Stock News Buzz: Hormel Foods Corp (NYSE: HRL)

On Tuesday, Hormel Foods Corp (NYSE: HRL) remained among the day gainers losers and traded with change of -0.57% on volume of 2,240,198 shares in the last session as compared to average volume of 1374104 shares. During last trade its minimum price was $50.06 and it gained highest price of $51.06. HRL has total market capitalization of $27319476139. Its closing value stands at $50.69.

Hormel Foods Corporation (HRL) recently stated results for the third quarter of fiscal 2020. All comparisons are to the third quarter of fiscal 2019 unless otherwise noted.

The impact of the Sadler’s Smokehouse acquisition (March 2020) is excluded in the presentation of the third quarter of fiscal 2020 non-GAAP measures of organic volume and organic net sales. Operating free cash flow is also presented as a non-GAAP metric.

EXECUTIVE SUMMARY – THIRD QUARTER

  • Volume of 1.2B lbs., up 4%; organic volume1 up 3%
  • Record net sales of $2.4B, up 4%; organic net sales1 up 2%
  • Pretax earnings of $259M, down 1%
  • Operating margin of 10.5%, contrast to 11.2% last year
  • Effective tax rate of 21.6%, contrast to 23.6% last year
  • Net earnings of $203M, up 2%
  • Diluted earnings per share of $0.37, flat to last year
  • Cash flow from operations of $330M, up 59%
  • Operating free cash flow1 of $242M, up 72%

 

COVID-19 RESPONSE
“We continue to ensure employee safety is our top priority,” Snee stated. “We are seeing success from our awareness initiative, KEEP COVID OUT!, which reinforces the importance of taking preventive measures at our production facilities and in our communities where we work and live.”

The company’s safety procedures continue to meet or exceed CDC and OSHA guidelines, ensuring its operations reflect best practices in the food industry. In addition to numerous safety procedures enacted once the pandemic started, the company has expanded automated temperature screenings, added more staggered production shifts and increased training on COVID-19 best practices.

In the third quarter, the company absorbed about $40M in incremental supply chain costs primarily related to lower production volumes, employee bonuses and improved safety measures in its production facilities. On a year-to-date basis, total incremental costs were $60M, and the range of incremental costs in the fourth quarter is $20-$40M. The total incremental supply chain costs are anticipated to be $80-$100M in fiscal 2020.

CORPORATE ACCOUNTABILITY
“Being a good corporate citizen is about over just writing a check to worthwhile causes. It’s about making a difference and doing our part every day to lift up our communities and use our size and position as a global branded food company to make a difference through our philanthropic pillars of food security, community support and education,” Snee stated. “Since the start of the pandemic, we have continued to support our communities by contributing to hunger relief efforts, including donating cash and products to global, national and local hunger-relief organizations.”

“Hormel Foods remains committed to supporting equality and education,” Snee stated. “Through the great work of our Inclusion and Diversity Guiding Coalition, in July we reported employee and corporate donations to three organizations: Minorities in Agriculture, Natural Resources and Related Sciences (MANRRS); the NAACP Legal Defense and Education Fund; and United Negro College Fund (UNCF). In addition, recently we separately reported a college assurance program, Inspired Pathways, which will provide full tuition for any child of a Hormel Foods employee to attend community college. I’m very excited to see the difference these programs will make in our communities.”

Company’s performance for the week was -1.65%, -0.22% for month and YTD performance remained 12.37%. The price moved ahead of -2.09% from the mean of 20 days, 1.09% from mean of 50 days SMA and performed 7.59% from mean of 200 days price.

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