Wednesday, February 8, 2023
HomeMarketHormel Foods Stock Drops as Sales Forecast Falls Short

Hormel Foods Stock Drops as Sales Forecast Falls Short

Hormel Foods reported diluted fourth-quarter earnings of 51 cents a share, while analysts had anticipated 50 cents.

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Daniel Acker/Bloomberg

Hormel Foods
stock was lower early Wednesday after the company reported fourth-quarter earnings that were a bit better than analysts expected, but forecast weaker 2023 sales than anticipated.

The company posted fourth-quarter diluted earnings of 51 cents a share, while Wall Street analysts had penciled in 50 cents a share. For fiscal 2022, the company saw record net sales of $12.5 billion, slightly missing analyst expectations. Net sales were boosted by increased demand and higher prices. Revenue from the Planters snack nuts business, acquired in June 2021, helped boost sales relative to fiscal 2021, the company said.

Hormel (ticker: HRL) predicted $12.6 billion to $12.9 billion in net sales for 2023 with diluted earnings per share of $1.83 to $1.93, a forecast that includes higher pension expenses and higher costs for its turkey business. Analysts had predicted $13.1 billion in net sales.

“We expect to operate in a volatile, complex and high-cost environment again in fiscal 2023,” CEO Jim Snee said. “We have benefited from our balanced business model, which is not heavily dependent on any one channel, protein, input or product category. “

In its fourth quarter, which included one week less than last year, profit from refrigerated foods declined 15% year over year, due to higher operational costs. Grocery products profit dropped 8% due to “continued inflationary pressures,” the company said. Profits from Hormel’s Jennie-O Turkey stores soared nearly 150%, partly the result of higher pricing, but earnings from the international business declined 4%. 

Hormel shares fell 7.1% to $44.77 in premarket trading Wednesday.

Write to Emily Dattilo at emily.dattilo@dowjones.com

Credit: marketwatch.com

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