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Sanderson Farms (SAFM) Looks Solid: Up More Than 20% in 6 Months
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Sanderson Farms, Inc. appears to be in robust shape, with its shares up 23.3% in the past six months, against the industry’s decline of 3.5%. The company has been benefiting from the favorable demand as well as efficient pricing. These upsides aided the company in the third quarter of fiscal 2021, wherein the top and bottom lines surged year over year and easily beat the Zacks Consensus Estimate. The Zacks Rank #1 (Strong Buy) company is likely to continue gaining from its splendid growth efforts.
Let’s delve deeper.
Factors Backing Sanderson Farms
Sanderson Farms is working toward boosting its assortments to meet consumers’ altering tastes and dining preferences. In this context, the company has been striving to expand its tray pack offerings. Additionally, the company has been investing toward strengthening its overall capacity. For the first nine months of fiscal 2021, capital expenditures amounted to roughly $126.7. For fiscal 2021, the company’s capital budget is nearly $195 million, as on Aug 17, 2021. Prior to this, Sanderson Farms constructed a poultry processing complex in Tyler, TX. The facility, which started operations in fiscal 2019, includes a feed mill, hatchery, waste water treatment facility and a processing plant, with the capacity to process 1.3 million chickens per week.
Apart from this, the company is gaining on its efforts to strengthen the product base as well as favorable pricing. Sanderson Farms has been strengthening the product portfolio by adding to its vast product pipeline. The company is known for its processed and prepared chicken products available in varied sizes that are also sold in foreign markets, namely Mexico, the Middle East and Central Asia. Moving to pricing, the average quoted market price for boneless breast meat flared up 71.4% year over year in third-quarter fiscal 2021 — with the average market price for bulk leg quarters, jumbo wings and chicken breast tenders increasing 66.3%, 107% and 107.3%, respectively.
Image Source: Zacks Investment Research
Splendid Q3 Performance
The company posted strong third-quarter fiscal 2021 results, wherein it benefited from robust execution across live production, sales and processing. Results were driven by a considerable rise in demand as well as prices for products sold to the foodservice customers, and the sustained demand strength for products sold to the retail grocery store customers. With more foodservice set-ups reopening across the country, market conditions for the products sold to this channel have improved.
A number of consumers have started dining away from home, with curbs being lifted and vaccinations gathering pace. That said, the retail demand remained elevated with many consumers continuing to cook meals at home. Demand and pricing sold, mainly for export, remained higher than the pandemic-induced level witnessed in the second half of fiscal 2020.
Net sales came in at $1,352.8 million, which surpassed the Zacks Consensus Estimate of $1,304 million. The metric advanced 41.4% from $956.5 million recorded in the year-ago period. The company delivered earnings of $7.38 per share compared with the year-ago quarter’s figure of $1.48. Earnings beat the Zacks Consensus Estimate of $6.73 per share.
Image: Bigstock
Sanderson Farms (SAFM) Looks Solid: Up More Than 20% in 6 Months
Sanderson Farms, Inc. appears to be in robust shape, with its shares up 23.3% in the past six months, against the industry’s decline of 3.5%. The company has been benefiting from the favorable demand as well as efficient pricing. These upsides aided the company in the third quarter of fiscal 2021, wherein the top and bottom lines surged year over year and easily beat the Zacks Consensus Estimate. The Zacks Rank #1 (Strong Buy) company is likely to continue gaining from its splendid growth efforts.
Let’s delve deeper.
Factors Backing Sanderson Farms
Sanderson Farms is working toward boosting its assortments to meet consumers’ altering tastes and dining preferences. In this context, the company has been striving to expand its tray pack offerings. Additionally, the company has been investing toward strengthening its overall capacity. For the first nine months of fiscal 2021, capital expenditures amounted to roughly $126.7. For fiscal 2021, the company’s capital budget is nearly $195 million, as on Aug 17, 2021. Prior to this, Sanderson Farms constructed a poultry processing complex in Tyler, TX. The facility, which started operations in fiscal 2019, includes a feed mill, hatchery, waste water treatment facility and a processing plant, with the capacity to process 1.3 million chickens per week.
Apart from this, the company is gaining on its efforts to strengthen the product base as well as favorable pricing. Sanderson Farms has been strengthening the product portfolio by adding to its vast product pipeline. The company is known for its processed and prepared chicken products available in varied sizes that are also sold in foreign markets, namely Mexico, the Middle East and Central Asia. Moving to pricing, the average quoted market price for boneless breast meat flared up 71.4% year over year in third-quarter fiscal 2021 — with the average market price for bulk leg quarters, jumbo wings and chicken breast tenders increasing 66.3%, 107% and 107.3%, respectively.
Image Source: Zacks Investment Research
Splendid Q3 Performance
The company posted strong third-quarter fiscal 2021 results, wherein it benefited from robust execution across live production, sales and processing. Results were driven by a considerable rise in demand as well as prices for products sold to the foodservice customers, and the sustained demand strength for products sold to the retail grocery store customers. With more foodservice set-ups reopening across the country, market conditions for the products sold to this channel have improved.
A number of consumers have started dining away from home, with curbs being lifted and vaccinations gathering pace. That said, the retail demand remained elevated with many consumers continuing to cook meals at home. Demand and pricing sold, mainly for export, remained higher than the pandemic-induced level witnessed in the second half of fiscal 2020.
Net sales came in at $1,352.8 million, which surpassed the Zacks Consensus Estimate of $1,304 million. The metric advanced 41.4% from $956.5 million recorded in the year-ago period. The company delivered earnings of $7.38 per share compared with the year-ago quarter’s figure of $1.48. Earnings beat the Zacks Consensus Estimate of $6.73 per share.
3 Other Tempting Food Stocks
The Zacks #1 Ranked Pilgrim’s Pride (PPC - Free Report) bottom line has outpaced the Zacks Consensus Estimate by nearly 34% in the preceding four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Darling Ingredients (DAR - Free Report) , also currently sporting a Zacks Rank #1, has a trailing four-quarter earnings surprise of 39.1%, on average.
Sysco Corporation (SYY - Free Report) , carrying a Zacks Rank #2 at present, has a trailing four-quarter earnings surprise of 13.3%, on average.