Early Thursday saw a 1.4% increase in Hormel Foods Corp.’s stock as the parent company of Jennie-O and Spam brands reported fiscal first-quarter revenue that was better than anticipated, offsetting a profit shortfall.
The net income of Hormel (HRL), a company based in Austin, Minnesota, decreased from $218.7 million, or 40 cents per share, a year earlier to $170.6 million, or 31 cents per share, for the quarter ending January 26. After accounting for one-time items, EPS was 35 cents, which was less than the FactSet estimate of 38 cents.
Sales exceeded the $2.947 billion FactSet expectation, rising to $2.989 billion from $2.997 billion a year earlier.
According to CEO Jim Snee, the company’s main brands, including Spam, Applegate, and Jennie-O, helped boost revenues, and in the food service industry, it saw growth in a number of categories, most notably premium brands.
“We anticipate more advancements from the brand and are happy with the notable, sequential market recovery the Planters business produced in the first quarter. But as expected, the first quarter was difficult as we recovered from the disruption in the supply of snack nuts and finished a full year of market compression for whole bird turkeys,” Snee stated in prepared remarks.
Lower whole-bird turkey pricing, a Virginia Planters facility’s production halt, and decreased center-store and contract manufacturing volumes all plagued Hormel for the past year.
Due to a 2-cent loss on the sale of a noncore sow operation in the first quarter, the company has lowered its previous projection of $1.51 to $1.65 for fiscal 2025 EPS to a range of $1.49 to $1.63.
It is still anticipated that adjusted EPS will fall between $1.58 and $1.72.
The company anticipates between $11.9 billion and $12.2 billion in net sales.
It still anticipates 1% to 3% growth in organic revenue. Currency and acquisition effects are not included in organic sales.
Benefits from the company’s Transform & Modernize cost-cutting initiative are anticipated to be between $100 million and $150 million.
The FactSet consensus predicts $1.65 EPS on $12.1 billion in revenue.
Over the past 12 months, the stock has down 7%, but the S&P 500 SPX has increased 17.3%.
