How Did Sanderson Farms Perform in 4Q16?

Price movement

Sanderson Farms (SAFM) has a market cap of $1.9 billion. It fell 0.58% to close at $88.75 per share on December 15, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 4.0%, 3.2%, and 16.9%, respectively, on the same day.

SAFM is trading 6.0% above its 20-day moving average, 1.8% above its 50-day moving average, and 0.61% above its 200-day moving average.

How Did Sanderson Farms Perform in 4Q16?

Related ETF and peers

The iShares Russell 2000 ETF (IWM) invests 0.11% of its holdings in Sanderson Farms. The YTD price movement of IWM was 22.3% on December 15.

The market caps of Sanderson Farms’s competitors are as follows:

  • Tyson Foods (TSN) — $22.4 billion
  • Pilgrim’s Pride (PPC) — $4.3 billion
  • Cal-Maine Foods (CALM) — $2.0 billion

Performance of Sanderson Farms in fiscal 4Q16

Sanderson Farms reported fiscal 4Q16 net sales of $790.8 million, a rise of 16.4% compared to net sales of $679.6 million in fiscal 4Q15. The company’s cost of sales as a percentage of net sales narrowed 800 basis points, and its operating margin expanded 820 basis points in fiscal 4Q16 compared to fiscal 4Q15.

Its net income and EPS (earnings per share) rose to $76.0 million and $3.36, respectively, in fiscal 4Q16 compared to $27.4 million and $1.22, respectively, in fiscal 4Q15.

Fiscal 2016 results

In fiscal 2016, SAFM reported net sales of $2.8 billion, a rise of 0.45% YoY (year-over-year). The company’s operating margin narrowed 160 basis points in fiscal 2016.

Its net income and EPS fell to $189.0 million and $8.37, respectively, in fiscal 2016 compared to $216.0 million and $9.52, respectively, in fiscal 2015.

Sanderson’s cash and cash equivalents and inventories rose 19.0% and 10.8%, respectively, in fiscal 2016. Its current ratio rose to 4.1x in fiscal 2016 compared to 3.5x in fiscal 2015.

For an ongoing analysis of this sector, please visit Market Realist’s Consumer Discretionary page.