Hormel Foods' fiscal first-quarter earnings fell more than Wall Street's estimates yet sales surpassed expectations, showcasing resilience amid challenges. The food manufacturer, known for the Planters snack nuts brand, disclosed adjusted earnings of $0.35 per share for the quarter ending January 26, down from $0.41 the prior year, and falling behind the FactSet-pollled consensus of $0.38.
Sales dipped to $2.99 billion from nearly $3 billion in the previous year but exceeded the Street's projection of $2.95 billion. In a recent statement, Chief Executive Jim Snee highlighted, "We achieved solid top-line results and are on track to deliver on our 2025 expectations. We made great progress against our key priorities and are confident in our ability to drive long-term, sustainable earnings growth." Hormel maintains its outlook for fiscal 2025, forecasting adjusted EPS in the range of $1.58 to $1.72 with sales between $11.9 billion and $12.2 billion.
The current Street expectations are set at a non-GAAP EPS of $1.65 and sales of $12.08 billion. In the first quarter of this fiscal year, revenue from retail products experienced a slight decline of 1.1%, totaling $1.89 billion, primarily attributed to decreased snack nuts sales due to production disruptions at the company's Suffolk, Virginia facility.
Conversely, foodservice sales rose by 1.9% to $930.2 million, propelled by "strong performance" in several categories, including premium prepared proteins, turkey, premium bacon, and breakfast sausage, according to Hormel. International sales saw a decrease of 2.4% amounting to $168.5 million, as gains in China and growth in exports of products like Spam luncheon meat and Skippy peanut butter were offset by declines in Brazil and reduced commodity turkey exports, as stated by the company.
The group noted a volume decline across all three segments. "We are encouraged by the significant sequential market recovery that the Planters business delivered in the first quarter and expect continued improvements from the brand," Snee noted. "However, as anticipated, the first quarter faced pressures while we recovered from the supply disruptions in snack nuts and dealt with a full year of market compression in whole bird turkey." Assessing its transformation plan, the company anticipates realizing between $100 million and $150 million in annual benefits during the ongoing fiscal year.
This plan is aimed at reshaping its supply chain, minimizing portfolio complexity, and investing in data and technology to enhance efficiency and growth..