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Hormel Foods Corporation (HRL - Free Report) delivered solid first-quarter fiscal 2024 results, with the top and the bottom line increasing from the year-ago quarter’s level. The company’s net sales and earnings surpassed the Zacks Consensus Estimate.
Results gained from broad-based volume growth across businesses, reflecting gains from strong brands, demand for foodservice products and momentum in the Planter snack nuts business. The company’s impressive execution of strategic priorities coupled with improvements in the supply chain are key drivers.
Quarter in Detail
Hormel Foods’ adjusted earnings of 41 cents per share surpassed the Zacks Consensus Estimate of 34 cents. Earnings came in at 40 cents per share in the same period last year.
Net sales of $2,996.9 million increased 0.9% year over year and came above the Zacks Consensus Estimate of $2,937.8 million.
Hormel Foods Corporation Price, Consensus and EPS Surprise
The gross profit came in at $508.7 million, up from $495.9 million reported in the year-ago quarter.
Selling, general and administrative (SG&A) expenses stood at $240.4 million, an increase from $222.1 million reported in the year-ago quarter.
The adjusted operating income of $295 million increased 2% year over year. The adjusted operating margin came in at 9.8%.
Segmental Details
Net sales in the Retail unit dropped 2.4% year over year to $1,911.3 million. The downside was caused by reduced contract manufacturing volume and commodity turkey pricing. Total volumes were up 1.7%, fueled by global flavors, value-added meats, emerging brands and bacon verticals. Segment profit went down 3% in the quarter.
Net sales in the Foodservice segment increased 9.4% to $913.1 million, with volumes up 8%. The upside was backed by broad-based growth in several categories, led by Jennie-O turkey and double-digit growth for products like Hormel Bacon 1 cooked bacon, pepperoni and Austin Blues smoked meats, among others. Segment profit jumped 10% in the quarter.
Net sales in the International unit fell 3.3% year over year to $172.6 million, whereas volumes rose 10.9%. The sales decline resulted from reduced branded export sales and soft sales in China. Increased commodity exports backed the volume increase. Segment profit inched up 1%.
Other Financial Details
The company ended the quarter with cash and cash equivalents of $963.2 million and total long-term debt (excluding current maturities) of $2,357.2 million.
For the quarter ended Jan 28, 2024, cash flow from operating activities was almost $404 billion, while capital expenditures were $47 million.
Image Source: Zacks Investment Research
Guidance
Fiscal 2024 sales are still anticipated to rise 1-3%. This guidance assumes volume increases in core categories, greater brand support and innovation, gains from additional pricing actions and current expectations for raw material input costs.
Management still envisions fiscal 2024 adjusted earnings per share in the $1.51-$1.65 range compared with $1.61 delivered in the fiscal 2023. Hormel Foods anticipates the bottom line to decline in the fiscal second quarter and grow in the second half of fiscal 2024. The fiscal 2024 guidance assumes a major year-over-year decline across whole bird turkey markets.
The company expects a fiscal 2024 effective tax rate of 21-23%.
Shares of this Zacks Rank #4 (Sell) company have dropped 8.1% in the past six months compared with the industry’s decline of 4.5%.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings suggests growth of 15.2% and 3.4%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2 (Buy). VITL has a trailing four-quarter average earnings surprise of 145%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales indicates growth of 29% from the year-ago reported actuals.
Lamb Weston Holdings, Inc. (LW - Free Report) is a leading global manufacturer, marketer and distributor of value-added frozen potato products. LW currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggest growth of 28.3% and 26.9%, respectively, from the year-ago reported numbers. LW has a trailing four-quarter average earnings surprise of 28.8%.
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Hormel Foods (HRL) Q1 Earnings & Sales Beat Estimates, Up Y/Y
Hormel Foods Corporation (HRL - Free Report) delivered solid first-quarter fiscal 2024 results, with the top and the bottom line increasing from the year-ago quarter’s level. The company’s net sales and earnings surpassed the Zacks Consensus Estimate.
Results gained from broad-based volume growth across businesses, reflecting gains from strong brands, demand for foodservice products and momentum in the Planter snack nuts business. The company’s impressive execution of strategic priorities coupled with improvements in the supply chain are key drivers.
Quarter in Detail
Hormel Foods’ adjusted earnings of 41 cents per share surpassed the Zacks Consensus Estimate of 34 cents. Earnings came in at 40 cents per share in the same period last year.
Net sales of $2,996.9 million increased 0.9% year over year and came above the Zacks Consensus Estimate of $2,937.8 million.
Hormel Foods Corporation Price, Consensus and EPS Surprise
Hormel Foods Corporation price-consensus-eps-surprise-chart | Hormel Foods Corporation Quote
The gross profit came in at $508.7 million, up from $495.9 million reported in the year-ago quarter.
Selling, general and administrative (SG&A) expenses stood at $240.4 million, an increase from $222.1 million reported in the year-ago quarter.
The adjusted operating income of $295 million increased 2% year over year. The adjusted operating margin came in at 9.8%.
Segmental Details
Net sales in the Retail unit dropped 2.4% year over year to $1,911.3 million. The downside was caused by reduced contract manufacturing volume and commodity turkey pricing. Total volumes were up 1.7%, fueled by global flavors, value-added meats, emerging brands and bacon verticals. Segment profit went down 3% in the quarter.
Net sales in the Foodservice segment increased 9.4% to $913.1 million, with volumes up 8%. The upside was backed by broad-based growth in several categories, led by Jennie-O turkey and double-digit growth for products like Hormel Bacon 1 cooked bacon, pepperoni and Austin Blues smoked meats, among others. Segment profit jumped 10% in the quarter.
Net sales in the International unit fell 3.3% year over year to $172.6 million, whereas volumes rose 10.9%. The sales decline resulted from reduced branded export sales and soft sales in China. Increased commodity exports backed the volume increase. Segment profit inched up 1%.
Other Financial Details
The company ended the quarter with cash and cash equivalents of $963.2 million and total long-term debt (excluding current maturities) of $2,357.2 million.
For the quarter ended Jan 28, 2024, cash flow from operating activities was almost $404 billion, while capital expenditures were $47 million.
Image Source: Zacks Investment Research
Guidance
Fiscal 2024 sales are still anticipated to rise 1-3%. This guidance assumes volume increases in core categories, greater brand support and innovation, gains from additional pricing actions and current expectations for raw material input costs.
Management still envisions fiscal 2024 adjusted earnings per share in the $1.51-$1.65 range compared with $1.61 delivered in the fiscal 2023. Hormel Foods anticipates the bottom line to decline in the fiscal second quarter and grow in the second half of fiscal 2024. The fiscal 2024 guidance assumes a major year-over-year decline across whole bird turkey markets.
The company expects a fiscal 2024 effective tax rate of 21-23%.
Shares of this Zacks Rank #4 (Sell) company have dropped 8.1% in the past six months compared with the industry’s decline of 4.5%.
Solid Food Stocks
Post Holdings (POST - Free Report) , which operates as a consumer packaged goods holding company, sports a Zacks Rank #1 (Strong Buy). POST has a trailing four-quarter earnings surprise of 52.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings suggests growth of 15.2% and 3.4%, respectively, from the year-ago reported numbers.
Vital Farms Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. It currently carries a Zacks Rank #2 (Buy). VITL has a trailing four-quarter average earnings surprise of 145%.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales indicates growth of 29% from the year-ago reported actuals.
Lamb Weston Holdings, Inc. (LW - Free Report) is a leading global manufacturer, marketer and distributor of value-added frozen potato products. LW currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Lamb Weston’s current financial-year sales and earnings suggest growth of 28.3% and 26.9%, respectively, from the year-ago reported numbers. LW has a trailing four-quarter average earnings surprise of 28.8%.