Americans are dining out again, and sales at Hormel restaurants reflect this.
The restaurant business at the company, which serves the restaurant industry, jumped 45% from last year’s pandemic-induced lull in the summer quarter.
The Austin, Minnesota-based food maker on Thursday reported sales growth across all lines of business in its fiscal third quarter ended July 25.
The increase in COVID-19 cases due to the delta variant in the United States has not slowed down Hormel’s restaurant business.
“We are seeing it accelerate and we are incredibly optimistic,” Snee said. “We expect the workforce to continue to be a pain point for food service operators, but our portfolio will help them overcome this.”
Like many of its industry peers, Hormel raised the prices of its food products this spring over concerns that supply inflation could lower its profits. The maker of Spam, Skippy and Wholly Guacamole recently increased the prices of its branded products and expects further price increases for its fourth quarter.
The hikes more than offset the cost of rising inflation, said Jim Sheehan, Hormel’s chief financial officer.
Hormel posted record sales of more than $ 2.9 billion for the quarters of May, June and July, beating analysts’ expectations. The quarter’s balance sheet includes for the first time snack nut brand Planters, which it bought for $ 3.4 billion in June, the largest acquisition in company history.
“In the third quarter, our team achieved the highest quarterly sales in the company’s 130-year history while operating in an environment that included inflationary pressures and supply chain challenges across the company. industry, ”Snee told investors.
The company has adjusted its annual forecast to expectations that the fourth quarter will produce another period of record sales. Net sales for the year are now expected to be between $ 11 and $ 11.2 billion, down from $ 10.2 to $ 10.8 billion previously.
The company slashed profits for the full year due to one-time costs incurred in the Planters onboarding process – a move that pissed off investors.
Earnings per share are expected to be between $ 1.65 and $ 1.69, down from previous guidance of $ 1.70 to $ 1.82.
Hormel stock closed at $ 43.57, down 4.6% on mixed results.
John Boylan, food industry analyst at Edward Jones, was balanced in his assessment.
“We think it’s been a mixed quarter, but not unexpected,” Boylan wrote in a note. “Hormel is feeling the impact of inflation in transportation costs, ingredients and labor. Cost inflation is not unique to Hormel. Most other consumer staples have problems. similar. “