AUSTIN, Minn. - Hormel Foods Corporation (NYSE: NYSE:HRL), a leading global branded food company, reported a solid start to fiscal 2024 with first-quarter earnings and revenue that surpassed Wall Street expectations.
The stock responded positively to the earnings release, with shares climbing 2.63%, indicating investor confidence in the company's performance and outlook.
The company posted adjusted earnings per share (EPS) of $0.41, which was $0.07 higher than the analyst estimate of $0.34. Revenue for the quarter reached $3 billion, exceeding the consensus estimate of $2.92 billion and representing a 1% increase from the same quarter last year.
The positive financial results were driven by volume growth across all business segments, with a notable 4% increase in total volume to 1.1 billion lbs. Despite a slight decrease in operating income by 2%, the adjusted operating income saw a 2% rise. The company's effective tax rate for the quarter was 23.4%, up from 22.6% in the previous year.
Jim Snee, chairman of the board, president, and chief executive officer, attributed the strong quarter to better-than-expected performance in each of the company's business segments and progress on its transformation and modernization initiative. Snee highlighted broad-based volume growth, the strength of Hormel's leading brands, robust demand for foodservice products, and momentum in the Planters® snack nuts business.
Looking ahead, Hormel reaffirmed its full-year guidance for fiscal 2024, projecting net sales growth of 1% to 3% and an adjusted diluted EPS range of $1.51 to $1.65. The company's guidance midpoint for EPS stands at $1.58, slightly below the analyst consensus of $1.64. For revenue, Hormel anticipates $12.2 to $12.5 billion, with the midpoint of $12.35 billion slightly below the consensus estimate of $12.406 billion.
In the Foodservice segment, volume and net sales increased by 8% and 9%, respectively, with segment profit rising by 10%. The International segment also saw an 11% increase in volume, although net sales were down by 3%, with segment profit marginally increasing by 0.6%.
Hormel's reaffirmed outlook reflects expectations for continued growth in Foodservice, improvements in the International business, and the impacts of pricing and innovation in Retail. The company's transformation and modernization initiative is expected to provide a modest benefit to net earnings.
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