Hormel Foods Clocks 24% Sales Growth In Q1, Reaffirms FY22 Forecast

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Hormel Foods Corp HRL reported first-quarter FY22 sales growth of 24% year-on-year, to $3.04 billion, beating the consensus of $2.93 billion. Organic net sales improved 13%.
EPS of $0.44 was in line with Street view.
The gross margin contracted 60 basis points Y/Y to 17.7%. The operating margin was 10.5%, and operating income for the quarter rose 19% Y/Y to $319.7 million.
Selling, general and administrative expenses increased 15.1% Y/Y to $225.9 million.
The company held $846.6 million in cash and equivalents as of January 30, 2022. Cash provided by operating activities for the quarter totaled $383.7 million.
"From a bottom-line perspective, the intentional actions we have taken to offset inflationary pressures are working. These actions include pricing, improving promotional effectiveness, and shifting to a more profitable mix," said chairman, president, and CEO Jim Snee.
Outlook: Hormel reaffirmed its FY22 sales outlook of $11.7 billion - $12.5 billion versus the consensus of $12.23 billion and EPS guidance of $1.87 - $2.03 against the consensus of $1.95.
Price Action: HRL shares closed lower by 1.69% at $47.64 on Monday.