Hormel Foods Corporation (HRL)
Profitability ratios
Return on sales
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 16.61% | 17.47% | 17.00% | 19.05% | 19.85% |
| Operating profit margin | 8.91% | 10.59% | 9.90% | 11.48% | 12.60% |
| Pretax margin | 8.43% | 10.31% | 9.93% | 11.63% | 12.73% |
| Net profit margin | 6.59% | 8.07% | 8.02% | 9.47% | 10.31% |
Based on the profitability ratios of Hormel Foods Corp., the gross profit margin has shown a slight decline from 17.37% in 2022 to 16.51% in 2023, indicating a decrease in the percentage of revenue retained after accounting for the cost of goods sold. The operating profit margin also decreased from 10.32% in 2022 to 8.73% in 2023, reflecting a reduction in the proportion of revenue left after covering operating expenses.
Furthermore, the pretax margin decreased from 10.26% in 2022 to 8.37% in 2023, indicating a decline in the percentage of income before taxes relative to revenue. Finally, the net profit margin decreased from 8.03% in 2022 to 6.55% in 2023, which suggests a reduction in the percentage of net income relative to revenue.
These declining trends in profitability margins may indicate challenges in controlling costs, managing expenses, or achieving pricing power, possibly signaling a need for further analysis into the company's operations and financial performance.
Return on investment
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.97% | 9.86% | 8.84% | 11.10% | 14.75% |
| Return on assets (ROA) | 5.90% | 7.51% | 7.16% | 9.16% | 12.07% |
| Return on total capital | 10.77% | 12.38% | 11.36% | 15.20% | 19.89% |
| Return on equity (ROE) | 10.26% | 13.27% | 13.03% | 14.13% | 16.53% |
The profitability ratios of Hormel Foods Corp. indicate the company's ability to generate earnings relative to its assets and capital.
The operating return on assets (Operating ROA) has shown a decreasing trend over the past five years, dropping from 14.27% in 2019 to 7.86% in 2023, indicating a decline in the company's operational efficiency in generating profits from its assets.
The return on assets (ROA) also reflects a similar decreasing trend, falling from 12.07% in 2019 to 5.90% in 2023. This indicates that the company's overall ability to generate profits from its assets has been declining over the years.
The return on total capital has followed a similar pattern, decreasing from 19.38% in 2019 to 9.96% in 2023, indicating a decline in the company's ability to generate returns for both equity and debt holders.
The return on equity (ROE) has also shown a declining trend, dropping from 16.53% in 2019 to 10.26% in 2023, indicating a decrease in the company's ability to generate profits for its shareholders.
In summary, the profitability ratios of Hormel Foods Corp. suggest a declining trend in the company's ability to generate profits from its assets, capital, and equity over the past five years, highlighting potential challenges in maintaining and improving its profitability.