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Hormel Foods Reaffirms FY20 Outlook; To Buy Sadler's Smokehouse - Quick Facts

While reporting financial results for the first quarter of fiscal 2020 on Thursday, branded food company Hormel Foods Corp. (HRL) reaffirmed its earnings and net sales guidance for the full-year 2020.

For fiscal 2020, the company continues to project earnings in a range of $1.69 to $1.83 per share on net sales between $9.50 billion and $10.30 billion.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $1.86 per share on net sales of $10.03 billion for the year. Analysts' estimates typically exclude special items.

The company said its international team continues to manage through African swine fever, tariffs and the uncertainty caused by the recent outbreak of coronavirus in China. The company has started to see a negative impact on its business in China from the coronavirus outbreak, but is not yet able to forecast the impact for the remainder of the year.

Separately, the company advanced on its 2020 Path Forward with the acquisition of Sadler's Smokehouse, strengthening its presence in the foodservice channel. Sadler's Smokehouse is an authentic pit-smoked meats company based in Henderson, Texas.

The acquisition is expected to close in March 2020, subject to customary closing conditions. The acquisition is expected to be neutral to slightly negative to fiscal 2020 earnings, as the company plans to make immediate investments into the business and production facility.

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