However, said CEO Jeffrey Ettinger, "Changes in consumer behavior resulting from the recession have had a mixed effect on our sales." Specifically, shoppers aren't yet flocking to Hormel's Compleats microwavable meals, a relatively new convenience item.

The grocery guru also affirmed its 2009 earnings-per-share outlook. HRL expects to earn $2.15 to $2.25 during the current fiscal year, although "we recognize there could be continued challenges to our business as a result of the turbulent economy," said Ettinger.

Wall Street is reacting enthusiastically to the report, with HRL gaining 8.5% in the first hour of trading. Ahead of the earnings release, investors appeared to be bracing for the worst. During the past 10 days, traders on the International Securities Exchange (ISE) and the Chicago Board Options Exchange (CBOE) bought to open 2.60 puts for every call on HRL.

Meanwhile, short interest on the shares climbed by 2.1% during the most recent reporting period, and now accounts for 3.3% of the equity's available float (or 4.8 times its average daily volume).

If these skeptics are spooked into unraveling their bearish bets, the resulting buying pressure could help HRL extend its earnings-related rally. Traders will want to keep an eye on the equity's 32-week moving average, though -- the shares haven't toppled this intermediate-term trendline since May 2008, and this resistance level could act as a speed bump to the stock's progress.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.