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Hormel Foods Corp. reported record sales as customers stocked up on groceries to ride out the COVID-19 pandemic at home.
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The Austin, Minnesota-based food and meat manufacturer posted a second-quarter profit of $227.7 million, or 42 cents a share, as net revenue rose 3 percent to a record $2.4 billion. Wall Street analysts surveyed by Refinitiv were expecting earnings of 43 cents a share on $2.39 billion.
“Even though the COVID-19 pandemic has caused a dramatic shift in consumer behavior, operational disruptions and extreme volatility in raw material markets, we remain financially strong and well-positioned to weather the pandemic,” CEO Jim Snee said in a statement.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| HRL | HORMEL FOODS | 47.99 | +0.60 | +1.27% |
Hormel’s U.S. retail net sales soared 16 percent versus a year ago and deli meat sales climbed 5 percent while foodservice net sales slid 21 percent as restaurants across the country shut down.
Hormel finished the quarter with $606 million cash, down 10 percent from the prior three months.
The company absorbed $20 million of additional costs due to the pandemic in the form of lower production volumes, employee bonuses and enhanced safety measures. It expects another $60 million to $80 million of extra costs in the second half of the year.
Hormel raised its quarterly dividend by 11 percent from a year ago to 23.25 cents per share.
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Shares were up 6.38 percent year-to-date through Wednesday, outperforming the S&P 500’s 8.02 percent decline.
