The 10-second takeaway
For the quarter ended Jan. 29 (Q1), Hormel Foods met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share contracted.
Margins dropped across the board.
Hormel Foods reported revenue of $2.04 billion. The 14 analysts polled by S&P Capital IQ wanted to see a top line of $2.03 billion on the same basis. GAAP reported sales were 6.1% higher than the prior-year quarter's $1.92 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.48. The 12 earnings estimates compiled by S&P Capital IQ anticipated $0.48 per share. GAAP EPS of $0.48 for Q1 were 13% lower than the prior-year quarter's $0.55 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 16.5%, 300 basis points worse than the prior-year quarter. Operating margin was 9.1%, 280 basis points worse than the prior-year quarter. Net margin was 6.3%, 140 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $2.04 billion. On the bottom line, the average EPS estimate is $0.43.
Next year's average estimate for revenue is $8.28 billion. The average EPS estimate is $1.82.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 266 members out of 285 rating the stock outperform, and 19 members rating it underperform. Among 92 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 88 give Hormel Foods a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Hormel Foods is hold, with an average price target of $28.45.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.