Bridgford Foods Reports Q2 Loss of $3.9M, Revenue of $50.6M

Bridgford Foods Corp. reported a Q2 loss of $3.9 million, or 43 cents per share, on revenue of $50.6 million. Shares have dropped 25% this year and 20% in the last 12 months, ending at $8.05 on Monday.

Hormel Foods Corp. (NYSE: HRL) reported its second quarter (Q2) results, showcasing solid organic top-line growth and delivering results largely in line with expectations. The company achieved net sales of $2.9 billion, marking a 1% organic increase over the previous year [1].

Key highlights of the Q2 performance include:

- Net Sales: $2.9 billion, a 1% organic increase over last year.
- Gross Profit Margin: 16.7%, impacted by higher commodity input costs.
- SG&A Expenses: Decreased by 50 basis points.
- Diluted Earnings Per Share (EPS): $0.33; Adjusted diluted EPS: $0.35.
- Cash Flow from Operations: $56 million.
- Capital Expenditures: $75 million, with a full-year expectation of $275 million to $300 million.
- Debt: $2.9 billion, at the low end of the net debt-to-EBITDA target.
- Dividend: 387th consecutive quarterly dividend paid.
- Full-Year Net Sales Growth Outlook: 2% to 3% increase expected.
- Full-Year Adjusted EPS Outlook: $1.58 to $1.68.

The company noted that higher commodity input costs had a significant impact on gross profit margins, which were at 16.7% for the quarter. Interest and investment income also decreased due to lower cash balances and performance from the rabbi trust [1].

Positive performance was highlighted by the Applegate brand, which experienced incredible sales growth, outpacing the total edible category and expanding its reach with new product lines. Jennie-O lean ground turkey continued to perform well, aligning with consumer preferences for lean, high-protein foods. The Mexican foods portfolio saw success with Herdez Salsa and refrigerated guacamole, experiencing double-digit consumption growth. The International segment delivered strong top-line growth, driven by double-digit volume and net sales growth in exports and robust growth in China [1].

During the earnings call, CEO James Snee explained that Hormel Foods is well-positioned for a strong second half, driven by the recovery of the Planters brand, positive momentum in the turkey portfolio, and strong performance in value-added businesses. The Transform and Modernize (T&M) initiative is on track, contributing to the expected results [1].

However, the company faced challenges with inventory management, necessitating strategic builds for summer demand, and foodservice margins remained stagnant, requiring continued efforts to outperform the broader market [1].

References:
[1] https://ca.finance.yahoo.com/news/hormel-foods-corp-hrl-q2-070420774.html