How Is Hormel Foods Corp Likely To Grow In The Next Two Years?
Hormel Foods (NASDAQ: HRL), has seen slow growth in sales but steady profits the past several years. During the recent annual earnings the company’s net sales dipped by 3.7% reporting at $9.1 Bn as compared to the $9.5 Bn recorded in FY2016 with organic sales up by 3%. This decline in sales was primarily due to the volatility in the commodities market and largely due to the weak performance from the Jennie-O Turkey Store and Specialty Foods segments. On the other hand, Hormel’s other three of five segments delivered record segment profit, its strategic acquisitions and innovation efforts, along with brand building, have strengthened its product portfolio, and have been the main factors contributing to this second most profitable year in the company’s history.
Going forward, we are projecting revenues for all the five segments of the Company to grow as the company is working on developing their long-term strategic plan for sustainable growth. Overall, we anticipate the company’s revenue to grow at a compounded annual growth rate (CAGR) of 4.7%. We have built an explanatory dashboard for Hormel Food Inc’s growth in the next 2 years to outline major drivers of revenue over the next two years.
Estimating Hormel Foods Inc Revenue Growth
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Hormel Foods Inc generates revenue from five reportable segments of the Company: Grocery Products, Refrigerator Foods, Jennie_O Turkey Store, Specialty Foods, and International & Other.
As per our analysis, we believe Refrigerated Foods, Grocery Products, and International segments of the company to drive growth as Jennie-O Turkey Store continues to navigate difficult industry conditions in the next two years. These 3 segments are expected to continue to drive future revenue and profitability growth for the company also in line with the guidance provided by the company.
The Company is more than ever focused on execution, ongoing improvements in top-line growth, and continuing actions to expand margins and accelerating their strengths to create more value for their consumers, customers, communities, colleagues, and shareholders. Despite the volatile commodity markets, the company plans to grow their business through continuous improvement and sustain their company as they sustainably feed the world with their fast growing portfolio. All these factors, coupled with strong sales momentum, will enable Hormel Foods Inc to continue to grow its top line. Our detailed estimates have been highlighted in our dashboard above. You can make changes to our assumed figures to arrive at your own revenue and growth estimates for the company.
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