What Happened?
Shares of packaged foods company Hormel (NYSE: HRL) fell 13.4% in the morning session after the company reported second-quarter earnings that missed analyst expectations and provided a soft profit outlook.
Although Hormel's revenue of $3.03 billion surpassed forecasts, its adjusted earnings of $0.35 per share fell short of the $0.41 consensus estimate. The weaker results were compounded by an adjusted EBITDA that also missed analyst estimates by 17.1%. Looking ahead, the company lowered its full-year adjusted earnings guidance to $1.44 per share at the midpoint. Additionally, its revenue guidance for the upcoming third quarter came in below expectations, signaling ongoing challenges for the packaged foods company.
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What Is The Market Telling Us
Hormel Foods’s shares are not very volatile and have only had 1 move greater than 5% over the last year. Moves this big are rare for Hormel Foods and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock dropped 10.3% on the news that the company reported second-quarter earnings results. Its revenue unfortunately missed analysts' expectations, and its full-year revenue guidance missed Wall Street's estimates. The lowered guidance is expected to reflect a number of factors, including "lower-than-expected commodity markets, production disruptions at its Suffolk, Virginia, facility, and declines in its contract manufacturing business." Overall, this was a mediocre quarter.
Hormel Foods is down 19.7% since the beginning of the year, and at $25.33 per share, it is trading 24.5% below its 52-week high of $33.55 from December 2024. Investors who bought $1,000 worth of Hormel Foods’s shares 5 years ago would now be looking at an investment worth $500.30.
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