Hormel Foods Reports Record Second Quarter Results

Sales for the quarter were $2 billion, up 3 percent from fiscal 2011. For the six months ended April 29, 2012, sales totaled $4.1 billion, up 4 percent from the same period last year.

24 May 2012 --- Hormel Foods Corporation has reported fiscal 2012 second quarter net earnings of $127.9 million, up 17 percent from net earnings of $109.6 million a year earlier. For the six months ended April 29, 2012, net earnings were $256.3 million, down 1 percent from net earnings of $258.4 million the same period last year.  Diluted net earnings per share for the six months ended April 29, 2012 were $.95, equal to diluted net earnings per share of $.95 last year.

Sales for the quarter were $2 billion, up 3 percent from fiscal 2011. For the six months ended April 29, 2012, sales totaled $4.1 billion, up 4 percent from the same period last year.

“We are pleased to report record earnings and sales for the second quarter. This is a good example of our balanced business model in action, as we were able to increase earnings in four out of five segments.” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer, “Sales grew three percent, again with four of our five segments registering gains.”

“Our Jennie-O Turkey Store segment delivered another outstanding quarter, driven by value-added sales growth. Our International business also achieved impressive results, led by strong export sales. Both our Grocery Products and Specialty Foods segments returned to earnings growth during the quarter. Results of our Refrigerated Foods segment were significantly pressured by lower pork operating margins,” Ettinger remarked.

“We are particularly encouraged by the continued growth of our Jennie-O Turkey Store value-added sales and our MegaMex Foods joint venture,” Ettinger stated.

The Grocery Products segment operating profit increased 10 percent, aided by lower pork and beef input costs.  Net sales exceeded last year by 1 percent. Strong results by our SPAM family of products and our MegaMex Foods products offset soft sales of our microwave products and DINTY MOORE stew.

Refrigerated Foods segment profit declined 25 percent, due primarily to lower pork operating margins during the quarter.  Net sales for the quarter declined 1 percent, with lower commodity pork sales offsetting strong sales of HORMEL NATURAL CHOICE deli meats, HORMEL party trays, HORMEL pepperoni and DILUSSO deli products. Foodservice value-added sales also grew during the quarter.

Jennie-O Turkey Store had another excellent quarter, with segment operating profit up 50 percent from a year ago, driven by value-added sales. Net sales for the quarter rose 7 percent, led by sales of JENNIE-O TURKEY STORE retail tray pack and turkey burgers.

The Specialty Foods segment operating profit increased 9 percent, as pricing actions taken earlier helped offset higher raw material costs.  Net sales grew 12 percent, led by sales of private label canned meats, ingredients, bulk and nutritional items.

The All Other segment, which consists primarily of Hormel Foods International, grew segment profit 52 percent, and grew net sales by 11 percent, driven by stronger exports of fresh pork and the SPAM family of products. 

“Our second quarter results provide positive momentum heading into the back half of the year.  We believe continued weaker pork operating margins will be more than offset by stronger results from our other segments. We expect sales in the center of the store to slowly improve as we continue our advertising support of our HORMEL and SPAM brands. Taking all of the relevant factors into account, we are maintaining our full-year earnings guidance range of $1.79 to $1.89 per share,” Ettinger concluded.