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Hormel Foods Reports First Quarter Results

Performance
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February 15, 2008

Austin, Minn.

Hormel Foods Corporation (NYSE: HRL) today reported its performance for the fiscal 2008 first quarter.

HIGHLIGHTS

¨ Diluted EPS of $.64, up 19 percent from $.54 per share in 2007

¨ Dollar sales of $1.62 billion increased 8 percent from 2007 (up 5 percent excluding acquisitions)

¨ Volume up 5 percent compared to last year (up 3 percent excluding acquisitions)

¨ Operating profit up 25 percent from 2007

¨ Grocery Products operating profit up 10 percent; volume up 6 percent; dollar sales up 10 percent

¨ Refrigerated Foods operating profit up 50 percent; volume up 8 percent (up 3 percent excluding acquisitions); dollar sales up 8 percent (up 3 percent excluding acquisitions)

¨ Jennie-O Turkey Store operating profit up 16 percent; volume up 3 percent; dollar sales up 5 percent

¨ Specialty Foods operating profit up 1 percent; volume down 4 percent; dollar sales up 7 percent

¨ All Other operating profit up 39 percent; volume up 6 percent; dollar sales up 21 percent

The company reported fiscal 2008 first quarter net earnings of $88.2 million, up 17 percent from earnings of $75.3 million a year earlier. Diluted earnings per share for the quarter were $.64 this year compared to $.54 per share last year. Sales totaled $1.62 billion, up from $1.50 billion in fiscal 2007.

COMMENTARY

“Our team has ample reason to be proud of our results in the first quarter, continuing the momentum we achieved in the last quarter of fiscal 2007,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer. “Our Refrigerated Foods segment led the way, as lower pork input costs combined with increased sales of value-added products generated a significant increase in earnings. Our Grocery Products segment also delivered higher than expected sales and earnings, aided by strong sales of the SPAM family of products and continued growth of the HORMEL COMPLEATS microwave product line. We are pleased to have recently announced our decision to build a new $89 million plant in Dubuque, Iowa, scheduled to open in November 2009, to support our HORMEL COMPLEATS microwave tray business.”

“Jennie-O Turkey Store overcame higher commodity grain input costs through a combination of recaptured pricing, product mix improvements, and manufacturing efficiencies, to turn in an excellent quarter as well. Our International segment had another outstanding quarter, posting double-digit increases in dollar sales and profits, primarily attributable to strong export sales of the SPAM family of products and fresh pork,” Ettinger said. “Finally, the Specialty Foods segment showed strong sales growth but flat earnings, as it sought to offset increased input costs with added contract manufacturing volumes and an improved product mix.”

“We expect higher grain input and fuel costs for the balance of the year, which will impact Jennie-O Turkey Store and portions of our Refrigerated Foods business. However, anticipated lower hog input costs, price advances, and manufacturing efficiencies will help offset these increased costs,” Ettinger continued. “Our success with adding value to our products and improving the product mix, along with our balanced business model, should allow us to continue to be successful in spite of volatility in the commodity markets.”

SEGMENT OPERATING HIGHLIGHTS – FIRST QUARTER

Grocery Products (14% of Net Sales, 22% of Total Operating Profit)

The Grocery Products segment had a great start to the year with segment profit up 10 percent compared to last year. Continued growth of the HORMEL COMPLEATS microwave product line was a key driver during the quarter. Strong sales of the SPAM family of products and HORMEL and STAGG chili also contributed to top and bottom line results for the segment. Results for the CHI-CHI’S and VALLEY FRESH product lines were down for the quarter compared to last year but additional marketing and promotional support is planned to drive improved results for these brands.

Refrigerated Foods (53% of Net Sales, 39% of Total Operating Profit)

Operating profit increased 50 percent in the Refrigerated Foods segment compared to the first quarter last year. Lower pork raw material input costs led to significant margin expansion across the segment’s value-added businesses. Sales of key value-added products also increased during the quarter. The Meat Products business unit recorded double-digit sales increases in HORMELrefrigerated entrees and HORMEL NATURAL CHOICE sandwich meats. The integration of Burke Corporation continues to proceed as planned and was accretive to the first quarter results.

Jennie-O Turkey Store (18% of Net Sales, 22% of Total Operating Profit)

The Jennie-O Turkey Store segment posted operating profit results 16 percent higher than last year for the first quarter. The segment was able to overcome higher commodity grain input costs through a combination of higher pricing, product mix improvements, and manufacturing efficiencies. Value-added revenue grew 5 percent with each of the retail, deli, and foodservice divisions contributing to the increase. Key products posting strong first quarter results includeJENNIE-O TURKEY STORE frozen turkey burgers, JENNIE-O TURKEY STORE marinated tenderloins, and JENNIE-O TURKEY STORE rotisserie deli products.

Specialty Foods (12% of Net Sales, 11% of Total Operating Profit)

Operating profit in the Specialty Foods segment increased 1 percent compared to the first quarter of fiscal 2007. Sales and operating profit were higher for the quarter in the Specialty Products business unit behind strong demand for contract manufacturing. Century Foods International also posted improved profit results due to a favorable product mix shift. Operating profit was slightly lower in the Diamond Crystal Brands business unit as a better product mix was unable to completely offset higher input costs.

All Other (3% of Net Sales, 6% of Total Operating Profit)

The International business unit had another strong quarter with operating profit up 39 percent compared to last year. Strong export sales of the SPAM family of products, STAGG chili, and fresh pork were key drivers during the quarter. The profitability of our China operations also improved compared to last year as a result of higher selling prices and a continued emphasis on growing value-added sales. Equity in earnings of affiliates improved compared to last year due to better results at our Purefoods-Hormel joint venture in the Philippines.

Net Interest and Investment Income

Net interest and investment income declined for the quarter due primarily to $6.3 million of lower returns on our rabbi trust investment. Interest expense was slightly higher for the quarter due to higher outstanding short-term debt balances related to the Burke acquisition.

OUTLOOK

“We are reconfirming our fiscal 2008 guidance range of $2.30-$2.40 per share. Although we anticipate pressure from higher than expected grain and energy costs, we expect to continue to benefit from lower protein input costs. The strength of our core businesses, the growth of our value-added products, and the ability of our people to adapt to changes in the business environment should allow us to meet our goals,” Ettinger concluded.

DIVIDENDS

Effective Feb. 15, 2008, the company will pay its 318th consecutive quarterly dividend. The annual rate is $.74.

CONFERENCE CALL

A conference call will be Webcast at 10:00 a.m. CT on Friday, Feb. 15, 2008. Access is available at www.hormelfoods.com. If you do not have Internet access and want to listen to the call over the phone, the dial in number is 800-218-0713. An audio replay is available by calling 800-405-2236 and entering access code 11107655#. The audio replay will be available beginning at 12:00 p.m. CT on Friday, Feb. 15, 2008, through 11:59 p.m. CT on March 1, 2008. The Webcast replay will be available at 12:00 p.m. CT, Friday, Feb. 15, 2008, and archived for one year.

Statements Follow

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Segment Data

Fiscal 2008 First Quarter Segment Operating Results (in Thousands)

FIRST QUARTER – 13 WEEKS ENDED
NET SALES January 27, 2008 January 28, 2007 % Change
Grocery Products $ 227,415 $ 206,216 10.3
Refrigerated Foods 857,460 797,972 7.5
Jennie-O Turkey Store 291,449 276,614 5.4
Specialty Foods 188,787 177,079 6.6
All Other 56,054 46,202 21.3
Total $ 1,621,165 $ 1,504,083 7.8
OPERATING PROFIT
Grocery Products $ 36,369 $ 32,984 10.3
Refrigerated Foods 62,806 41,942 49.7
Jennie-O Turkey Store 34,804 29,971 16.1
Specialty Foods 18,293 18,042 1.4
All Other 9,025 6,474 39.4
Total segment operating profit 161,297 129,413 24.6
Net interest and investment income (11,658) (4,278) (172.5)
General corporate expense (10,328) (9,627) (7.3)
Income before tax $ 139,311 $ 115,508 20.6
HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Thirteen Weeks Ended
January 27, 2008 January 28, 2007
Net sales $ 1,621,165 $ 1,504,083
Cost of products sold 1,219,146 1,144,646
GROSS PROFIT: 402,019 359,437
Expenses:
Selling and delivery 207,944 198,644
Administrative & general 45,475 41,910
TOTAL EXPENSES: 253,419 240,554
Equity in earnings of affiliates 2,369 903
OPERATING INCOME: 150,969 119,786
Other income & expenses:
Interest & investment income (loss) (4,938) 2,080
Interest expense (6,720) (6,358)
EARNINGS BEFORE
INCOME TAXES: 139,311 115,508
Provision for income taxes 51,130 40,183
(effective tax rate) 36.70% 34.79%
NET EARNINGS $ 88,181 $ 75,325
NET EARNINGS PER SHARE
Basic $ .65 $ .55
Diluted $ .64 $ .54
WEIGHTED AVG SHARES OUT
Basic 135,706 137,533
Diluted 137,666 139,567
DIVIDENDS DECLARED
PER SHARE $ .185 $ .15
HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
January 27, 2008 October 28, 2007
(In Thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 144,234 $ 149,749
Short-term marketable securities 47,799 0
Accounts receivable 345,483 366,621
Inventories 669,594 646,968
Deferred income taxes 52,701 52,583
Prepaid expenses & other current assets 19,546 15,804
TOTAL CURRENT ASSETS 1,279,357 1,231,725
INTANGIBLES 755,597 757,993
OTHER ASSETS 428,847 437,331
PROPERTY, PLANT & EQUIPMENT, NET 967,457 966,601
TOTAL ASSETS $3,431,258 $3,393,650
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
TOTAL CURRENT LIABILITIES $ 582,578 $ 664,777
LONG-TERM DEBT – LESS CURRENT MATURITIES 350,000 350,005
OTHER LONG-TERM LIABILITIES 529,829 494,085
SHAREHOLDERS’ INVESTMENT 1,968,851 1,884,783
TOTAL LIAB. & SHAREHOLDERS’ INVESTMENT $3,431,258 $3,393,650
HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Thirteen Weeks Ended
January 27, 2008 January 28, 2007
OPERATING ACTIVITIES (In Thousands)
Net earnings $ 88,181 $ 75,325
Adjustments to reconcile to net cash provided by

operating activities:

Depreciation 29,812 28,171
Amortization of intangibles 3,248 2,938
Equity in earnings of affiliates (2,999) (1,136)
Provision for deferred income taxes (7,885) (2,664)
Loss (Gain) on property/equipment sales and plant facilities 529 (215)
Changes in operating assets and liabilities net of acquisitions:
Decrease in accounts receivable 21,138 19,842
Decrease (Increase) in inventories, prepaid expenses, and

other current assets

9,119 (2,144)
(Increase) Decrease in pension assets (395) 1,464
Increase (Decrease) in accounts payable, accrued expenses, and

pension and post-retirement benefits

8,658 (71,093)
Other 1,107 3,984
NET CASH PROVIDED BY OPERATING ACTIVITIES 150,513 54,472
INVESTING ACTIVITIES
Sale of available-for-sale securities 107,409 192,800
Purchase of available-for-sale securities (155,208) (216,624)
Acquisitions of businesses (1,013) (13,020)
Purchases of property / equipment (31,895) (35,593)
Proceeds from sales of property / equipment 698 2,200
Decrease (Increase) in investments, equity in affiliates,

and other assets

14,332 (25,894)
NET CASH USED IN INVESTING ACTIVITIES (65,677) (96,131)
FINANCING ACTIVITIES
Principal payments on short-term debt (70,000) (2,576)
Principal payments on long-term debt (54) (18)
Dividends paid on common stock (20,346) (19,223)
Share repurchase (14,162) 0
Other 14,211 5,994
NET CASH USED IN FINANCING ACTIVITIES (90,351) (15,823)
DECREASE IN CASH AND CASH

EQUIVALENTS

(5,515) (57,482)
Cash and cash equivalents at beginning of year 149,749 172,485
CASH AND CASH EQUIVALENTS AT END OF QUARTER $ 144,234 $ 115,003
ABOUT HORMEL FOODS CORPORATION

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 quality, value-added brands to the global marketplace. For each of the past nine years, Hormel Foods has been named one of “The Best Big Companies in America” by Forbesmagazine. The company enjoys a strong reputation among consumers, retail grocers and foodservice 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 that appear on pages 32-35 in the company’s Annual Report for the fiscal year ended Oct. 28, 2007, which can be accessed at www.hormelfoods.com under “Investors-SEC Filings.”