Hormel stock has its best day in more than a decade as shoppers buy more of its products

Shares in Hormel Foods had their biggest single-day jump in at least 15 years on Thursday, as investors went nuts over improved sales of Planters, Skippy and other brands.

The Austin, Minn.-based company broke from recent trends in the food industry by selling more pounds of food this winter. The company also expects more volume sales growth over the rest of the year.

Consumers had recently been buying less food from Hormel and other brands in the face of price increases, but the volume growth — industry parlance for improved unit sales — was a welcome sign the company is offering shoppers the right deals.

Hormel is tinkering with promotions “to really get the right price for the consumer,” said Deana Brady, the company’s head of retail.

Hormel’s stock rose 14.6% Thursday and reached its highest level since October, though at $35.32 it remains below highs set during the pandemic. Last fall, investors punished the company for boosting worker wages in a new union contract and as commodity prices were fluctuating.

Amid declining sales to end the company’s last fiscal year, Hormel leaders said 2024 would look more like a rebuilding year, and 2025 and beyond should see steady growth.

“We have a clear and achievable path to deliver earnings growth and improve our business over the next three years,” Hormel CEO Jim Snee told analysts Thursday.

Investors and analysts see that prediction taking shape already.

“The 3.7% volume growth this quarter was a particular bright spot, as it has been difficult for packaged-food manufacturers to grow volume sales in this consumer spending environment,” said Arun Sundaram, senior equity analyst at CFRA Research. “Given the strong start to the year, there is optimism that the worst is behind the company and that Hormel could raise its full-year outlook next quarter.”

Sundaram said Hormel stock has been “beaten up pretty hard over the last year or so due to volatile commodity markets ... soft domestic retail sales, weak export demand and softness in China. Going into this fiscal year, analysts weren’t expecting much earnings growth.”

Hormel’s profits rose slightly to $218 million for the first fiscal quarter that ended in January, a 40-cent per share haul that beat Wall Street estimates. Sales rose 1% from the year before to hit $3 billion.

On Thursday the company reaffirmed its outlook for the year and expects sales to grow 1-3%.