Hormel Foods' Q3 Earnings Coming Up: What Awaits HRL Stock?
Hormel Foods Corporation HRL is likely to register a top and bottom-line decline when it reports third-quarter fiscal 2024 earnings on Sep. 4. The Zacks Consensus Estimate for revenues is pegged at $2.96 billion, which suggests a decrease of 0.3% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has remained unchanged in the past 30 days at 36 cents per share. This indicates a decline of 10% from the year-ago quarter’s reported figure. HRL has a trailing four-quarter earnings surprise of nearly 5%, on average.
Things to Note About HRL’s Upcoming Release
Hormel Foods has been battling weakness in the International segment for a while. In the second quarter, net sales in the particular segment unit fell 7.3% year over year to $166.8 million, whereas volumes tumbled 7.2%. The sales decline resulted from reduced commodity export volumes and soft sales in China. The persistence of this trend is likely to have hurt the company in the quarter under review.
Hormel Foods Corporation Price, Consensus and EPS Surprise
Hormel Foods Corporation price-consensus-eps-surprise-chart | Hormel Foods Corporation Quote
Rising costs have also been a concern for HRL. On its last earnings call, the company stated that it expects an increase in selling, general and administrative (SG&A) expenses in the second half of fiscal 2024 due to higher expenses related to the Transform and Modernize initiative and increased compensation costs. Management also highlighted that it expects to see increased advertising spending for the remainder of the year as it continues to promote top brands in the market through new advertising strategies. A rise in such costs is likely to have put pressure on the company’s profits in the third quarter.
However, Hormel Foods’ focus on six strategic priorities has been a breather. These include enhancing its focus and fueling growth in the Retail unit, reinforcing leadership in Foodservice, pursuing solid global expansion, implementing the enterprise entertaining & snacking vision, emphasizing the One Supply Chain initiative, and continuing the ongoing transformation and modernization of the business.
We note that the company has been reaping benefits from the growing demand for Foodservice products. The company’s long-standing relationships, differentiated product portfolio, innovative solutions and impressive sales team are fueling growth in the Foodservice business.
What the Zacks Model Unveils for HRL
Our proven model doesn’t conclusively predict an earnings beat for Hormel Foods this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Hormel Foods carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are some companies worth considering, as our model shows that these have the correct combination to beat on earnings this time.
DICK'S Sporting Goods DKS currently has an Earnings ESP of +3.05% and a Zacks Rank of 2. The company is likely to register bottom and top-line growth in its upcoming earnings release. The consensus mark for DKS’ quarterly revenues is pegged at $3.43 billion, which indicates a 6.4% rise from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for DICK'S Sporting’s quarterly earnings has moved up by 1.6% in the past seven days to $3.77, which indicates growth of 33.7% from the year-ago quarter’s actual. DKS delivered an earnings beat of 4.7%, on average, in the trailing four quarters.
Costco Wholesale Corporation COST currently has an Earnings ESP of +0.89% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COST’s quarterly revenues is pegged at $80.2 billion, which suggests growth of 1.6% from the year-ago quarter’s reported figure.
The consensus estimate for Costco’s earnings has remained unchanged in the past 30 days at $5.02. The consensus mark for earnings indicates growth of 3.3% from the year-ago quarter’s reported figure. COST delivered an earnings beat of 2.3%, on average, in the trailing four quarters.
Casey's General Stores CASY has an Earnings ESP of +0.21% and a Zacks Rank of 3 at present. CASY is expected to register top and bottom-line growth when it posts first-quarter fiscal 2025 numbers. The consensus estimate for quarterly revenues is pegged at $4.11 billion, which calls for 6.3% growth from the year-ago quarter.
The Zacks Consensus Estimate for Casey's General’s quarterly earnings has increased by 4 cents in the past seven days to $4.54, which indicates a 0.4% rise from the figure reported in the year-ago quarter. CASY delivered a trailing four-quarter average earnings surprise of 22.9%.
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Costco Wholesale Corporation (COST) : Free Stock Analysis Report
DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report
Hormel Foods Corporation (HRL) : Free Stock Analysis Report
Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report