Hormel: Time to Feast on the Dip as Yield Gets Tastier

Core Viewpoint - Hormel Foods Co. has faced challenges due to declining commodity prices, leading to a reduction in its full-year 2024 guidance, yet investors have shown strong interest in its shares following the earnings report [1][7][9]. Group 1: Company Overview - Hormel Foods is a global branded food company specializing in shelf-stable and refrigerated meat and poultry products, available in various retail and food service locations [1]. - The company was founded in 1891 and gained prominence with the introduction of SPAM in 1937, which remains a significant product in its portfolio [2][3]. Group 2: Financial Performance - In the fiscal third quarter, Hormel reported adjusted earnings of $0.37 per share, exceeding analyst expectations by $0.01 [6]. - Revenue decreased by 2.2% year-over-year to $2.9 billion, falling short of consensus estimates of $2.95 billion, primarily due to lower turkey prices and production disruptions [7]. - The international business saw a 78% year-over-year increase in profits, despite a 13% drop in volume and a 2% decline in net sales [8]. Group 3: Product Innovation and Brand Portfolio - Hormel has expanded its brand portfolio to include various products catering to changing consumer preferences, such as Applegate Natural & Organic Meats and Hormel Black Label Bacon [4]. - Recent product innovations include Hormel Golden Salted Egg Yolk Snackable Sausage and SPAM Korean Barbecue, which have contributed to growth [5]. Group 4: Guidance and Market Outlook - Hormel has narrowed its fiscal full-year 2024 EPS guidance to between $1.57 and $1.63, down from previous estimates, with expected revenue between $11.8 billion and $12.1 billion [9]. - The company anticipates that production disruptions will be resolved by the end of the fiscal year, improving operational capacity [10].