Hormel Foods Corporation (HRL) reported first-quarter 2019 earnings that came in line with market expectations but missed the mark on revenues. The stock dropped 1.6% in premarket hours on Thursday.
Total sales inched up by 1.2% to $2.36 billion compared to the same period last year.
Net earnings attributable to Hormel Foods dropped to $241.4 million, or $0.44 per share, from $303 million, or $0.56 per share, in the prior-year quarter, due to impacts from the tax reform.
During the quarter, Hormel saw sales increases in three of its four business divisions. Sales grew in the Refrigerated Foods, Grocery Products and International & Other segments, driven by the new Hormel Deli Solutions division, as well as strength in the Columbus, Herdez, Wholly Guacamole, and SPAM brands. Sales in the Jennie-O Turkey Store segment remained flat mainly due to declines in retail.
Hormel reaffirmed its sales and earnings guidance for 2019 and expects sales to come in the range of $9.70 billion to $10.20 billion and EPS to be in the range of $1.77 to $1.91.
Capital expenditures for the full year of 2019 are expected to come to around $350 million as the company plans for expansions at its Burke pizza toppings facility in Iowa and its Fontanini facility in Illinois along with multiple other projects.
The company also announced that it was selling its CytoSport business to PepsiCo (PEP) for $465 million and expects the transaction to be completed in 30-60 days.