Hormel Foods (HRL) Gears Up for Q2 Earnings: Is a Beat Likely?
Hormel Foods Corporation HRL is likely to register top-line growth when it reports second-quarter fiscal 2024 earnings on May 30. The Zacks Consensus Estimate for revenues is pegged at $2.99 billion, which suggests an increase of 0.3% from the prior-year quarter’s reported figure.
However, the bottom line is likely to have declined year over year. The consensus mark for quarterly earnings has decreased by 1 cent in the past seven days to 35 cents per share. This indicates a decline of 12.5% from the year-ago quarter’s reported figure. HRL has a trailing four-quarter earnings surprise of 3.5%, on average.
Factors to Note
Hormel Foods’ focus on its six strategic priorities has been working well. 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.
The company has been reaping benefits from the growing demand for Foodservice products. HRL’s long-standing relationships, differentiated product portfolio, innovative solutions and impressive sales team are fueling growth in the Foodservice business. Management continues to witness broad volume growth in fiscal 2024, led by turkey, bacon and pepperoni. This bodes well for Hormel Foods 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
However, additional investments in transformation and modernization efforts, coupled with increased employee-related costs, put pressure on SG&A expenses. The company also expects to witness a major increase in advertising investments in the fiscal second quarter as it continues to support brands like Planters, SPAM and Hormel Chili. A rise in such costs is likely to have put pressure on profits.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Hormel Foods this time. 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 the case here.
Hormel Foods currently carries a Zacks Rank #3, and it has an Earnings ESP of +2.13%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are some more companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings this reporting cycle.
Bath & Body Works BBWI currently has an Earnings ESP of +5.23% and a Zacks Rank of 2. The Zacks Consensus Estimate for first-quarter fiscal 2024 earnings per share is pegged at 33 cents, flat year over year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bath & Body Works’ top line is expected to decline year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.37 billion, which indicates a drop of 2.1% from the figure reported in the prior-year quarter. BBWI has a trailing four-quarter earnings surprise of 23.2%, on average.
Dollar Tree DLTR currently has an Earnings ESP of +0.16% and a Zacks Rank of 3. The company is likely to register a top-line increase when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for Dollar Tree’s quarterly revenues is pegged at $7.63 billion, which implies growth of 4.2% from the figure reported in the prior-year quarter.
However, the Zacks Consensus Estimate for Dollar Tree’s quarterly earnings of $1.43 suggests a drop of 2.7% from the year-ago quarter’s levels. DLTR has a trailing four-quarter negative earnings surprise of 1.9%, on average.
American Eagle Outfitters AEO currently has an Earnings ESP of +3.98% and a Zacks Rank #3. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 28 cents suggests a jump of 64.7% from the year-ago quarter.
American Eagle Outfitters’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $1.15 billion, which implies an increase of 6.2% from the figure reported in the year-ago quarter. AEO has a trailing four-quarter earnings surprise of 22.7%, on average.
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Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report
American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
Hormel Foods Corporation (HRL) : Free Stock Analysis Report
Bath & Body Works, Inc. (BBWI) : Free Stock Analysis Report
