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Hormel Foods Achieves Record First Quarter Earnings and Raises Fiscal 2016 Guidance

Performance
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February 16, 2016

Austin, Minn.

Hormel Foods Corporation (NYSE: HRL) today reported record performance for the fiscal year 2016 first quarter.

All comparisons are to the first 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.

SUMMARY

• Record diluted earnings per share of $0.43, up 23 percent from non-GAAP1 adjusted diluted EPS2 of $0.35. 2015 GAAP EPS were $0.32.

• Dollar sales of $2.3 billion, down 4 percent; volume down 3 percent.

• Grocery Products operating profit up 26 percent as compared to 2015 non-GAAP1 adjusted segment operating profit2; volume down 5 percent; dollar sales down 4 percent. Operating profit up 58 percent as compared to 2015 GAAP operating profit.

• Refrigerated Foods operating profit up 65 percent; volume up 5 percent; dollar sales up 2 percent.

• Jennie-O Turkey Store operating profit down 2 percent; volume down 23 percent; dollar sales down 15 percent. Decreases reflect the substantial impact of the avian influenza outbreak, as flocks lost in 2015 created large volume shortfalls in operations and sales.

• Specialty Foods operating profit up 44 percent; volume down 4 percent; dollar sales down 10 percent.

• International & Other operating profit up 1 percent as compared to 2015 non-GAAP1 adjusted segment operating profit2; volume up 4 percent; dollar sales down 7 percent. Operating profit up 69 percent as compared to 2015 GAAP operating profit.

The company reported fiscal 2016 first quarter record net earnings of $235.1 million, up 25 percent from non-GAAP1 adjusted net earnings2 of $187.3 million last year. 2015 GAAP net earnings were $171.7 million. Diluted earnings per share for the quarter were $0.43, up 23 percent from non-GAAP1 adjusted diluted earnings per share2 of $0.35 last year. 2015 GAAP diluted earnings per share were $0.32. Sales for the quarter were $2.3 billion, down 4 percent from last year.

COMMENTARY
“We are pleased to report a double-digit earnings increase for the quarter, with four of our five segments posting earnings growth,” said Jeffrey M. Ettinger, chairman of the board and chief executive officer. “This marks our eleventh consecutive quarter of achieving record earnings results.”

“Our commitment to investing in the sustained growth of the business is evident in our results. Our business performance continues to be influenced by our company-wide spirit of innovation, increased brand support, prudent capital investment, and portfolio-expanding acquisitions,” commented Ettinger. “While sales were muted this quarter by turkey supply constraints and lower pricing due to declining pork markets, we enjoyed strong performance from many great products across our portfolio, such as HORMEL GATHERINGS® party trays, APPLEGATE® natural breakfast sausage, HORMEL® FIRE BRAISEDTM meats, MUSCLE MILK® PRO SERIES protein beverages, and WHOLLY GUACAMOLE® refrigerated dips.”

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About Hormel Foods

Hormel Foods Corporation, based in Austin, Minn., is a multinational manufacturer and marketer of consumer-branded food and meat products, many of which are among the best known and trusted in the food industry. Hormel Foods, which leverages its extensive expertise, innovation and high competencies in pork and turkey processing and marketing to bring branded, value added products to the global marketplace, will celebrate its 125th anniversary in 2016. The company is a member of the Standard & Poor’s (S&P) 500 Index, S&P 500 Dividend Aristocrats, and was named one of “The 100 Best Corporate Citizens” by Corporate Responsibility Magazine for the seventh year in a row. Hormel Foods also received a perfect score on the Human Rights Campaign’s 2016 Corporate Equality Index, was recognized on the 2015 Best for Vets Employers List by Military Times, and was named one of the 2016 40 Best Companies for Leaders by Chief Executive magazine. The company enjoys a strong reputation among consumers, retail grocers, foodservice and industrial customers for products highly regarded for quality, taste, nutrition, convenience and value. For more information, visit https://www.hormelfoods.com.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking information based on management’s current views and assumptions. Actual events may differ materially. Please refer to the cautionary statement regarding Forward-Looking Statements and Risk Factors that appear on pages 28 – 32 in the company’s annual stockholders’ report for the year ended October 25, 2015, which can be accessed at www.hormelfoods.com under “Investors-SEC Filings.”