Even after 81 years in existence, the world’s love affair with the magical canned meat product known as Spam is not showing any signs of letting up.
The brand’s owner Hormel said on its fourth fiscal quarter earnings call Thursday that sales of Spam capped off their seventh straight record-setting year.
And that definitely doesn’t surprise Hormel CEO Jim Snee.
“The question is, who is not eating Spam? It’s amazing what we have been able to do over the last seven years,” Snee said on Yahoo Finance Live. “When you break it down and think about it at its core, it is an incredibly affordable source of protein. And so when you think about the value shopper to start with, it’s a staple in their pantry and a staple they need to feed their families. Then we have seen this increase in Asian influence in restaurants, Spam shows up everywhere. What we are also seeing is a change in the consumer dynamic where you might think it’s a value consumer only or a more senior consumer only [buying Spam], and that’s not true. We are seeing broad-based consumption for the brand.”
To be sure, Spam did its part to power Hormel to some solid quarterly results shared Thursday, especially against the backdrop of high levels of inflation that triggered the company to raise prices like many of its peers.
Hormel’s sales rose 43% from the prior year to $3.5 billion, aided as well by the addition of Planters which the company acquired from Kraft Heinz for $3.35 billion earlier this year. Operating profits for Hormel rose 29% from a year ago.
Here is how Hormel performed compared to Wall Street analyst estimates in its fiscal fourth quarter:
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Net Sales: $3.5 billion vs. $3.23 billion
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Operating Margin: 10.4% vs. 10.6%
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Diluted EPS: $0.51 vs. $0.50
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FY22 Guidance
Shares of Hormel rose 5% to $45.15 in Thursday trading. The stock is closing in on its high of the year of $50.50, hit on Jan. 27.
Snee doesn’t see any letup in sales of Spam, which is probably good news for the traders that are sending Hormel’s stock higher today.
“We feel really confident in our ability to grow it into the future,” Snee said on the outlook for Spam.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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