- Hormel Foods Corp HRL reported a first-quarter FY23 sales decline of 2.4% year-on-year to $2.97 billion, missing the consensus of $3.07 billion.
- Net sales for Retail decreased 1.9% Y/Y, Foodservice fell 2.3%, and International declined 8.1%.
- EPS of $0.40 missed the analyst consensus of $0.45.
- Gross margin contracted 100 basis points Y/Y to 16.7%. The operating margin was 9.7%, and operating income for the quarter fell 9.5% to $289.5 million.
- Selling, general and administrative expenses decreased by 1.7% Y/Y to $222.1 million.
- The company held $617.6 million in cash and equivalents as of Jan. 29, 2023. Cash provided by operating activities for the quarter totaled $204 million.
- “While many areas of the business performed ahead of last year, our results were disappointing and below our expectations, reflecting the persistent impact from inflationary pressures, supply chain inefficiencies and lower-than-expected sales volumes across our business segments,” said the chairman and CEO Jim Snee.
- Outlook: Hormel sees FY23 net sales growth of 1% – 3%, consistent with its previous guidance.
- HRL reduced its FY23 EPS outlook from $1.83-$1.93 to $1.70-$1.82 versus the consensus of $1.89.
- Price Action: HRL shares are trading lower by 3.03% at $42.50 in the premarket on the last check Thursday.
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