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Hormel Foods (HRL) Queued for Q3 Earnings: Things to Note

Hormel Foods' (HRL) third-quarter fiscal 2021 performance is likely to reflect robust demand in retail and deli channel. Recovery in the foodservice c...

This story originally appeared on Zacks

Hormel Foods Corporation HRL is likely to register top-and the bottom-line growth when it reports third-quarter fiscal 2021 numbers on Sep 2. The Zacks Consensus Estimate for quarterly revenues is pegged at $2,691 million, which suggests an increase of almost 13% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for quarterly earnings, which has remained unchanged at 38 cents per share in the past 30 days, projects 2.7% growth from the year-ago quarter’s reported figure. The producer and marketer of several meat and other food products has a trailing four-quarter earnings surprise of 3.1%, on average.

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Hormel Foods Corporation Price and EPS Surprise


Hormel Foods Corporation Price and EPS Surprise

Hormel Foods Corporation price-eps-surprise | Hormel Foods Corporation Quote


Things to Note

Hormel Foods is benefiting from robust demand in its retail and deli channel. The company’s International & Other segment has also been performing well for a while. Apart from this, it is witnessing recovery in the foodservice business. Management, in its last earnings call, highlighted that it is optimistic about the foodservice business for the second half of the year. It expects to keep witnessing high demand in the retail, deli and international channels. We believe that such upsides are likely to have driven Hormel Foods’ performance in third-quarter fiscal 2021.

Apart from this, the company’s focus on innovation has been yielding. Moreover, Hormel Foods’ effort to boost capacity is noteworthy. Management has been consistently investing in the e-commerce channel, which bodes well.

However, Hormel Foods is seeing escalated costs associated with COVID-19. Management, in its second-quarter earnings call, highlighted that it has witnessed rapid escalations in key input costs across business this year. Management stated that it expects higher costs to persist for the rest of the year. Impacts of the same might get reflected in the company’s performance in to-be-reported quarter.

What the Zacks Model Unveils

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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hormel Foods currently carries a Zacks Rank #2 and has an Earnings ESP of -8.50%.

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Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Chewy, Inc. CHWY currently has an Earnings ESP of +100.00% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

lululemon athletica inc. LULU currently has an Earnings ESP of +3.06% and a Zacks Rank of 2.

Costco Wholesale Corporation COST currently has an Earnings ESP of +0.44% and a Zacks Rank of 3.

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