Yahoo Finance A Recap of Hormel Foods’ Last Reported Quarter’s Performance
Will Hormel Foods Report Improved Fiscal 4Q15 Results?
Sales fell
Hormel Foods reported net revenue of $2.2 billion, compared to $2.3 billion in the corresponding quarter a year ago, a fall of 4%. The net revenue that excluded the incremental impact of CytoSport, Applegate, and MegaMex products that were not included in fiscal 2014 results fell by 10%. In comparison to fiscal 3Q14, the factors that lent a hand to the fall in sales in fiscal 3Q15 were lower pork prices, lower turkey supply, and the closure of the Precept Foods joint venture. The average analyst estimates for revenue in the fourth quarter of fiscal 2015 equal $2.5 billion.
Other key results of fiscal 3Q15
The company reported diluted EPS (earnings per share) of $0.54 and a non-GAAP (generally accepted accounting principles) diluted EPS of $0.56. It excluded the transaction costs of $8.6 million or $0.02 per share related to the Applegate Farms acquisition. Hormel reported operating profit of $231 million, an 8% rise compared to fiscal 3Q14. Hormel also recorded an increased gross profit of $409 million, or a 12% rise compared to fiscal 3Q14.
Hormel Foods reported fiscal 2015 third quarter non-GAAP net earnings of $152.5, an 11% rise from the net earnings of $138 million for the same period a year earlier. Non-GAAP diluted EPS for the quarter were $0.56, a 10% rise compared to the $0.51 per share for the same period in the prior year. The results excluded the Applegate acquisition’s transaction costs.
Capital expenditures for the third quarter of fiscal 2015 summed up to $41.8 million as compared to $34.8 million in the same period last year. The company anticipates capital expenditures to be in the range of ~$155–$165 million in fiscal 2015.
Management’s views on last quarter’s results
Jeffrey M. Ettinger, chairman of the board, president, and chief executive officer, stated, “Our balanced business model prevailed once again this quarter, as we were able to overcome the significant challenge of avian influenza in our Jennie-O Turkey Store segment to deliver record earnings and volume sales. I am pleased to welcome the Applegate team to Hormel Foods now that we finalized the acquisition in mid-July. Together we will expand our offerings in the high-growth natural and organic meat category, allowing us to reach even more consumers with the Applegate brand.”
Peer performance
Hormel’s competitors Campbell Soup (CPB), Bunge (BG), and Flowers Foods (FLO) recorded net margins of 4.0%, 2.2%, and 5.0%, respectively, in their last reported quarters. The Consumer Staples Select Sector SPDR ETF (XLP) invests 0.72% of its portfolio in HRL. Also, the iShares Morningstar Mid-Cap Value ETF (JKI) invests 0.64% of its portfolio in the CPB stock.
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