected to continue boosting revenues in the forthcoming periods.
Volatile Market Conditions
Volatile tariff environment for pork is an obstacle for Hormel Foods. Further, soft turkey market challenges and escalated freight costs are denting the company’s performance for the past few quarters. In fact, rising freight costs are a hurdle for other food companies, such as Tyson Foods (TSN - Free Report) , Conagra Brands (CAG - Free Report) and Sanderson Farms .
Nevertheless, we expect Hormel Foods’ strong brands and rising demand for meat to provide some cushion from the aforementioned hurdles.
Hormel Foods Corporation Price, Consensus and EPS Surprise
The Zacks Consensus Estimate for year-on-year sales growth for Grocery Products, Jennie-O Turkey Store, Refrigerated Foods and International & Other segments for the impending quarter are pegged at approximately 1.5%, 0.9%, 9% and 5.6% respectively. In fact, the consensus mark for the company’s overall net sales is at $2,556 million, indicating an improvement of 2.5% from the year-ago quarter’s tally of $2,493 million.
Further, robust sales and benefits from tax reforms are likely to fuel the bottom-line performance. The Zacks Consensus Estimate for earnings is currently pegged at 46 cents per share, reflecting an improvement of 12.2% from 41 cents in the year-ago quarter. The estimate has been stable in the past 30 days.
Zacks Model
Our proven model doesn’t show that Hormel Foods is likely to beat bottom-line estimates this quarter. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Will Strong Brands Aid Hormel Foods' (HRL) Q4 Earnings?
Hormel Foods Corporation (HRL - Free Report) is slated to report fourth-quarter fiscal 2018 results on Nov 20, before market opens. The company has a mixed record of earnings surprises in the trailing four quarters. Let’s see what’s in store for this renowned meat products company this time.
Strong Brands & Buyouts to Aid Performance
Hormel Foods boasts a portfolio with strong brands that have been fueling popularity and growth. Some of the renowned names adorning the portfolio are Hormel Black Label bacon, SPAM, Muscle Milk and Wholly Guacamole dips. Moreover, the increasing popularity of other brands like The Natural Choice, Cafe H products and Hormel fire braised meats are expected to drive its performance. The company is committed toward strategic advertisement investments, which yielded in the third quarter of fiscal 2018. This was evident from improvements in brands like Skippy, Applegate, Natural Choice, Jennie-O, Herdez and Wholly Guacamole.
To enhance offerings, Hormel Foods unveiled plans to expand Burke manufacturing facility in September. Worth almost $150 million, the expansion initiative is likely to boost the company’s pizza toppings and other food products manufacturing capabilities.
Acquisitions are another lucrative mechanism through which the company has been developing its brand. Buyouts like Fontanini and Columbus have been yielding and are expected to continue boosting revenues in the forthcoming periods.
Volatile Market Conditions
Volatile tariff environment for pork is an obstacle for Hormel Foods. Further, soft turkey market challenges and escalated freight costs are denting the company’s performance for the past few quarters. In fact, rising freight costs are a hurdle for other food companies, such as Tyson Foods (TSN - Free Report) , Conagra Brands (CAG - Free Report) and Sanderson Farms .
Nevertheless, we expect Hormel Foods’ strong brands and rising demand for meat to provide some cushion from the aforementioned hurdles.
Hormel Foods Corporation Price, Consensus and EPS Surprise
Hormel Foods Corporation Price, Consensus and EPS Surprise | Hormel Foods Corporation Quote
Estimates Indicate Growth
The Zacks Consensus Estimate for year-on-year sales growth for Grocery Products, Jennie-O Turkey Store, Refrigerated Foods and International & Other segments for the impending quarter are pegged at approximately 1.5%, 0.9%, 9% and 5.6% respectively. In fact, the consensus mark for the company’s overall net sales is at $2,556 million, indicating an improvement of 2.5% from the year-ago quarter’s tally of $2,493 million.
Further, robust sales and benefits from tax reforms are likely to fuel the bottom-line performance. The Zacks Consensus Estimate for earnings is currently pegged at 46 cents per share, reflecting an improvement of 12.2% from 41 cents in the year-ago quarter. The estimate has been stable in the past 30 days.
Zacks Model
Our proven model doesn’t show that Hormel Foods is likely to beat bottom-line estimates this quarter. For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Hormel Foods’ carries a Zacks Rank #3, its Earnings ESP of 0.00% lowers expectations of an earnings beat this time. You can see the complete list of today’s Zacks #1 Rank stocks here.
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