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Hormel Foods (HRL) Highlights Growth Targets at Investor Day
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Hormel Foods Corporation (HRL - Free Report) highlighted its priorities and financial targets at the Investor Day conference held on Oct 12, 2023.
The company’s management underlined digital transformation, investments in new capacity and automation, and transformation and modernization efforts as the key components of its long-term value creation model. These priorities are strengthening its capabilities to deliver high values to customers and shareholders.
Hormel Foods updated its strategic priorities aligned with business segments, which are expected to drive earnings growth over the next three years. It will focus on driving growth in its retail business by maintaining a robust portfolio of brands with balanced exposure across diverse categories and investing in marketing, innovation and long-term growth. This will include directing its resources to fuel growth for the Planters snack nuts business. It expects incremental savings from a series of projects aimed at reducing costs and further synergies from the implementation of GoFWD.
HRL is focused on expanding its industry leadership in the Foodservice business by establishing digital leadership, growing key categories and extending its presence in convenience stores. The company plans to accelerate growth in certain key categories like bacon, pizza toppings, turkey and premium prepared proteins. Apart from this, management is focused on initiatives like One Supply Chain and Project Orion to accelerate growth.
The company plans to achieve organic net sales growth of 2-3% in the long run. It is also focused on growing its operating income by more than $250 million by 2026. This includes 5-7% growth from its current business and an operating income of $25 million through the transformation of its Jennie-O Turkey Store, and merger and acquisition synergies. It includes savings of more than $200 million through cost-reduction and supply-chain normalization efforts.
The company has been committed to increasing its cash flow to support dividend hikes, capital investment and debt paydown.
Zacks Rank & Price Performance
Hormel Foods, with a $17.9-billion market capitalization, currently carries a Zacks Rank #5 (Strong Sell). The company has been grappling with continued weakness in the International segment, alongside earnings pressure from heightened competition at the Retail business. It expects the overall consumer spending to remain under pressure in the United States, and adversely impact its top and bottom lines in fiscal 2023.
Image Source: Zacks Investment Research
The company’s shares have lost 18.6% compared with the industry’s decline of 9.1% in the past three months.
Stocks to Consider
Here, we have highlighted three better-ranked stocks from the same space.
The Zacks Consensus Estimate for Flowers Foods’ current financial year sales suggests growth of 6.7% from the year-ago period’s actuals. FLO has a trailing four-quarter earnings surprise of 7.6% on average.
The Kraft Heinz Company (KHC - Free Report) , a food and beverage product company, currently carries a Zacks Rank #2. KHC has a trailing four-quarter earnings surprise of 11.3% on average.
The Zacks Consensus Estimate for Kraft Heinz’s current fiscal-year sales suggests growth of 2.2% from the year-ago reported figure.
Post Holdings (POST - Free Report) , a consumer-packaged goods holding company, currently carries a Zacks Rank #2. POST has a trailing four-quarter earnings surprise of 59.6% on average.
The Zacks Consensus Estimate for Post Holdings’ current fiscal year’s sales suggests growth of 13.2% from the year-ago reported figure.
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Hormel Foods (HRL) Highlights Growth Targets at Investor Day
Hormel Foods Corporation (HRL - Free Report) highlighted its priorities and financial targets at the Investor Day conference held on Oct 12, 2023.
The company’s management underlined digital transformation, investments in new capacity and automation, and transformation and modernization efforts as the key components of its long-term value creation model. These priorities are strengthening its capabilities to deliver high values to customers and shareholders.
Hormel Foods updated its strategic priorities aligned with business segments, which are expected to drive earnings growth over the next three years. It will focus on driving growth in its retail business by maintaining a robust portfolio of brands with balanced exposure across diverse categories and investing in marketing, innovation and long-term growth. This will include directing its resources to fuel growth for the Planters snack nuts business. It expects incremental savings from a series of projects aimed at reducing costs and further synergies from the implementation of GoFWD.
HRL is focused on expanding its industry leadership in the Foodservice business by establishing digital leadership, growing key categories and extending its presence in convenience stores. The company plans to accelerate growth in certain key categories like bacon, pizza toppings, turkey and premium prepared proteins. Apart from this, management is focused on initiatives like One Supply Chain and Project Orion to accelerate growth.
The company plans to achieve organic net sales growth of 2-3% in the long run. It is also focused on growing its operating income by more than $250 million by 2026. This includes 5-7% growth from its current business and an operating income of $25 million through the transformation of its Jennie-O Turkey Store, and merger and acquisition synergies. It includes savings of more than $200 million through cost-reduction and supply-chain normalization efforts.
The company has been committed to increasing its cash flow to support dividend hikes, capital investment and debt paydown.
Zacks Rank & Price Performance
Hormel Foods, with a $17.9-billion market capitalization, currently carries a Zacks Rank #5 (Strong Sell). The company has been grappling with continued weakness in the International segment, alongside earnings pressure from heightened competition at the Retail business. It expects the overall consumer spending to remain under pressure in the United States, and adversely impact its top and bottom lines in fiscal 2023.
Image Source: Zacks Investment Research
The company’s shares have lost 18.6% compared with the industry’s decline of 9.1% in the past three months.
Stocks to Consider
Here, we have highlighted three better-ranked stocks from the same space.
Flowers Foods (FLO - Free Report) emphasizes providing high-quality baked items. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Flowers Foods’ current financial year sales suggests growth of 6.7% from the year-ago period’s actuals. FLO has a trailing four-quarter earnings surprise of 7.6% on average.
The Kraft Heinz Company (KHC - Free Report) , a food and beverage product company, currently carries a Zacks Rank #2. KHC has a trailing four-quarter earnings surprise of 11.3% on average.
The Zacks Consensus Estimate for Kraft Heinz’s current fiscal-year sales suggests growth of 2.2% from the year-ago reported figure.
Post Holdings (POST - Free Report) , a consumer-packaged goods holding company, currently carries a Zacks Rank #2. POST has a trailing four-quarter earnings surprise of 59.6% on average.
The Zacks Consensus Estimate for Post Holdings’ current fiscal year’s sales suggests growth of 13.2% from the year-ago reported figure.