Hormel Foods Reports Record Fourth Quarter, Full Year Results

All comparisons are to the fourth quarter or full year of fiscal 2012.

HIGHLIGHTS

Fourth Quarter

• Record diluted EPS of $0.58, up 18 percent from $0.49 per share
• Segment operating profit increased 21 percent
• Record dollar sales of $2.3 billion, increased 7 percent; volume up 3 percent
• Grocery Products operating profit up 17 percent; volume up 24 percent (volume down 2 percent excluding sales of SKIPPY^® products); dollar sales up 23 percent (dollar sales up 1 percent excluding sales of SKIPPY^® products)
• Refrigerated Foods operating profit up 30 percent; volume down 5 percent; dollar sales up 4 percent
• Jennie-O Turkey Store operating profit up 25 percent; volume up 8 percent; dollar sales up 7 percent
• Specialty Foods operating profit down 34 percent; volume down 8 percent; dollar sales down 14 percent
• International & Other operating profit up 82 percent; volume up 32 percent (volume up 15 percent excluding sales of SKIPPY^® products); dollar sales up 38 percent (dollar sales up 18 percent excluding sales of SKIPPY^® products)

The company reported fiscal 2013 fourth quarter net earnings of $157.3 million, up 19 percent from net earnings of $132.6 million a year earlier. Diluted earnings per share for the quarter were $0.58, up 18 percent compared to $0.49 last year. Sales for the quarter were $2.3 billion, up 7 percent from the same period in fiscal 2012.

For the year ended October 27, 2013, net earnings were $526.2 million, up 5 percent from net earnings of $500.1 million last year. Diluted net earnings per share were $1.95, up 5 percent from diluted net earnings per share of $1.86 last year. Sales for the year ended October 27, 2013, totaled $8.8 billion, up 6 percent from last year.

COMMENTARY
“We achieved excellent results in the fourth quarter with earnings per share growth of 18 percent and sales up 7 percent. We delivered both segment profit and sales increases in four of our five segments. We are pleased with our team’s ability to drive earnings growth through our on-going efforts to improve operational efficiencies and focus on expanding our value-added franchises, providing strong momentum heading into fiscal 2014,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.

“In looking at the full year, we enjoyed sales growth of 6 percent, ending the year at a record $8.8 billion. We grew earnings per share by 5 percent, finishing at record earnings of $1.95 per share, at the upper end of our adjusted guidance range. We broadened our portfolio with the addition of the iconic SKIPPY^® brand, providing our team another excellent platform for innovation across many categories. We continued to execute our value-added growth strategy this year with successful new product launches, including our new HORMEL^® REV^® snack wraps in the retail space and HORMEL^® FIREBRAISED^TM meats in the foodservice channel,” commented Ettinger.

“This morning we announced a $0.12 per share increase to the annual dividend, or 18 percent, making the annual dividend $0.80 per share in 2014. This marks the 48th consecutive year in which we have increased our dividend, consistent with our objective to deliver superior total returns to our shareholders,” stated Ettinger.

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