Hormel Foods Corp. shares rose the most in more than a decade after the maker of Spam and Jennie-O turkey increased its annual forecast, helped by demand for refrigerated foods.
The company now expects earnings of $1.50 to $1.56 a share this year, excluding some items, according to a statement Tuesday. That’s up from a previous forecast of as much as $1.48. Profit also topped analysts’ estimates last quarter, though the fallout from a bird-flu outbreak hurt sales in the period.
The growth of Hormel’s refrigerated selection shows the Austin, Minnesota-based company is successfully shifting away from its historical emphasis on canned foods. Hormel cited products such as Wholly Guacamole and Applegate natural breakfast sausage – a product it acquired last year – for helping fuel sales last quarter. Millennials are increasingly seeking out foods in the refrigerated section, where ingredients are typically fresher.
Hormel gained as much as 10 percent to $45.72 after the results were posted, marking the biggest intraday increase since November 2004. The shares rose 52 per cent in 2015 – the seventh straight year of gains – and are trading in record territory.
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