Hormel Foods Reports 2 Percent Decrease In Net Earnings

May 24, 2013

Hormel Foods Corp. reported its performance for the fiscal year 2013 second quarter. All comparisons are to second quarter or first half of fiscal 2012.

The company reported fiscal 2013 second quarter net earnings of $125.5 million, down 2 percent from net earnings of $127.9 million a year earlier. For the six months ended April 28, 2013, net earnings were $255.2 million, essentially even with net earnings of $256.3 million for the same period last year. Diluted net earnings per share for the six months ended April 28, 2013 were $.95, equal to diluted net earnings per share of $.95 last year.

Sales for the quarter were $2.2 billion, up 7 percent from fiscal 2012. For the six months ended April 28, 2013, sales totaled $4.3 billion, up 5 percent from the same period last year.

“We were pleased to deliver sales and volume growth, despite harvest reductions in both our Refrigerated Foods and Jennie-O Turkey Store operations. In terms of operating profits, improved results by our specialty foods, grocery products, and international and other segments did not fully offset weaker results by our Jennie-O Turkey Store segment. Our earnings were also impacted by non-recurring costs related to our acquisition of the SKIPPY® peanut butter business in the amount of $9 million. Overall, earnings per share of $0.46 during the quarter keep us on track to maintain our full year guidance,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer in a prepared statement.

“Our Specialty Foods team delivered impressive earnings on significant sales growth. The grocery products segment turned in a strong sales quarter, led by HERDEZ® and CHI-CHI’S® Mexican products, HORMEL® COMPLEATS® microwave meals, and DINTY MOORE® stew. Our International team achieved excellent results led by higher sales of the SPAM® family of products,” commented Ettinger. “Although the team at Jennie-O Turkey Store was confronted with higher grain costs and lower commodity turkey meat prices, we are encouraged by the continued growth in sales of our value-added turkey products. We are also excited about the launch of our new HORMEL® REV® snack wraps by our Refrigerated Foods team, which are arriving on-shelf at retailers nationally.”

“The integration of the domestic SKIPPY® peanut butter business into our grocery products segment was completed during the quarter, ahead of schedule. The closing of the acquisition of the China business is on track to be completed by the end of the fiscal year,” stated Ettinger.

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