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Will Hormel Foods' Marketing Shift Improve Return on Brand Spending?
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Key Takeaways
HRL is shifting Retail marketing toward digital channels and retailer media for targeted consumer engagement.
HRL's Planters and Jennie-O posted encouraging consumption gains.
HRL expects stronger marketing capabilities to improve spending efficiency.
Hormel Foods Corp. (HRL - Free Report) is continuing to reposition its Retail marketing investments toward retailer media and digital channels. The approach is designed to support more targeted, relevant and measurable consumer engagement while improving marketing effectiveness.
The transition is expected to continue through the fourth quarter as the company strengthens its marketing capabilities. Over time, Hormel expects these changes to improve the efficiency and effectiveness of marketing spending, enabling greater allocation toward higher-return, brand-building activities. The evolving strategy reflects an emphasis on optimizing marketing investments and improving consumer engagement through targeted initiatives.
Early results from e-commerce and digital media initiatives are encouraging, although management noted that the efforts remain in their initial stages. Planters delivered a strong quarter, supported by impactful in-store activations, continued brand investment and America250 limited-time flavor displays, which enhanced visibility and consumer engagement.
Hormel's priority brands continue to show encouraging consumer momentum. Jennie-O ground turkey and Hormel entrées recorded mid-to-high-single-digit consumption growth, while Applegate, Planters, Hormel Black Label Bacon and other portfolio businesses also reported consumption gains. Management expressed confidence in its protein-centric portfolio and ongoing changes to brand positioning and marketing, alongside increased investment in digital and e-commerce channels.
However, the financial benefits of the evolving strategy have yet to be fully established. Management noted that the timing of marketing and advertising investments, along with lower employee-related expenses, contributed to improved adjusted SG&A. It also emphasized maintaining cost discipline and directing spending toward the highest-return opportunities.
Overall, Hormel's evolving marketing strategy is aimed at strengthening consumer engagement and improving the effectiveness of advertising investments. Encouraging early results from digital initiatives and priority brands provide a positive foundation, while continued execution and stronger marketing capabilities are expected to support more efficient spending and higher-return brand-building activities over time.
The Zacks Rundown for HRL
The Zacks Rank #4 (Sell) company’s shares have lost 16.1% in the past three months compared with the industry’s 10.2% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, HRL trades at a forward price-to-earnings ratio of 14.46, higher than the industry’s average of 14.32.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HRL’s current and next fiscal year earnings implies a year-over-year increase of 8% and 3.6%, respectively.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
Lamb Weston Holdings, Inc. (LW - Free Report) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. LW 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 Lamb Weston's current fiscal-year sales indicates a decline of 0.5%, and the same for earnings indicates growth of 7.6% from the prior-year levels. Lamb Weston delivered a trailing four-quarter earnings surprise of 22.1%, on average.
Mama’s Creations, Inc. (MAMA - Free Report) , together with its subsidiaries, manufactures and markets fresh deli-prepared foods in the United States. MAMA currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for MAMA's current fiscal-year sales & earnings implies growth of 47.9% and 66.7%, respectively, from the year-ago actuals. MAMA delivered a trailing four-quarter negative earnings surprise of 121.7%, on average.
The J. M. Smucker Company (SJM - Free Report) operates as a health and wellness company that provides habit-based and coach-guided lifestyle solutions to address obesity and support a healthy life in the United States. SJM currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for SJM's current fiscal-year sales indicates a decline of 0.02%, and the same for earnings indicates growth of 17.1% from the prior-year levels. SJM delivered a trailing four-quarter earnings surprise of 13.8% on average.
View the Zacks #1 Rank List
Image: Bigstock
Will Hormel Foods' Marketing Shift Improve Return on Brand Spending?
Key Takeaways
Hormel Foods Corp. (HRL - Free Report) is continuing to reposition its Retail marketing investments toward retailer media and digital channels. The approach is designed to support more targeted, relevant and measurable consumer engagement while improving marketing effectiveness.
The transition is expected to continue through the fourth quarter as the company strengthens its marketing capabilities. Over time, Hormel expects these changes to improve the efficiency and effectiveness of marketing spending, enabling greater allocation toward higher-return, brand-building activities. The evolving strategy reflects an emphasis on optimizing marketing investments and improving consumer engagement through targeted initiatives.
Early results from e-commerce and digital media initiatives are encouraging, although management noted that the efforts remain in their initial stages. Planters delivered a strong quarter, supported by impactful in-store activations, continued brand investment and America250 limited-time flavor displays, which enhanced visibility and consumer engagement.
Hormel's priority brands continue to show encouraging consumer momentum. Jennie-O ground turkey and Hormel entrées recorded mid-to-high-single-digit consumption growth, while Applegate, Planters, Hormel Black Label Bacon and other portfolio businesses also reported consumption gains. Management expressed confidence in its protein-centric portfolio and ongoing changes to brand positioning and marketing, alongside increased investment in digital and e-commerce channels.
However, the financial benefits of the evolving strategy have yet to be fully established. Management noted that the timing of marketing and advertising investments, along with lower employee-related expenses, contributed to improved adjusted SG&A. It also emphasized maintaining cost discipline and directing spending toward the highest-return opportunities.
Overall, Hormel's evolving marketing strategy is aimed at strengthening consumer engagement and improving the effectiveness of advertising investments. Encouraging early results from digital initiatives and priority brands provide a positive foundation, while continued execution and stronger marketing capabilities are expected to support more efficient spending and higher-return brand-building activities over time.
The Zacks Rundown for HRL
The Zacks Rank #4 (Sell) company’s shares have lost 16.1% in the past three months compared with the industry’s 10.2% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, HRL trades at a forward price-to-earnings ratio of 14.46, higher than the industry’s average of 14.32.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for HRL’s current and next fiscal year earnings implies a year-over-year increase of 8% and 3.6%, respectively.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
Lamb Weston Holdings, Inc. (LW - Free Report) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. LW 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 Lamb Weston's current fiscal-year sales indicates a decline of 0.5%, and the same for earnings indicates growth of 7.6% from the prior-year levels. Lamb Weston delivered a trailing four-quarter earnings surprise of 22.1%, on average.
Mama’s Creations, Inc. (MAMA - Free Report) , together with its subsidiaries, manufactures and markets fresh deli-prepared foods in the United States. MAMA currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for MAMA's current fiscal-year sales & earnings implies growth of 47.9% and 66.7%, respectively, from the year-ago actuals. MAMA delivered a trailing four-quarter negative earnings surprise of 121.7%, on average.
The J. M. Smucker Company (SJM - Free Report) operates as a health and wellness company that provides habit-based and coach-guided lifestyle solutions to address obesity and support a healthy life in the United States. SJM currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for SJM's current fiscal-year sales indicates a decline of 0.02%, and the same for earnings indicates growth of 17.1% from the prior-year levels. SJM delivered a trailing four-quarter earnings surprise of 13.8% on average.