Hormel (NYSE:HRL) is an odd company. On one hand, it is difficult to find sustained success investing in large North American food companies, particularly those that are very vulnerable to commodity prices. On the other hand, Hormel does what so very few protein-focused food companies ever manage to do - the company has successfully diversified itself into a wide range of products and produces an ROIC that stands out within the industry and actually exceeds that of the average S&P 500 company.
A Quarter with Some Gristle
Hormel ended its fiscal year with a good news/bad news type of quarter. Top line reported growth of 23% certainly captures an investor's eye relatively easily. Backing that up, volume growth of 14% is quite good, and the 9% improvement in mix and pricing is not bad either. While this quarter did have an extra week in it, that is just a 7.7% tailwind, so clearly the company has some real growth even on a stricter apples-to-apples basis.
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