Hormel Foods Earnings: What To Look For From HRL

Packaged foods company Hormel (NYSE:HRL) will be reporting earnings this Thursday before the bell. Here’s what to expect.

Hormel Foods met analysts’ revenue expectations last quarter, reporting revenues of $2.97 billion, up 2.5% year on year. It was a satisfactory quarter for the company, with a solid beat of analysts’ gross margin estimates.

Is Hormel Foods a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, the market is expecting Hormel Foods’s revenue to be flat year on year, slowing from the 4.6% increase it recorded in the same quarter last year.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Hormel Foods has missed Wall Street’s revenue estimates multiple times over the last two years.

Looking at Hormel Foods’s peers in the shelf-stable food segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Lamb Weston delivered year-on-year revenue growth of 5.6%, beating analysts’ expectations by 4.8%, and Hershey reported revenues up 6.6%, topping estimates by 5.7%. Lamb Weston traded up 8% following the results while Hershey was down 4.8%.

Read our full analysis of Lamb Weston’s results here and Hershey’s results here.

There has been positive sentiment among investors in the shelf-stable food segment, with share prices up 2.1% on average over the last month. Hormel Foods is down 8.8% during the same time and is heading into earnings with an average analyst price target of $27.25 (compared to the current share price of $23.77).

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