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Jan 29, 2023
Hormel Q1 2023 Earnings Report
Hormel's first quarter results for fiscal year 2023 were impacted by inflationary pressures, supply chain inefficiencies, and lower-than-expected sales volumes.
Key Takeaways
Hormel Foods Corporation reported first quarter fiscal 2023 results with net sales of $3.0 billion and operating income of $289 million. The company faced challenges including inflationary pressures and supply chain inefficiencies, impacting sales volumes across business segments.
Net sales reached $3.0 billion.
Operating income was reported at $289 million with a 9.7% operating margin.
Diluted net earnings per share were $0.40.
Cash flow from operations totaled $204 million.
Hormel
Hormel
Forward Guidance
The Company expects net sales growth of 1-3% compared to last year and full-year diluted net earnings per share are now expected to be $1.70 to $1.82 per share.
Positive Outlook
- Expect to drive net sales growth in each of our segments this year
- Demand for our leading retail brands remains favorable
- Foodservice segment expects strong growth for the remainder of the year
- Anticipate the near-term challenges for our International segment to abate over the coming months.
Challenges Ahead
- Earnings are being pressured by increased inefficiencies across our supply chain related to higher inventory levels
- Earnings are being pressured by softness in the snack nuts category
- Taking immediate action to combat inventory levels and warehousing costs which are expected to result in short-term margin compression.
- Will execute strategies to drive improvement for our Planters® business and the snack nuts category, including optimizing brand and promotional support, introducing innovation and expanding assortments.
- Will continue to implement our new operating model, GoFWD, including capturing the synergies from fully integrating our Jennie-O Turkey Store business and standing up our Brand Fuel center of excellence.