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Shares of Hormel Foods Corp. rallied toward an eight-week high Thursday, after the food company, which has brands including Skippy, Spam, Dinty Moore and La Victoria, reported fiscal first-quarter results that beat expectations as demand increased across its business segments.
“We are especially encouraged by broad-based volume growth across our businesses, reflecting the strength of our leading brands, robust demand for our foodservice products and momentum in our Planters snack nuts business,” said Chief Executive Jim Snee.
The stock
HRL,
climbed 5.8% in premarket trading, to put it on track to open at the highest price seen since Jan. 4. It was the S&P 500 index’s best performer ahead of the open.
Net income for the quarter to Jan. 28 was $218.9 million, or 40 cents a share, after net income of $217.7 million, or 40 cents a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share of 41 cents beat the FactSet consensus of 34 cents.
Sales grew 0.9% to $3.00 billion, above the FactSet consensus of $2.91 billion, as volume increased 4%.
Among Hormel’s business segments, retail saw volume increase 2% but sales fall 2% and profit decline 3%. Strong demand for many products, including Skippy peanut butter, Planters snack nuts and Wholly dips, was offset by lower turkey pricing and lower earnings from MegaMex Foods.
Meanwhile, food-service volume jumped 8% and sales leaped 9%, amid strength in products including Jennie-O turkey and Hormel Bacon 1 cooked bacon. International saw gains of 11% for volume due to higher commodity exports, but a 3% decline for sales due to weakness in China.
For the full year, the company affirmed its adjusted EPS guidance of $1.51 to $1.65, which surrounds the FactSet consensus of $1.54. The company expects sales of $12.2 billion to $12.5 billion, compared with Wall Street expectations of $12.16 billion.
The stock has gained 1.2% over the past three months through Wednesday, while the S&P 500
SPX,
has advanced 11.4%.
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