Hormel Foods Corporation (HRL)
Operating profit margin
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 1,072,050 | 1,312,610 | 1,122,600 | 1,100,220 | 1,196,260 |
| Revenue | US$ in thousands | 12,036,600 | 12,389,600 | 11,339,200 | 9,585,600 | 9,496,530 |
| Operating profit margin | 8.91% | 10.59% | 9.90% | 11.48% | 12.60% |
October 29, 2023 calculation
Operating profit margin = Operating income ÷ Revenue
= $1,072,050K ÷ $12,036,600K
= 8.91%
Hormel Foods Corp.'s operating profit margin has experienced a slight decline over the past five years. The operating profit margin, which reflects the efficiency of the company's operations and its ability to control costs, decreased from 12.18% in 2019 to 8.73% in 2023.
The declining trend in the operating profit margin may indicate challenges in managing operating expenses relative to the revenue generated. This could be due to higher production costs, increased marketing expenses, or other operational inefficiencies.
A declining operating profit margin warrants further investigation into the company's cost structure and operational strategies. It is imperative for Hormel Foods Corp. to closely evaluate and address the factors contributing to the decrease in operating profit margin to ensure the long-term profitability and sustainability of the business.
Overall, the declining trend in operating profit margin signals the need for management to focus on improving operational efficiency and cost management to enhance overall profitability.