Hormel announces record Q3 results
Hormel Foods Corporation reported record performance for the fiscal year 2016 third quarter. All comparisons are to the third quarter of fiscal 2015. All earnings per share measures have been adjusted to reflect the two-for-one stock split distributed on February 9, 2016.
The company reported record net earnings of $195.7 million, up 33 percent from net earnings of $146.9 million. It also announced record dollar sales of $2.3 billion, up 5 percent; volume increased 1 percent. Jennie-O Turkey Store operating profit increased 59 percent; volume was up 29 percent and dollar sales increased 20 percent.
We are pleased to announce exceptional results this quarter with three of our five segments delivering volume, sales and earnings growth. This is also our thirteenth consecutive quarter of record earnings which is a testament to our balanced business model,” said Jeffrey M. Ettinger, chairman of the board and chief executive officer. “Excellent results in Refrigerated Foods were driven by the addition of the Applegate business, foodservice sales of OLD SMOKEHOUSE bacon, HORMEL BACON 1 fully cooked bacon, and HORMEL FIRE BRAISED meats, and retail sales of HORMEL NATURAL CHOICE meats. Jennie-O Turkey Store also returned to growth, posting strong double-digit sales and earnings increases,” stated Ettinger.
“Iconic brands such as SPAM and SKIPPY drove increased sales in our Grocery Products and International segments. We enjoyed strong growth from MUSCLE MILK protein products led by innovative new items such as MUSCLE MILK protein smoothies, though Specialty Foods did not show growth this quarter due to the sale of Diamond Crystal Brands,” commented Ettinger.
Refrigerated Foods segment profit increased 24 percent aided by the inclusion of the Applegate business, favorable market conditions, and growth in value-added products. Results reflect a favorable comparison to the prior year, which included Applegate transaction costs of $8.6 million. Sales increased 9 percent on continued success in foodservice products including OLD SMOKEHOUSE bacon and HORMEL FIRE BRAISED meats, and retail products such as HORMEL NATURAL CHOICE meats and HORMEL GATHERINGS party trays. Brands experiencing declines in sales include retail deli products and LLOYDS barbeque ribs.
Jennie-O Turkey Store segment profit increased 59 percent and sales increased 20 percent following the recovery from highly pathogenic avian influenza in fiscal 2015. JENNIE-O value-added foodservice and deli products contributed to sales growth during the quarter. Results reflect a $9.6 million mark-to-market loss on hedges.
“We expect a strong finish to fiscal 2016, led by valued-added sales in Refrigerated Foods, Jennie-O Turkey Store and International,” remarked James P. Snee, president and chief operating officer. “Franchises such as SKIPPY peanut butter products, WHOLLY GUACAMOLE dips, and MUSCLE MILK protein products are positioned to drive sales growth for the fourth quarter,” stated Snee.
“As a result of another excellent quarter we are increasing our 2016 annual guidance to $1.60 to $1.64 per share from $1.56 to $1.60 per share,” commented Snee. “We expect to show sales and earnings growth in fiscal 2017 and will provide a more definitive guidance range on our fourth quarter conference call in November,” added Snee.
Source: Hormel Foods Corp.