By Ciara Linnane
Planters business is still suffering from a production snafu, while whole-bird turkey prices are still soft
Hormel Foods Corp.’s stock rose 1.4% early Thursday, after the parent of brands including Jennie-O and Spam reported better-than-expected fiscal first-quarter revenue, which offset a profit miss.
Austin, Minn.-based Hormel (HRL) had net income of $170.6 million, or 31 cents a share, for the quarter to Jan. 26, down from $218.7 million, or 40 cents a share, a year ago. Adjusted for one-time items, EPS came to 35 cents, below the 38-cent FactSet consensus.
Sales rose to $2.989 billion from $2.997 billion a year ago, ahead of the $2.947 billion FactSet consensus.
Chief Executive Jim Snee said sales were bolstered by flagship brands such as Spam, Applegate and Jennie-O, while in food service, the company achieved growth across several categories, notably premium brands.
“We are pleased with the significant, sequential market recovery the Planters business delivered in the first quarter and expect continued improvements from the brand. However, as anticipated, the first quarter was pressured as we continued to recover from the snack nuts supply disruption and lapped a full year of whole bird turkey market compression,” Snee said in prepared remarks.
Hormel has been beset by lower prices for whole-bird turkeys for the past year, a production interruption at a Planters facility in Virginia, and lower center-store and contract manufacturing volumes.
The company is now expecting fiscal 2025 EPS to range from $1.49 to $1.63, down from prior guidance of $1.51 to $1.65, solely due to a 2-cent loss on the sale of a noncore sow operation in the first quarter.
Adjusted EPS is still expected to range from $1.58 to $1.72.
The company is expecting net sales to range from $11.9 billion to $12.2 billion.
It still expects organic sales growth of 1% to 3%. Organic sales exclude the impact of currency and acquisitions.
The company is expecting benefits from its Transform & Modernize cost-cutting program to range from $100 million to $150 million.
The FactSet consensus is for EPS of $1.65 on revenue of $12.1 billion.
The stock has fallen 7% in the last 12 months, while the S&P 500 SPX has gained 17.3%.
-Ciara Linnane
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02-27-25 0709ET
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