Hormel Foods Corp. reported its performance for the fiscal year 2011 fourth quarter and full year.
All comparisons are to the fourth quarter or full year of fiscal 2010. All per share results reported here have been adjusted to give effect to the two-for-one stock split, which was effective Feb. 1, 2011.
All quarterly comparisons are based on a 13 week quarter in fiscal 2011, compared to a 14 week quarter in fiscal 2010
- Diluted earnings per share (EPS) of $.43, was down 4 percent from $.45 per share.
- Segment operating profit decreased 5 percent.
- Dollar sales were $2.1 billion, increased 2 percent; volume was down 7 percent.
- Grocery products operating profit was up 3 percent; volume was down 6 percent; dollar sales were down 2 percent.
- Refrigerated foods operating profit was down 19 percent; volume down 8 percent; dollar sales were up 1 percent.
- Jennie-O Turkey Store operating profit was up 4 percent; volume was down 11 percent; dollar sales were up 2 percent.
- Specialty foods operating profit was up 12 percent; volume was down 1 percent; dollar sales were up 10 percent.
- All other operating profit was up 3 percent; volume was up 2 percent; dollar sales were up 12 percent
All annual comparisons are based on a 52 week fiscal year in 2011, compared to a 53 week fiscal year in 2010.
Record diluted EPS was $1.74, up 19 percent from diluted EPS of $1.46.
Segment operating profit was up 13 percent.
Record dollar sales were $7.9 billion, up 9 percent; volume was up 1 percent.
Grocery products operating profit was up 4 percent; volume flat; dollar sales were up 2 percent.
Refrigerated roods operating profit was up 6 percent; volume down 1 percent; dollar sales were up 10 percent.
Jennie-O Turkey Store operating profit was up 43 percent; volume was up 1 percent; dollar sales were up 12 percent.
Specialty foods operating profit was down 5 percent; volume was up 3 percent; dollar sales were up 7 percent.
All Other operating profit was up 39 percent; volume was up 13 percent; dollar sales were up 26 percent.
The company reported fiscal 2011 fourth quarter net earnings of $117.3 million, down 3 percent from earnings of $121.1 million a year earlier. Diluted earnings per share for the quarter were $0.43, down 4 percent compared to $0.45 last year. Sales for the quarter were $2.1 billion, up 2 percent from the same period in fiscal 2010.
For the year ended Oct. 30, 2011, net earnings were $474.2 million, up 16 percent from adjusted1 net earnings of $409.0 million last year, and up 20 percent from U.S. GAAP net earnings of $395.6 million. Diluted net earnings per share were $1.74, up 15 percent from diluted adjusted1 net earnings per share of $1.51 last year and up 19 percent from U.S. GAAP diluted earnings per share of $1.46. Sales for the year ended Oct. 30, 2011, totaled $7.9 billion, up 9 percent from last year.
“I am proud of the team for finishing an outstanding year with a fourth quarter that met our expectations. For the quarter, we are pleased to have generated segment profit increases in four out of five segments and an overall net sales increase. Our tonnage was down in comparison with the 14 week quarter last year, but we held our own on volumes in the face of significant pricing actions,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer in a prepared statement.
"In looking at the full year, we delivered significant sales growth of 9 percent, ending the year at a record $7.9 billion, with all five segments registering increases. We also grew earnings per share by an excellent 19 percent, finishing at record earnings of $1.74 per share. We enjoyed a particularly strong performance by the Jennie-O Turkey Store team, and both our All Other (International) and Refrigerated Foods segments also generated nice profit increases for the year. We enhanced our support of our key Hormel and Jennie-O-Turkey Store brands in fiscal 2011 with effective advertising campaigns, and added to the portfolio of our fast-growing MegaMex Foods joint venture through the acquisition of the Wholly Guacamole line and other related products," commented Ettinger.
"This morning we announced a $.09 per share increase to the annual dividend (or 17.6 percent), making the new dividend $.60 per share. This marks the 46th consecutive year in which we have increased our dividend, and further evidences our intention to deliver superior total returns to our shareholders," stated Ettinger.
The Grocery Products segment profit increased 3 percent, due in part to improved results by the MegaMex Foods joint venture. Sales overall for the quarter were down 2 percent. The SPAM® family of products and HORMEL® Bacon Toppings showed solid sales growth in the quarter.
The refrigerated foods segment profit declined 19 percent, as lower pork operating margins and higher commodity input costs negatively impacted results. Net sales for the quarter were up 1 percent, led by HORMEL® convenience bacon and HORMEL® CURE 81® hams in the Meat Products group and HORMEL® NATURAL CHOICE® deli meats and pizza toppings in the Foodservice group.
Jennie-O Turkey Store had a solid quarter, with segment profit up 4 percent and sales up 2 percent. The continued sales growth of value-added products and improved efficiencies throughout the supply chain and operations offset higher feed costs during the quarter.
The specialty foods segment posted operating profits 12 percent higher than last year on a 10 percent increase in sales. Sales mix improvements on bulk and nutritional items and higher sales of private label canned meats contributed to the improved results.
The all other segment, which consists primarily of Hormel Foods International, posted segment profits that were 3 percent ahead of last year, and sales grew 12 percent. Results were primarily driven by stronger fresh pork exports.
General corporate expenses were lower, driven principally by a reduction in the lower of cost or market inventory reserve.
"We expect to deliver sales and earnings growth in fiscal 2012, even amidst some difficult comparisons and less-than-favorable macro conditions. In particular, we are looking for our grocery products, specialty foods and all other (international) units to drive profit growth in fiscal 2012, as our Refrigerated Foods and Jennie-O Turkey Store segments maintain their position against historically high results. We also anticipate the comparisons to be more difficult in the first half of the year, becoming more favorable later in the year. Taking all of the relevant factors into account, we are setting our 2012 guidance range at $1.79 to $1.89 per share," remarked Ettinger
