Meat and Poultry Industry News

Hormel reports record $8.2 billion in sales for fiscal year

Hormel Foods Corp. reported its performance for the fiscal year 2012 fourth quarter and full year. For the year ended October 28, 2012, net earnings were $500.1 million, up 5 percent from net earnings of $474.2 million last year. Diluted net earnings per share were $1.86, up 7 percent from diluted net earnings per share of $1.74 last year. Sales for the year ended October 28, 2012, totaled $8.2 billion, up 4 percent from last year.

The company reported fiscal 2012 fourth quarter net earnings of $132.6 million, up 13 percent from earnings of $117.3 million a year earlier. Diluted earnings per share for the quarter were $0.49, up 14 percent compared to $0.43 last year. Sales for the quarter were $2.2 billion, up 3 percent from the same period in fiscal 2011.

“We achieved solid results in the quarter with earnings per share and sales up 14 percent and 3 percent, respectively. We are pleased to have generated both segment profit and sales increases in four out of five segments. We continue to enjoy sales and volume growth in many of our value-added franchises, demonstrating that our growth strategies are working,” said Jeffrey M. Ettinger, chairman of the board, president and CEO.

"In looking at the full year, we finished in the upper half of our guidance range. We delivered sales growth of 4 percent, ending the year at a record $8.2 billion, with all five segments registering increases. We also grew earnings per share by 7 percent, finishing at record earnings of $1.86 per share. We enjoyed another strong performance by our Jennie-O Turkey Store and International teams. Our Grocery Products and Specialty 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 2012 with effective advertising campaigns, and ran a new advertising campaign celebrating the 75th anniversary of our iconic SPAM brand. Finally, we met our goal of $2 billion in sales of new products by 2012," commented Ettinger.

In the fourth quarter, the Grocery Products segment profit increased 22 percent, led by strong sales of the SPAM family of products and the portfolio of products within Hormel’s MegaMex Foods joint venture. Refrigerated Foods segment profit declined 12 percent, as strong results in the value-added businesses were not able to fully offset lower pork operating margins and losses in the company’s live hog operations. Sales for the quarter were down 3 percent, due to lower commodity meat prices. Value-added products grew in the quarter, led by Hormel pepperoni and party trays in the Meat Products group and Hormel Natural Choice deli meats in the Foodservice group.

"We expect to deliver sales and earnings growth in fiscal 2013. In particular, we are looking for our Refrigerated Foods, Grocery Products, Specialty Foods and All Other (International) segments to drive profit growth in fiscal 2013, as our Jennie-O Turkey Store segment goes up against higher grain costs and historically high results. We plan on making additional cuts to both our turkey and pork harvest levels during fiscal 2013, to reduce our exposure to volatile commodity markets. Taking all of the relevant factors into account, we are setting our 2013 guidance range at $1.90 to $2.00 per share," remarked Ettinger.

Source: Hormel Foods Corp.

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