Hormel Foods Corporation’s (HRL - Free Report) Jennie-O Turkey Store segment reopened its Willmar Avenue facility after voluntarily pausing operations due to the coronavirus pandemic. In this regard, the company restarted operations with a group of workers. Nevertheless, management plans to accelerate manufacturing in the upcoming days.
Additionally, the company hopes to continue undertaking all precautionary measures across its facilities to protect its workers amid the coronavirus spread. Following the plant’s reopening, all three Jennie-O Turkey Store manufacturing locations that were previously shut have resumed operations.
On May 8, the company reopened its Melrose facility after voluntarily pausing operations due to the coronavirus pandemic. In an earlier press release, Jennie-O Turkey Store announced that it had reopened its Benson Avenue facility in Willmar as well. This plant was also shut due to the outbreak in the region.
Notably, Jennie-O Turkey Store segment has been performing well for quite some time now. During first-quarter fiscal 2020, revenues in the Jennie-O Turkey Store segment rose 2.8% to $330.1 million, with volumes rising 8%. Sales were driven by improvements at commodity and whole-bird businesses along with better pricing. Segmental profit inched up 1.7% to $3.6 million, owing to increased commodity profits and operational gains during the first quarter.
Other Factors Driving Hormel Foods’ Growth
Apart from Jennie-O Turkey Store, Hormel Foods’ Refrigerated Foods category is steadily growing on the back of strong brand portfolio and effective strategies. Notably, sales in the segment rose 5.7% year over year in first-quarter and volumes rose 3%. The upside was driven by products like Hormel Bacon 1 and Hormel Fire Braised as well as retail sales of Hormel Black Label and Hormel Cure 81 brands. Also, improved deli sales of Hormel Gatherings party trays along with Applegate branded products contributed to the upside. Moreover, segmental profit increased 2.9% to $167.3 million on increased commodity profits.
Moreover, Hormel Foods intends to strengthen its business on the back of strategic acquisitions. Recently, the company acquired a Texas-based pit-smoked meats company, Sadler's Smokehouse. The buyout is in sync with Hormel Foods’ initiatives to strengthen position in foodservice. Also, the company plans to expand the Sadler's product line into its retail and deli channels. Further, the buyouts of Columbus (completed on Nov 27, 2017) and Fontanini (completed on Aug 17, 2017) have been aiding performance in the Refrigerated Foods segment.
On the back of these upsides, shares of the Zacks Rank #3 (Hold) company have rallied 25% in the past year against the industry’s decline of 1.2%.
Solid Food Stocks
General Mills (GIS - Free Report) has a long-term earnings growth rate of 7.5% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Campbell Soup Company (CPB - Free Report) has a long-term earnings growth rate of 7.2% and a Zacks Rank #2.
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