Hormel Foods Q3 Profit Misses Street, Sees Q4 Below Market; Cuts FY25 Earnings View; Stock Drops

Hormel Foods

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(RTTNews) - Hormel Foods Corp. (HRL), while reporting higher third-quarter earnings but below market estimates, on Thursday issued fourth-quarter outlook, also below the Street. Further, the firm trimmed its earnings outlook for fiscal 2025, expecting to miss the market.

In the pre-market activity on the NYSE, Hormel Foods shares were losing around 7.7 percent to trade at $26.80.

Jeff Ettinger, interim chief executive officer, said, "The third quarter demonstrated the relevance of our portfolio, evidenced by our strong organic volume and net sales performance across each of our segments. Our earnings results, however, were disappointing, and we fell short of our expectations. The steep rise in commodity input costs affecting our industry was the largest contributor to our shortfall.... Regarding the fourth quarter, we expect continued net sales growth supported by our leading positions in the marketplace."

The company added that it expects profit recovery to lag into next year, with the near-term pressures in the third quarter persisting through the fourth quarter.

Looking ahead, for the fourth quarter, the company projects earnings per share of $0.36 to $0.38 and adjusted earnings per share of $0.38 to $0.40, on net sales of $3.15 billion to $3.25 billion.

Organic net sales growth is expected in the range of 1 percent to 4 percent.

The Wall Street analysts on average expect the company to report earnings of $0.49 per share on sales of $3.25 billion. Analysts' estimates typically exclude special items.

Further, for fiscal 2025, the company now expects earnings per share of $1.33 to $1.35, compared to previously expected $1.49 to $1.59.

Adjusted earnings per share is now projected to be $1.43 to $1.45, compared to $1.58 to $1.68 per share expected earlier.

Analysts expect earnings of $1.60 per share for the year.

In the third quarter, Hormel Foods' net earnings came in at $183.74 million or $0.33 per share, compared to $176.70 million or $0.32 per share last year.

Adjusted earnings were $195.01 million or $0.35 per share for the period, compared to $200.59 million or $0.37 per share last ear.

The company's net sales for the period rose 4.6 percent to $3.032 billion from $2.898 billion last year.

Analysts expected earnings of $0.41 per share on sales of $2.98 billion for the quarter.

Organic net sales grew 6 percent.

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