Hormel Foods Corporation has reported results for the third quarter of fiscal 2022. All comparisons are to the third quarter of fiscal 2021 unless otherwise noted.

EXECUTIVE SUMMARY - THIRD QUARTER

• Record net sales of $3.0 billion, up 6%; organic net sales up 3%
• Operating income of $291 million, up 40%; up 17% compared to adjusted operating income of $248 million last year
• Operating margin of 9.6%, compared to 7.2% last year and compared to adjusted operating margin of 8.7% last year
• Pretax earnings of $290 million, up 42%; up 18% compared to adjusted pretax earnings of $245 million last year
• Effective tax rate of 24.5%, compared to 13.3% last year
• Diluted earnings per share of $0.40, up 25%; up 3% compared to adjusted diluted earnings per share of $0.39 last year
• Cash flow from operations of $186 million, up 143%

"We delivered another quarter of record sales and double-digit operating income growth," said Jim Snee, chairman of the board, president, and chief executive officer. "In the current environment, delivering seven straight quarters of record sales and four consecutive quarters of earnings growth is a notable achievement and speaks to the effectiveness of our strategy and the importance of our brands in uncertain times. Our team's execution played a pivotal role in our growth this quarter, as together, we overcame significant challenges, including continued broad-based inflationary pressures, persistent upstream and downstream supply chain disruptions, limited turkey supply, and impacts in China from COVID-related restrictions and temporary plant shutdowns."

"We continued to benefit from our balanced business model during the quarter, led by outstanding contributions from Jennie-O Turkey Store and Refrigerated Foods," Snee said. "The Jennie-O Turkey Store segment significantly outperformed our profit expectations for the quarter as the team managed limited turkey supply effectively and maximized operational performance. Refrigerated Foods delivered double-digit, value-added earnings growth on retail and foodservice items, more than offsetting lower commodity profitability. Similar to last quarter, impressive performance from these businesses helped mitigate higher input and supply chain costs across all segments."

"Our brands remain healthy, continue to generate growth, and are responding well to pricing actions," Snee said. "Consumers and operators continued to engage with our brands due to their value, convenience and versatility. The team drove volume, sales, and share gains at retail for brands such as SKIPPY, Hormel Gatherings, Hormel chili, Dinty Moore, and Mary Kitchen. Likewise, demand for our foodservice products was strong, as operators again turned to our items to help mitigate labor pressures and diversify menu offerings. Value-added products such as our premium bacon and sausage, sliced meats, and our line of premium prepared proteins performed exceptionally well this quarter. Our strategy of building a portfolio with both premium and value offerings continued to serve us well as macroeconomic conditions pressure some of our customers, consumers, and operators. Our teams remain keenly focused on the long-term needs of the business, our strategic priorities, and protecting the equity of our leading brands." 

Read the full outlook here.

Source: Hormel Foods