Shares of Hormel Foods Corp. shot up 8.2%, enough to pace the S&P 500’s gainers, after the branded food company reported Thursday fiscal second-quarter profit and sales that topped expectations, and raised its full-year outlook. The company’s brands include SPAM, Skippy, Hormel and Jennie-O turkey. Net income edged up to $227.9 million, or 42 cents a share, from $227.7 million, or 42 cents a share, in the year-ago period. The FactSet consensus for earnings per share was 41 cents. Sales grew 7.6% to a record $2.61 billion, above the FactSet consensus of $2.42 billion, as elevated demand, price actions and supply chain improvements helped offset margin pressure from higher costs. Gross margin fell to 18.3% from 19.7% as cost of products sold increased 9.5%. Volume fell 3% to 1.2 billion pounds. For Hormel’s business segments, refrigerated foods sales rose 17% and volume grew 3%, while grocery products sales fell 8% and volume declined 14%. For fiscal 2021, the company affirmed its EPS guidance of $1.70 to $1.82 but raised its sales guidance range to $10.20 billion to $10.80 billion from $9.70 billion to $10.30 billion. The stock, which is on track for a three-month closing high, had tacked on 6.7% year to date, while the S&P 500 has gained 10.5%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
