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Hormel Foods (HRL) to Report Q1 Earnings: What's in Store?

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Hormel Foods Corporation (HRL - Free Report) is likely to register a decline in the bottom line, when it reports first-quarter fiscal 2021 numbers on Feb 18. The Zacks Consensus Estimate for fiscal first-quarter earnings has moved down by a cent in the past seven days to 40 cents per share. This suggests a decline of 11.1% from the year-ago quarter’s reported figure. The meat products company has a trailing four-quarter earnings surprise of 0.8%, on average. In the last reported quarter, it delivered a negative earnings surprise of 2.3%.

Meanwhile, the Zacks Consensus Estimate for revenues is pegged at $2.39 billion, which indicates an increase of 0.2% from the prior-year quarter’s reported figure.

Hormel Foods Corporation Price and EPS Surprise

 

Hormel Foods Corporation Price and EPS Surprise

Hormel Foods Corporation price-eps-surprise | Hormel Foods Corporation Quote

 

Key Factors to Note

Hormel Foods has been benefiting from strength in the International & Other segment. This was witnessed in the fourth quarter of fiscal 2020, wherein sales in the segment increased 8% year over year on the back of solid demand for SKIPPY peanut butter and SPAMS luncheon meat. For the quarter under review, the consensus mark for International & Other segment sales is pegged at $168 million, which suggests an increase from $162 million recorded in the year-ago quarter.

Apart from these, strength in the company’s popular products like Hormel Cup N' Crisp pepperoni, Herdez Salsa Cremosas and Happy Little Plants among others have been contributing to the upside. Moreover, the company’s efforts to strengthen business through strategic investments for boosting capacity have been a key driver.

However, Hormel Foods has been seeing declines in its foodservice business amid the pandemic. This could be attributed to reduced demand from various foodservice venues in the wake of COVID-19 induced social distancing. Apart from these, the company has been grappling with escalated costs associated with COVID-19. These include costs related to lower production volumes, employee bonuses and expenses to ensure better safety measures in production units.

What the Zacks Model Unveils

Our proven model does not predict an earnings beat for Hormel Foods this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hormel Foods carries a Zacks Rank #4 (Sell) and an Earnings ESP of -0.99%.

Stocks With Favorable Combinations

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

Sanderson Farms, Inc. (SAFM - Free Report) currently has an Earnings ESP of +122.02% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Service Corporation International (SCI - Free Report) currently has an Earnings ESP of +3.68% and carries a Zacks Rank #2.

The Boston Beer Company, Inc. (SAM - Free Report) currently has an Earnings ESP of +31.68% and carries a Zacks Rank #3.

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