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Hormel Foods Corp HRL

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Hormel Highlights Planters as Springboard for Snacking Growth, but Shares Priced for Perfection

Analyst Note

| Rebecca Scheuneman, CFA |

Hormel’s investor day provided a platform for the firm to highlight its strategy for the newly acquired Planters brand, which will serve as a cornerstone of its entertaining and snacking lineup. Given Hormel’s brand-building prowess (which underpins its narrow moat), we’re optimistic Planters’ new marketing campaign will help rejuvenate brand equity, while new flavors, sustainable packaging, and merchandising events should boost growth. Further, with 15% of Planters’ sales stemming from convenience stores, the deal provides an opening for Hormel to expand its legacy brands (protein snack packs and salsas) into the channel.

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Company Profile

Business Description

Hormel Foods is a protein-focused branded food company. Its brands include its namesake Hormel, Spam, Jennie-O, Dinty Moore, Applegate, Wholly Guacamole, and Skippy. The vast majority of the company’s revenue is U.S.-based: 67% U.S. retail, 26% U.S. food service, and 7% international. By product type, in fiscal 2020 22% of revenue was shelf-stable foods, 20% was poultry (branded and commodity), 55% was other perishable food, and 3% was other, primarily nutritional products. The company holds the number-one market position in shelf-stable meat, shelf-stable ready meals, pepperoni, natural/organic deli meat, guacamole, and the number-two position in turkey, bacon, chilled ready meals, and peanut butter.

1 Hormel Place
Austin, MN, 55912-3680
T +1 507 437-5611
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Jul 31, 2021
Fiscal Year End Oct 25, 2021
Stock Type Slow Growth
Employees 20,000