Vending

Hormel Foods suffers Q1 2023 sales, earnings declines

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March 2, 2023

Hormel Foods Corp. reported falling sales and earnings for Q1 2023 due to a continuously challenging operating environment, according to an earnings release.

Highlights include:

• Net sales fell 2.4%, from $3.04 billion in Q1 2022 to $2.97 billion in the quarter ending Jan. 29, 2023.
• Net earnings fell from $239.7 million to $217.6 million in the comparative quarters.
• Net earnings per share on both a basic and diluted basis fell from 44 cents to 40 cents in the respective quarters.
• Retail sales fell 1.9%, from $1.99 billion to $1.96 billion. Net sales growth from the convenient meals and proteins, bacon, global flavors and emerging brands verticals was offset by lower sales in the value-added meats and snacking and entertaining verticals. Net sales increased for products such as Hormel Black Label bacon, Columbus charcuterie, Hormel chili, Herdez salsa and sauces, Hormel Square Table entrees and Mary Kitchen hash. Lower sales of snack nuts and peanut butter offset a majority of these gains.
• Foodservice sales fell 2.3%, from $854 million to $834.7 million. Products in the sliced meats, pepperoni, premium prepared proteins and premium bacon and breakfast sausage categories grew volume and net sales for the quarter. Net sales declines can be partially attributed to lower net pricing reflecting commodity relief in certain categories.
• International sales fell 8.1%, from $194.3 million to $178.4 million. Volume and net sales growth from branded exports, including the Spam and Skippy brands, and improved results in Brazil, were partially offset by lower sales in China due to ongoing COVID-related disruption.

Shares traded today at $41.88 against a 52-week range of $40.72 to $55.11.

The approximately $3 billion in quarterly revenue missed analyst expectations by $80 million, while the GAAP EPS of 40 cents missed expectations by 5 cents, according to Seeking Alpha.

"The operating environment at the beginning of fiscal 2023 remained challenging," Jim Snee, chairman of the board, president and CEO, said in the press release. "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," Snee added. "We remain well positioned in the retail, foodservice and international channels, and expect to drive net sales growth in each of our segments this year."