Hormel stock falls after sales miss and downbeat outlook, as 'high-cost' environment to continue
Shares of Hormel Foods Corp. dropped 1.9% in premarket trading Wednesday, after the meat and food products company topped fiscal fourth-quarter profit forecasts but fell short on sales and provided a downbeat outlook, citing expectations of a continued "volatile, complex and high-cost environment." Net income for the quarter to Oct. 30 was $279.9 million, or 51 cents a share, compared with $281.7 million, or 51 cents a share, in the year-ago period. The FactSet consensus for earnings per share was 50 cents. Sales slipped 5.0% to $3.28 billion, below the FactSet consensus of $3.38 billion. In grocery products, volume fell 4% while sales increased 3%, amid strong demand for SKIPPY peanut butter and increased prices, while refrigerated foods volume dropped 19% and sales declined 7%. Cost of products sold fell 5.5% to $2.72 billion, as gross margin improved to 17.3% from 16.7%. For fiscal 2023, the company expects EPS of $1.83 to $1.93, compared with the FactSet consensus of $2.01, and projects sales of $12.6 billion to $12.9 billion, which is below consensus expectations of $13.05 billion. The stock has lost 4.9% over the past three months through Tuesday, while the S&P 500 has eased 0.7%.
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