The Hilton Food Group (LON: HFG) share price nosedived to the lowest point since 2017 after the company slashed its guidance. It plummeted to a low of 658p, which was about 50% below its all-time high. It was the worst-performing stock in the FTSE 250 index.
Hilton Food Group earnings preview
Hilton Food Group is a leading food company that focuses on food industries like meat, seafood, and vegetables. It sells these products to some of the best-known companies in the UK like Tesco, Ocado, and Morrisons among others. The company has over 6,000 employees who operate in its 24 facilities.
Hilton Food Group share price collapsed by more than 30% on Thursday after the company published weak earnings and warned about its future income as inflation continued.
The firm said that its volume rose by 3.6% in the 28 weeks to July of this year. It sold 271,708 tonnes of product while its revenue jumped by 20.4% to 2 billion pounds. However, its operating profit rose by just 5.6% to 30 million pounds inflation continued rising. As a result, the company lowered its dividend to 7.1p. In a statement, the company’s CEO said that:
“In the current macroeconomic environment, Hilton has not been immune from the impact of heightened inflation. While we remain watchful of any near-term changes in consumer sentiment, we believe that our international scale, strong customer relationships, and diversified protein offer leaves us well-placed within a growing global market.
Hilton Food Group share price dropped sharply after the company warned about its future. The management said that it was seeing its operational costs surge and volumes come under intense pressure. These trends have been significantly worse in its seafood business. Therefore, there is a likelihood that its margins will continue thinning.
Hilton Food Group share price forecast
The daily chart shows that the HFG share price has been in a strong bearish trend in the past few weeks. This sell-off gained steam on Thursday after the company warned about the impact of inflation. As a result, it moved below the important support level at 966p, which was the lowest level on June 15. It also made its biggest down-gap on record.
The stock moved below all moving averages while the Relative Strength Index (RSI) has moved below the oversold level. Therefore, there is a likelihood that the Hilton Food Group share price will continue falling as sellers target the key support at 60p.
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