Hormel Foods Reports Third Quarter Increase In Earnings

Aug. 23, 2013

Hormel Foods Corp. reported its performance for the fiscal year 2013 third quarter. All comparisons are to the third quarter or first nine months of fiscal 2012. The company’s full year guidance range of $1.88 to $1.96 was maintained. The diluted earnings per share (EPS) was $.42, up 2 percent from the diluted EPS of $.41. The segment operating profit went up 5 percent. Dollar sales increased to $2.2 billion, up 8 percent and volume went up 3 percent.

The grocery products operating profit was 32 percent; volume went up 27 percent (volume down 1 percent excluding sales of SKIPPY® products) and dollar sales increased to 25 percent (dollar sales were flat excluding sales of SKIPPY® products).

Jennie-O Turkey Store operating profit were up 17 percent; volume grew 1 percent and dollar sales increased 4 percent.

The refrigerated foods operating profit dropped 26 percent; volume went down 3 percent and dollar sales grew 2 percent.

Specialty Foods operating profit went up 8 percent; volume dropped 5 percent and dollar sales went up 5 percent.

International & Other operating profit went up 34 percent; volume increased up 28 percent (volume increased 10 percent excluding sales of SKIPPY® products) and dollar sales went up 31 percent (dollars sales up 11 percent excluding sales of SKIPPY® products).

The company reported fiscal 2013 third quarter net earnings of $113.6 million, up 2 percent from net earnings of $111.2 million a year earlier. For the nine months ended July 28, 2013, net earnings were $368.9 million, as compared to net earnings of $367.4 million the same period last year. Diluted net earnings per share for the nine months ended July 28, 2013 were $1.37, equal to a year ago.

Sales for the quarter were $2.2 billion, up 8 percent from the same period in fiscal 2012. For the nine months ended July 28, 2013, sales totaled $6.4 billion, up 6 percent from the same period last year.

“We had a solid quarter, with all five segments reporting increased sales over last year,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer, in a prepared statement. “We also generated improved earnings, with four of five segments posting increased operating profits. Earnings per share of $0.42 for the third quarter was in line with our expectations and keeps us on pace with our full year adjusted guidance range.”

“Our Grocery Products segment benefitted from good performance by our new SKIPPY® business. Our Jennie-O Turkey Store segment delivered a strong quarter, despite higher grain costs and lower commodity meat prices. Our International business continues to achieve impressive results, led by strong export sales of our SPAM® family of products and fresh pork, as well as the addition of the SKIPPY® business. Higher pork input costs squeezed margins for our retail value-added products, particularly bacon, decreasing our Refrigerated Foods segment results during the quarter,” Ettinger remarked.

“We are excited about the recent roll-out of our HORMEL® REV® snack wraps during the quarter, which is supported by a national advertising campaign that began in late July. I am also pleased with the progress our team has made in integrating and growing sales of SKIPPY® products, both in the U.S. and internationally,” commented Ettinger.

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