Hormel reports record fiscal year, Q4 results
Hormel Foods Corporation reported record performance for the fiscal year 2015 fourth quarter and full year. All comparisons are to the fourth quarter or full year of fiscal 2014.
For the year ended October 25, 2015, non-GAAP adjusted net earnings were a record $714.4 million, up 19 percent from net earnings of $602.7 million last year. Non-GAAP adjusted diluted earnings per share were $2.64, up 18 percent from diluted net earnings per share of $2.23 last year. On a GAAP basis, the company reported fiscal 2015 net earnings of $686.1 million. GAAP diluted earnings per share were $2.54. Sales for the year ended October 25, 2015, totaled $9.3 billion, down 1 percent from last year.
For the fourth quarter, dollar sales totaled $2.4 billion, down 6 percent; volume decreased 2 percent.Refrigerated Foods operating profit was up 27 percent, and volume up 2 percent (volume flat excluding sales of Applegate natural and organic meats). Dollar sales were down 5 percent (dollar sales down 12 percent excluding sales of Applegatenatural and organic meats). Jennie-O Turkey Store operating profit decreased 23 percent, volume decreased 21 percent, and dollar sales decreased 18 percent. Decreases reflect the substantial impact of the avian influenza outbreak, as flocks lost earlier in the year created large volume shortfalls in operations and sales.
“I am proud of the excellent fourth quarter delivered by our team, achieving record earnings for the tenth straight quarter. We reported record bottom line results for the full year, with fiscal 2015 adjusted net earnings up 19 percent over last year and all five segments registering earnings growth,” said Jeffrey M. Ettinger, chairman of the board and chief executive officer. “Strong contributions to these full-year results were made both by such long-standing company brands as SPAM luncheon meat, HORMEL pepperoni, and DINTY MOORE stew, and also by more recently created or acquired product lines such as HORMEL GATHERINGS party trays, HORMEL NATURAL CHOICE meats, WHOLLY GUACAMOLE dips, and MUSCLE MILK protein nutrition products. We did face some headwinds during the year, including lower revenues impacted by declining pork markets and the loss of sales and operational efficiency related to highly pathogenic avian influenza in the Jennie-O Turkey Store segment. Our experienced team navigated these challenges to post this impressive bottom line performance.
"2016 will mark the 50th consecutive year we have increased our dividend, an achievement matched by few other companies. Effective in the new fiscal year the annual dividend will be $1.16 per share, a substantial 16 percent increase,” stated Ettinger.
“I am pleased with our momentum heading into fiscal 2016, and we should enjoy renewed revenue growth as the year proceeds,” remarked Ettinger. “We expect lower input costs to provide a tailwind for our Grocery Products and Refrigerated Foods value-added businesses next year, offsetting modestly lower pork operating margins. Strong demand for our APPLEGATE natural and organic products will be an additional growth catalyst for the Refrigerated Foods segment. We look for Jennie-O Turkey Store to return to growth in the back half of fiscal 2016 if there are no significant recurrences of avian influenza, benefitting from strong demand for branded JENNIE-O products and low grain costs. Specialty Foods should deliver increases through the growth of its MUSCLE MILK protein nutrition products, and we expect International to achieve year-over-year improved results through the expansion of our business in China along with increased sales of our SPAM and SKIPPY family of products. Taking these factors into account, we are setting our fiscal 2016 earnings guidance range at $2.85 to $2.95 per share.”
Source: Hormel Foods Corp.