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Hormel Foods Achieves Record Fourth Quarter and Full Year Results

Hormel Foods World Headquarters
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November 24, 2015

Austin, Minn.

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

All comparisons are to the fourth quarter or full year of fiscal 2014.

SUMMARY

Fourth Quarter

• Record non-GAAP1 adjusted diluted EPS2 of $0.74, up 17 percent from $0.63 per share.
• GAAP diluted EPS of $0.69.
• Dollar sales of $2.4 billion, down 6 percent; volume down 2 percent.
• Grocery Products operating profit up 57 percent; volume up 5 percent; dollar sales up 4 percent. Excluding incremental net sales of MegaMex Foods products, volume down 2 percent and dollar sales down 2 percent.
• Refrigerated Foods operating profit up 27 percent; volume up 2 percent (volume flat excluding sales of APPLEGATE® natural and organic meats); dollar sales down 5 percent (dollar sales down 12 percent excluding sales of APPLEGATE® natural and organic meats).
• Jennie-O Turkey Store operating profit down 23 percent; volume down 21 percent; dollar sales down 18 percent. Decreases reflect the substantial impact of the avian influenza outbreak, as flocks lost earlier in the year created large volume shortfalls in operations and sales.
• Specialty Foods operating profit up 63 percent; volume up 1 percent; dollar sales down 3 percent.
• International & Other operating profit up 3 percent; volume up 5 percent; dollar sales flat.

For the year ended October 25, 2015, non-GAAP1 adjusted net earnings2 were a record $714.4 million, up 19 percent from net earnings of $602.7 million last year. Non-GAAP1 adjusted diluted earnings per share2 were $2.64, up 18 percent from diluted net earnings per share of $2.23 last year. On a GAAP basis, the company reported fiscal 2015 net earnings of $686.1 million. GAAP diluted earnings per share were $2.54. Sales for the year ended October 25, 2015, totaled $9.3 billion, down 1 percent from last year.

COMMENTARY
“I am proud of the excellent fourth quarter delivered by our team, achieving record earnings for the tenth straight quarter. We reported record bottom line results for the full year, with fiscal 2015 adjusted net earnings up 19 percent over last year and all five segments registering earnings growth,” said Jeffrey M. Ettinger, chairman of the board and chief executive officer. “Strong
contributions to these full-year results were made both by such long-standing company brands as SPAM® luncheon meat, HORMEL® pepperoni, and DINTY MOORE® stew, and also by more recently created or acquired product lines such as HORMEL GATHERINGS® party trays, HORMEL® NATURAL CHOICE® meats, WHOLLY GUACAMOLE® dips, and MUSCLE MILK® protein nutrition products. We did face some headwinds during the year, including lower revenues impacted by declining pork markets and the loss of sales and operational efficiency related to highly pathogenic avian influenza in the Jennie-O Turkey Store segment. Our experienced team navigated these challenges to post this impressive bottom line performance.”

“2016 will mark the 50th consecutive year we have increased our dividend, an achievement matched by few other companies. Effective in the new fiscal year the annual dividend will be $1.16 per share, a substantial 16 percent increase,” stated Ettinger.

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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. 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 500 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 seventh year in a row. Hormel Foods was also recognized as a 2015 Military Friendly Employer by G.I. Jobs magazine, on the 2015 Best for Vets Employers List by Military Times, and was named one of the 2015 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 34-40 in the company’s Form 10-Q for the quarter ended July 26, 2015, which was filed with the SEC on September 4, 2015, and can be accessed at www.hormelfoods.com under “Investors-SEC Filings.”