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Hormel Foods Achieves Record Second Quarter Earnings

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May 20, 2015

Austin, Minn.

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

All comparisons are to the second quarter of fiscal 2014.

SUMMARY

Second Quarter

• Record diluted EPS of $0.67, up 29 percent from $0.52 per share.

• Record dollar sales of $2.3 billion, increased 2 percent; volume up 5 percent.

• Total segment operating profit increased 29 percent.

• Refrigerated Foods segment operating profit up 52 percent; volume up 1 percent; dollar sales down 8 percent.

• Jennie-O Turkey Store segment operating profit up 41 percent; volume up 14 percent; dollar sales up 15 percent.

• Grocery Products segment operating profit up 1 percent; volume up 4 percent; dollar sales up 1 percent. Excluding incremental net sales of MegaMex Foods products, volume down 4 percent and dollar sales down 5 percent.

• Specialty Foods segment operating profit up 11 percent; volume up 17 percent; dollar sales up 32 percent. Excluding incremental sales of CytoSport Holdings, Inc. (“CytoSport”) products, volume down 6 percent and dollar sales down 6 percent.

• International & Other segment operating profit up 2 percent; volume down 3 percent; dollar sales down 7 percent.

The company reported fiscal 2015 second quarter net earnings of $180.2 million, up 29 percent from net earnings of $140.1 million a year earlier. Diluted earnings per share for the quarter were $0.67, up 29 percent compared to $0.52 last year. Sales for the quarter were $2.3 billion, up 2 percent from the same period in fiscal 2014.

COMMENTARY
“We achieved record second quarter earnings and sales, driving double-digit earnings growth with all five segments delivering increases” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.

“Although declining pork markets drove lower pricing and net sales this quarter, Refrigerated Foods increased operating profit by 52 percent with strong sales growth of foodservice and retail value-added products,” commented Ettinger.

“Jennie-O Turkey Store entered the quarter with excellent momentum and drove robust sales and earnings gains, but exited the quarter with substantial supply chain challenges brought on by avian influenza. Grocery Products benefited from input cost relief and growth of our SPAM® family of products, while the export business in our International segment continued to be challenged by port issues and the strong U.S. dollar,” commented Ettinger. “Specialty Foods delivered earnings growth as the team continues to achieve synergies with the recently acquired CytoSport business.”

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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 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 on pages 29-36 in the company’s Form 10-Q for the fiscal quarter ended January 25, 2015, which includes information about the risk of outbreaks of disease among livestock and poultry flocks to the company’s revenues and operating margins. The company’s Form 10-Q can be accessed at www.hormelfoods.com under “Investors-SEC Filings.”