Hormel Foods Corporation (HRL Quick QuoteHRL - Free Report) has been benefiting from its strong presence in the retail, foodservice and international markets. The company has been witnessing favorable demand for its leading retail brands and strength in the foodservice business. For fiscal 2023, Hormel Foods projects net sales in the range of $12.6-$12.9 billion, indicating 1-3% growth on a year-over-year basis.

The leading manufacturer and marketer of various meat and food products remains on track with capacity expansion efforts. HRL is working on expanding the Columbus line of premium charcuterie products and adding capacity for higher-demand Planters products at its Fort Smith, AR, facility. It is also making significant investments in automation projects. For 2023, management expects to incur $280 million in capital expenditures.

Hormel Foods believes in strengthening its business through the addition of assets. In fourth-quarter fiscal 2022, it acquired a minority stake in an Indonesia-based food and beverage company, PT Garudafood Putra Putri Jaya Tbk. The buyout expanded Hormel Foods’ presence in Indonesia and Southeast Asia.
With the acquisition of snack company Planters in June 2021, Hormel Foods expanded its presence in the growing snacking space. This apart, its buyout of Sadler's Smokehouse in March 2020 enhanced its position in the foodservice space.

HRL remains committed to rewarding shareholders through dividend payouts and share repurchases. For instance, in the first six months of fiscal 2023, it paid out dividends of $292.6 million and repurchased shares worth $12.3 million.

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In the past three months, this Zacks Rank #3 (Hold) stock has inched up by 0.2% compared with the industry’s growth of 2.9%.

However, the company has been experiencing weakness across its retail bacon and foodservice businesses. In the second quarter of fiscal 2023, volumes in the Retail segment declined 7% year over year, while that of the Foodservice segment fell by 1%. Volumes in the International unit also went down by 4%.

The company’s retail businesses, especially in the center store, remain disproportionately affected by increased inflationary pressures. In the fiscal second quarter, its gross profit margin contracted by 140 basis points due to a decline in sales. That said, management is on track to stabilize margin pressures via pricing actions, operational cost management and supply chain cost savings initiatives.

3 Promising Staple Stocks

Here we have highlighted three top-ranked stocks, namely J&J Snack Foods Corporation (JJSF Quick QuoteJJSF - Free Report) , MGP Ingredients, Inc. (MGPI Quick QuoteMGPI - Free Report) and Celsius Holdings (CELH Quick QuoteCELH - Free Report) .

J&J Snack Foods is an American manufacturer, marketer and distributor of branded niche snack foods and frozen beverages for the food service and retail supermarket industries. JJSF has a trailing four-quarter earnings surprise of 4.7%, on average. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for J&J Snack Foods’ current fiscal-year sales and earnings suggests growth of 11.1% and 62.3%, respectively, from the year-ago reported figures.

MGP Ingredients produces and markets ingredients and distillery products for the packaged goods industry. The company currently flaunts a Zacks Rank #1. MGPI has a trailing four-quarter earnings surprise of 18%, on average.

The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and earnings suggests growth of 5.8% and 10.4%, respectively, from the year-ago reported numbers.

Celsius Holdings, which offers functional drinks and liquid supplements, currently has a Zacks Rank #2 (Buy). CELH delivered an earnings surprise of 100% in the last reported quarter.

The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings suggests growth of 87.6% and 168.8%, respectively, from the year-ago reported numbers.