Spam may or may not be a better investment than gold (tip: it isn't, and only those for whom the only solution to a record debt crisis is more debt can claim otherwise), but some things are certain: it is edible, it is cheap and it can be stored indefinitely. Which just happens to be great news for Spam maker Hormel, as these three qualities are precisely what saved its quarter. Per AP, strong sales of Spam and Jennie-O products helped Hormel Foods' net income rise in its fiscal third quarter. The meat producer's revenue came in just above Wall Street expectations.
Hormel Foods Corp. said Thursday that it earned $111.2 million, or 41 cents per share, for the quarter. That's up 13 percent from $98.5 million, or 36 cents per share, during the same period a year earlier.
The performance met the expectations of analysts surveyed by FactSet.
Revenue for the period ended July 29 increased 5 percent to $2.01 billion from $1.91 billion, led by sales of Spam. This was slightly higher than the $2 billion that Wall Street forecast.
Revenue improved across all segments except refrigerated foods, which posted a slight decline.
The Jennie-O Turkey Store unit, which makes up 18 percent of the company's revenue, reported a 7 percent increase in its sales thanks to better sales of its fresh tray pack products and turkey burgers. Sales for the grocery products division rose 21 percent due to higher Spam sales and its MegaMex Foods joint venture. The segment, which makes up 15 percent of total sales, was also helped by sales of Don Miguel products.
The majority of Hormel's sales, 52 percent, come from the refrigerated foods unit. It reported flat sales for the quarter.
Bottom line: first we learned that the uber-wealthy US consumer is tapped out thanks to BID, which also happens the be a great market barometer, then we learn that the aspirational one is dying courtesy of BIG, and now SPAM proves that with demand for the no-frills edible soaring, Americans are hunkering down to basics. Which, for an economy that is 70% reliant on consumption, is hardly good news. Luckily the market, which has given up even trying to pretend it reacts to the economy, only cares about one thing: what will the Chairsatan do next.