Hormel Foods Q2 Earnings Meet Estimates, Sales Increase Y/Y

Hormel Foods Corporation HRL reported second-quarter fiscal 2025 results. The bottom line declined year over year and met the Zacks Consensus Estimate, while the top line improved and missed the same. Hormel Foods posted adjusted earnings of 35 cents per share, which were in line with the Zacks Consensus Estimate. The bottom line decreased from 38 cents reported in the year-ago quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Hormel Foods Corporation Price, Consensus and EPS Surprise  Hormel Foods Corporation price-consensus-eps-surprise-chart | Hormel Foods Corporation QuoteNet sales of $2,898.8 million increased 0.4% from $2,887.4 million in the year-ago quarter. However, the metric missed the consensus mark of $2,905 million. Volumes declined 5.7% in the reported quarter.HRL’s Quarterly Results: Key Metrics & InsightsHormel Foods’ gross profit was $484.4 million, down from $503.8 million reported in the year-ago quarter.Adjusted selling, general and administrative expenses were $237.7 million for the quarter, a decrease from $244.9 million in the year-ago period.Adjusted operating income was $264.9 million, a decrease from $275.9 million in the same quarter last year. Adjusted operating margin was 9.1%, down from 9.6% reported in the year-ago quarter.HRL Provides Q2 Revenue & Profit Insights by SegmentNet sales in the Retail unit decreased 0.3% year over year to $1,783.8 million, with volumes falling 6.6%. High single-digit growth in Mexican portfolio and value-added turkey products was largely offset by the timing of promotions. Approximately two-thirds of the Retail segment’s volume decline was attributed to lower commodity shipments and contract manufacturing. Flagship and emerging brands maintained leadership in their respective categories. Notably, the Planters brand outperformed expectations in both volume and net sales, while demand for Jennie-O lean ground turkey remained strong. Segment profit increased 3.6%, driven by operational efficiencies from the T&M initiative and lower selling, general and administrative expenses.Net sales in the Foodservice segment increased 0.5% to $936.4 million, with organic net sales rising 4% and volumes down 7.3%. Growth in organic net sales was broad-based, driven by strong performance in the customized solutions business and the turkey portfolio. Branded products, including Jennie-O, Hormel Fire Braised meats and Café H globally inspired proteins, delivered another solid quarter of volume and net sales growth. Despite softness across the industry, several categories posted volume gains, which were more than offset by a reduction in commodity shipments.Segment profit declined 5.8%, as increased net sales were outweighed by margin pressures, particularly within non-core businesses. The Foodservice segment continued to benefit from an extensive range of solutions-based products, a strong direct-selling organization and a diversified channel presence.Net sales in the International unit increased 7% year over year to $178.5 million, whereas volumes increased 8.9%. Growth was driven by double-digit volume and net sales increases in exports, as well as continued momentum in China’s market. Export growth was led by strong shipments of refrigerated products, particularly bacon and pepperoni. In China, both the retail and foodservice channels contributed to performance, supported by successful new product launches.Segment profit decreased 20.7%, primarily due to an unfavorable shift in export customer mix and continued softness in Brazil.Hormel Foods’ Financial Health SnapshotThis Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of $669.7 million and total long-term debt (excluding current maturities) of $2,850.7 million. In the fiscal second quarter, cash flow from operations was $56.4 million.Hormel Foods prioritizes returning capital to its shareholders. The company returned nearly $159 million to its shareholders via dividends. Image Source: Zacks Investment Research What to Expect From HRL in FY25?Hormel Foods now expects fiscal 2025 net sales to be between $12 billion and $12.2 billion compared with its prior outlook of $11.9 billion to $12.2 billion. Organic net sales growth is now projected at 2% to 3%, up from the previous range of 1% to 3%.The company now anticipates operating income to be between $1,118 million and $1,185 million, while adjusted operating income is expected to be in the range of $1,175 million to $1,248 million in fiscal 2025. Earlier, it anticipated operating income to be between $1,118 million and $1,212 billion, while adjusted operating income was expected to be in the range of $1,175 million to $1,275 million.Hormel now projects full-year diluted earnings per share (EPS) to be between $1.49 and $1.59, narrowed from its previous range of $1.49 to $1.63. Adjusted EPS is expected to be between $1.58 and $1.68, revised from the earlier range of $1.58 to $1.72.Hormel Foods targets capital expenditures of $275 million to $300 million, and expects depreciation and amortization expenses of approximately $265 million in fiscal 2025.The HRL stock has risen 5.9% in the past three months against the industry’s decline of 1.8%.Some Better-Ranked StocksNomad Foods Limited NOMD manufactures, markets and distributes a range of frozen food products in the United Kingdom and internationally. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The Zacks Consensus Estimate for Nomad Foods' current fiscal-year sales and earnings implies growth of 4.6% and 7.3%, respectively, from the prior-year levels. NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average.BRF S.A. BRFS raises, produces and slaughters poultry and pork for the processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products. It currently carries a Zacks Rank of 2 (Buy). BRFS delivered a trailing four-quarter earnings surprise of 5.4%, on average.The Zacks Consensus Estimate for BRF S.A.'s current fiscal-year sales and earnings implies growth of 0.3% and 11.1%, respectively, from the prior-year levels.Oatly Group AB OTLY, an oatmilk company, provides a range of plant-based dairy products made from oats. It presently carries a Zacks Rank of 2. OTLY delivered a trailing four-quarter earnings surprise of 25.1%, on average.The consensus estimate for Oatly Group’s current fiscal-year sales and earnings implies growth of 2.7% and 65.8%, respectively, from the year-ago figures.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hormel Foods Corporation (HRL): Free Stock Analysis Report BRF S.A. (BRFS): Free Stock Analysis Report Nomad Foods Limited (NOMD): Free Stock Analysis Report Oatly Group AB Sponsored ADR (OTLY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks