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Hormel Foods Achieves Record First Quarter Earnings

Performance
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February 19, 2015

Austin, Minn.

Hormel Foods Corporation (NYSE: HRL) today reported record performance for the fiscal year 2015 first quarter.

All comparisons are to the first quarter of fiscal 2014.

SUMMARY

  • Record dollar sales of $2.4 billion, increased 7 percent; volume up 3 percent.
  • Record non-GAAP1 adjusted diluted EPS2 of $0.69, up 21 percent from $0.57 per share, excluding previously announced, nonrecurring charges. Record GAAP diluted EPS of $0.64.
  • Total non-GAAP1 adjusted segment operating profit2 increased 18 percent; GAAP total segment operating profit up 10 percent.
  • Refrigerated Foods segment operating profit up 19 percent; volume down 3 percent; dollar sales up 1 percent.
  • Jennie-O Turkey Store segment operating profit up 56 percent; volume up 9 percent; dollar sales up 10 percent.
  • Grocery Products non-GAAP1 adjusted segment operating profit2 down 8 percent (Grocery Products GAAP segment operating profit down 27 percent including nonrecurring charges relating to closure of the Stockton, California, manufacturing facility); volume up 1 percent; dollar sales up 2 percent. Excluding net sales of MegaMex Foods products not included in the prior year, volume down 5 percent and dollar sales down 2 percent.
  • Specialty Foods segment operating profit down 13 percent; volume up 17 percent; dollar sales up 34 percent. Excluding incremental sales of CytoSport Holdings, Inc. (“CytoSport”) products, volume down 2 percent and dollar sales up 3 percent.
  • International & Other non-GAAP1 adjusted segment operating profit2 up 6 percent (International & Other GAAP segment operating profit down 36 percent including nonrecurring charges related to the exit from international joint venture businesses); volume up 12 percent; dollar sales up 17 percent. Excluding incremental sales of SKIPPY® peanut butter, volume up 7 percent and dollar sales up 12 percent.

Excluding nonrecurring charges, the company reported fiscal 2015 first quarter non-GAAP1 adjusted net earnings2 of $187.3 million, up 22 percent from net earnings of $153.3 million a year earlier. Non-GAAP1 adjusted diluted earnings per share2 for the quarter were $0.69, up 21 percent compared to $0.57 last year.

On a GAAP basis, the company reported fiscal 2015 first quarter net earnings of $171.7 million, up 12 percent from net earnings of $153.3 million a year earlier. Diluted earnings per share for the quarter were $0.64 this year compared to $0.57 per share last year.

Sales for the quarter were $2.4 billion, up 7 percent from the same period in fiscal 2014.

COMMENTARY
“We are off to an excellent start to our fiscal year with double-digit earnings growth and record sales in the first quarter,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.

“Jennie-O Turkey Store increased operating profit by 56 percent, with strong value-added product sales growth, robust turkey markets, and favorable input costs,” remarked Ettinger.

“Refrigerated Foods also turned in an excellent quarter by driving increased value-added sales, aided by the benefit of lower pork costs. Grocery Products was challenged by high input costs and soft sales on some brands, while International & Other delivered increases despite difficult export markets,” commented Ettinger. “Specialty Foods is focused on driving higher margins in the newly acquired CytoSport business, and going forward we believe the business is well positioned to deliver results in line with our expectations.”

Click here to view the full report.

About Hormel Foods

Hormel Foods Corporation, based in Austin, Minnesota, 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. The company 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. The company is a member of the Standard & Poor’s (S&P) 500 Index, S&P Dividend Aristocrats for 2014, was named the 2013 Sustainable Supply Chain of the Year by Refrigerated & Frozen Foods magazine, and was again named one of “The 100 Best Corporate Citizens” by Corporate Responsibility Magazine for the sixth year in a row. Hormel Foods was recognized on the G.I. Jobs magazine list of America’s Top 100 Military Friendly Employers in 2013 and 2014, and named one of the 2014 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 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 on pages 26-30 in the company’s Annual Report for the fiscal year ended October 26, 2014, which can be accessed at www.hormelfoods.com under “Investors-SEC Filings.”