NEW YORK – Hormel Foods Corporation (NYSE:) reported modest second-quarter earnings per share (EPS) growth of $0.38 versus analysts’ expectations of $0.36. Despite this, the company’s revenue fell slightly short of consensus estimates at $2.89 billion, compared to expectations of $2.97 billion.
Shares reacted positively to the news, rising 2.6% as investors reacted to the earnings forecast upgrade.
The company’s results reflect a mixed financial picture, with net sales down from $2.98 billion in the same quarter last year. Operating income also decreased, from $296 million to $252 million. However, adjusted operating income was $276 million, and operating cash flow increased 13% for the quarter.
Jim Snee, Chairman, President and Chief Executive Officer, highlighted the company’s resilience, stating, “We delivered strong results in the first half, with consecutive quarters of better-than-expected earnings, significant improvement in operating cash flows and continued strength in food service, the recovery of our international business and stable volumes across our entire business.”
Snee also highlighted the company’s progress on strategic initiatives and its commitment to delivering long-term shareholder returns and growth.
In light of strong first-half results, Hormel raised its full-year earnings forecast. The company now expects fiscal 2024 adjusted diluted net earnings per share to be between $1.55 and $1.65, a slight adjustment from the previous range of $1.51 to $1.65.
This updated forecast is above the $1.58 midpoint of analyst consensus. For fiscal 2024, revenue is forecast to be between $12.2 billion and $12.5 billion, closely matching the consensus estimate of $12.27 billion.
Hormel Foods’ updated guidance reflects the company’s confidence in continued growth in its foodservice and international sales segments, improvements across its supply chain and benefits from transformation and modernization initiatives.
As the company moves forward, Snee assures, “Our team remains focused on growing operating income, delivering savings through our transformation and modernization initiative, and generating additional returns on our investments.”
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