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Hormel Foods Achieves Record Fourth Quarter And Full Year Results

Performance
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November 25, 2014

Austin, Minn.

Hormel Foods Corporation (NYSE: HRL) today reported record performance for the fiscal year 2014 fourth quarter and full year.

All comparisons are to the fourth quarter or full year of fiscal 2013.

SUMMARY

Fourth Quarter

– Record diluted EPS of $0.63, up 9 percent from $0.58 per share

– Segment operating profit increased 9 percent

– Record dollar sales of $2.5 billion, increased 9 percent; volume up 3 percent

– Grocery Products operating profit down 21 percent; volume down 5 percent; dollar sales down 3 percent

– Refrigerated Foods operating profit up 10 percent; volume up 1 percent; dollar sales up 9 percent

– Jennie-O Turkey Store operating profit up 45 percent; volume up 7 percent; dollar sales up 11 percent

– Specialty Foods operating profit down 14 percent; volume up 15 percent (volume down 7 percent excluding sales of CytoSport Holdings, Inc. (“CytoSport”) products); dollar sales up 31 percent (dollar sales down 4 percent excluding sales of CytoSport products); CytoSport acquisition-related charges, including transaction costs and inventory adjustment to fair market value, were approximately $9.3 million

– International & Other operating profit up 3 percent; volume up 6 percent; dollar sales up 13 percent

Fiscal Year

– Record diluted EPS of $2.23, up 14 percent from diluted EPS of $1.95

– Segment operating profit up 16 percent

– Record dollar sales of $9.3 billion, up 6 percent; volume up 1 percent

– Grocery Products operating profit down 9 percent; volume up 3 percent (volume down 3 percent excluding incremental sales of SKIPPY® products); dollar sales up 3 percent (dollar sales down 2 percent excluding incremental sales of SKIPPY® products)

– Refrigerated Foods operating profit up 45 percent; volume flat; dollar sales up 9 percent

– Jennie-O Turkey Store operating profit up 23 percent; volume flat; dollar sales up 4 percent

– Specialty Foods operating profit down 20 percent; volume down 5 percent (volume down 10 percent excluding sales of CytoSport products); dollar sales down 3 percent (dollar sales down 11 percent excluding sales of CytoSport products)

– International & Other operating profit up 19 percent; volume up 15 percent (volume up 5 percent excluding incremental sales of SKIPPY® products); dollar sales up 19 percent (dollar sales up 10 percent excluding incremental sales of SKIPPY® products)

The company reported fiscal 2014 fourth quarter net earnings of $171.3 million, up 9 percent from net earnings of $157.3 million a year earlier. Diluted earnings per share for the quarter were $0.63, up 9 percent compared to $0.58 last year. Sales for the quarter were $2.5 billion, up 9 percent from the same period in fiscal 2013.

For the year ended October 26, 2014, net earnings were a record $602.7 million, up 15 percent from net earnings of $526.2 million last year. Diluted net earnings per share were $2.23, up 14 percent from diluted net earnings per share of $1.95 last year. Sales for the year ended October 26, 2014, totaled a record $9.3 billion, up 6 percent from last year.

COMMENTARY
“We enjoyed a strong finish to the year, delivering record fourth quarter sales and earnings,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer. “Our Refrigerated Foods and Jennie-O Turkey Store segments were able to capitalize on growth of value-added sales and higher meat commodity markets to lead the way.”

“We hit the nine billion dollar mark in annual sales for the first time in our Company’s history, fueled by our branded, value-added product portfolios. We closed the year with record earnings per share of $2.23, a penny above the midpoint of our full year earnings guidance issued last November,” commented Ettinger. “Our Refrigerated Foods, Jennie-O Turkey Store, and International segments each delivered double-digit segment operating profit growth this year. High meat input costs and related pricing hampered growth of certain Grocery Products brands in the back half of the year. We have also substantially completed the integration of the MUSCLE MILK® brand in our Specialty Foods segment,” remarked Ettinger.

“This morning we announced a 25 percent increase to the dividend, or $0.20 per share, making the annual dividend $1.00 per share in 2015. This marks the 49th consecutive year in which we have increased our dividend, consistent with our objective to deliver superior total returns to our shareholders,” stated Ettinger.

Click here to view the full report.

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. 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
http://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 31-37 in the company’s Form 10-Q for the quarter ended July 27, 2014, which was filed with the SEC on September 5, 2014, and can be accessed at www.hormelfoods.com under “Investors-SEC Filings.”