NEW YORK - Hormel Foods Corporation (NYSE:HRL) reported a modest beat on its second-quarter earnings per share (EPS), delivering $0.38 against analysts' expectations of $0.36. Despite this, the company's revenue fell slightly short of the consensus, coming in at $2.89 billion compared to the anticipated $2.97 billion.
The stock responded positively to the news, rising 2.6% as investors reacted to the raised profit outlook.
The company's performance reflects a mixed financial picture, with net sales declining from $2.98 billion in the same quarter last year. Operating income also saw a downturn, dropping from $296 million to $252 million. However, adjusted operating income stood at $276 million, and the quarter-to-date cash flow from operations rose by 13%.
Jim Snee, chairman of the board, president, and chief executive officer, highlighted the company's resilience, stating, "We delivered a strong first half, with consecutive quarters of better-than-expected earnings, a significant improvement in operating cash flows, continued Foodservice strength, recovery in our International business and stable volumes across our business."
Snee also emphasized the company's progress on strategic initiatives and its commitment to driving long-term shareholder returns and growth.
In light of the solid performance in the first half of the year, Hormel has raised its full-year earnings outlook. The company now expects an adjusted diluted net EPS of $1.55 to $1.65 for fiscal year 2024, a slight adjustment from the previous range of $1.51 to $1.65.
This updated guidance is above the midpoint of the analyst consensus of $1.58. The forecasted revenue for FY2024 is set to be between $12.2 billion and $12.5 billion, aligning closely with the consensus estimate of $12.27 billion.
Hormel Foods' updated guidance reflects its confidence in continued growth from its Foodservice and International segments, improvements across its supply chain, and benefits from its transformation and modernization initiatives.
As the company moves forward, Snee assures, "Our team remains focused on growing operating income, driving savings through our transform and modernize initiative, and capturing incremental value from our investments."
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