HORMEL FOODS Reports Strong First Quarter Earnings for FY2023.
March 5, 2023
Earnings report
HORMEL FOODS ($NYSE:HRL) reported their earnings results for the first quarter of FY2023, which ended on January 31 2023. The total revenue reported was USD 217.7 million, a decrease of 9.1% compared to the same period in the previous year. This decline was mainly due to lower meat prices and a decline in sales volume in its retail business. Despite this, the net income achieved was USD 2971.0 million, representing a 2.4% year-over-year decrease. In spite of the unfavorable market conditions, HORMEL FOODS managed to succeed in the first quarter of 2023.
This is mainly due to the company’s strategies to increase efficiency, reduce costs and provide value-added products to its customers. The company also showed strong financial performance, with a strong balance sheet and cash flow. Overall, HORMEL FOODS has performed well in the first quarter of FY2023 and is optimistic about its future prospects. The company is committed to continuing its strategic investments and delivering profitable growth in the coming quarters.
Market Price
The company’s stock opened at $42.6 and closed at $41.8, down 4.6% from the prior closing price of $43.8. Despite the drop in stock prices, the company’s financial performance was solid across all sectors of their business, leading to the strong quarter results. The company’s positive financial performance was driven by higher demand for their products, coupled with higher average prices per unit, leading to the strong first quarter results. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Hormel Foods. More…
| Total Revenues | Net Income | Net Margin |
| 12.39k | 978.13 | 7.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Hormel Foods. More…
| Operations | Investing | Financing |
| 954.85 | -659.83 | -504.24 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Hormel Foods. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 13.28k | 5.66k | 13.93 |
Key Ratios Snapshot
Some of the financial key ratios for Hormel Foods are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 9.2% | 3.2% | 10.6% |
| FCF Margin | ROE | ROA |
| 5.6% | 10.9% | 6.2% |
Analysis
GoodWhale recently conducted an analysis on HORMEL FOODS, a company focused on processed foods products. We looked at their performance over the past few years and classified them into a category of company known as ‘Rhinos’ – companies that have recorded moderate revenue or earnings growth. Considering HORMEL FOODS’ performance and our classification, we identified that this company may be of interest to value investors who are seeking a stable stock with strong fundamentals and a healthy dividend yield. While there may not be significant growth potential in this stock, the asset base, dividend, and profitability are all on a strong footing. What’s more, HORMEL FOODS scored a healthy 9/10 on our health score metric which assesses cashflows and debt and indicates that the company is capable of safely riding out any crisis without the risk of bankruptcy. More…
Peers
In the food industry, Hormel Foods Corp competes with JM Smucker Co, Fleury Michon, and Bell Food Group Ltd. These companies all produce similar products, so the competition is fierce. Hormel Foods Corp has an advantage because it is a well-established company with a strong brand.
– JM Smucker Co ($NYSE:SJM)
The J. M. Smucker Company has a market capitalization of $15.24 billion as of March 2022 and a return on equity of 7.19%. The company manufactures and markets branded food and beverage products in North America and internationally. Its products include coffee, peanut butter, shortening and oils, ice cream toppings, fruit spreads, syrups, and frozen desserts. The company was founded in 1879 and is headquartered in Orrville, Ohio.
– Fleury Michon ($LTS:0J75)
Fleury Michon is a French company that specializes in the production of prepared foods. The company has a market cap of 79.9 million as of 2022 and a return on equity of 1.6%. Fleury Michon is a publicly traded company listed on the Euronext Paris stock exchange. The company was founded in 1887 and is headquartered in Vire, France.
– Bell Food Group Ltd ($LTS:0RFX)
BFG Ltd’s market cap is 1.43B as of 2022 and has a ROE of 7.15%. The company is a food group that manufactures and supplies food products. It offers a range of products including meat, poultry, fish, vegetables, and desserts. The company has a strong presence in the UK and Ireland, with a network of over 30 manufacturing sites and a workforce of around 23,000 people.
Summary
Total revenue decreased by 9.1% to USD 217.7 million year-on-year, and net income decreased by 2.4% to USD 2971.0 million. The stock price moved down the same day of the announcement reflecting investors’ sentiment about the results. It is important for potential investors to consider this decrease in revenue and net income when analyzing their future financial performance.
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