Shares of Hormel Foods Corp. HRL, -4.56% took 5.1% hit toward a more than 15-month low in premarket trading Thursday, after the branded foods company, with brands including Planters, Skippy, Spam and Natural Choice, reported fiscal first-quarter results that missed expectations, citing inflationary pressures, supply chain inefficiencies and weak sales volumes. Net income for the quarter to Jan. 29 fell to $217.7 million, or 40 cents a share, from $239.6 million, or 44 cents a share, in the year-ago period. The FactSet consensus was for earnings per share of 45 cents. Sales fell 2.4% to $2.97 billion, below the FactSet consensus of $3.08 billion, with both retail and foodservice sales down 2% but international sales down 8%. Volume declined 13% for retail, dropped 6% for foodservice and sank 14% for international. Cost of sales fell less than sales, down 1.2% to $2.48 billion, as gross margin contracted to 16.7% from 17.7%. For the full year, the company expects EPS of $1.70 to $1.82, below the FactSet consensus of $1.88, and expects sales growth of 1% to 3%, while the current FactSet consensus of $12.76 billion implies a 2.4% rise. The stock, on track to open at the lowest price seen since Nov. 30, 2021, has lost 8.0% over the past three months through Wednesday, while the S&P 500 SPX, +0.76% has declined 3.0%.
Hormel stock sinks toward 15-month low after earnings miss, amid inflation pressures, supply chain issues and volume weakness