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Hormel Foods Reports Second Quarter Results and Reaffirms Full Year Earnings Guidance

The company delivers record first half sales and increases full year sales guidance

Hormel Foods Corporation (NYSE: HRL), a leading global branded food company, today reported results for the second quarter of fiscal 2021. All comparisons are to the second quarter of fiscal 2020 unless otherwise noted.


  • Volume of 1.2 billion lbs., down 3%
  • Record net sales of $2.6 billion, up 8%
  • Pretax earnings of $293 million, up 2%
  • Operating margin of 11.1%, compared to 12.1% last year
  • Effective tax rate of 22.1%, compared to 20.6% last year
  • Diluted earnings per share of $0.42, flat compared to last year


“Once again, our balanced business model has proven to be a winning formula as our team delivered record sales in the first half and is on pace to deliver a second consecutive year of record sales,” said Jim Snee, chairman of the board, president and chief executive officer. “We were able to achieve these record results through strong foodservice sales, continued elevated demand in the retail, deli and international channels, and improved supply chain performance.”

“We anticipated rapid demand changes in our foodservice business, and our team delivered, with sales exceeding 2019 pre-pandemic levels,” Snee said. “The investments we have made over the years to build a world-class foodservice business, including an experienced direct sales force and portfolio of products that solve for customer challenges, give us a competitive advantage as the industry recovery accelerates.”

“In addition to foodservice growth, demand in our retail and deli channels remains elevated compared to pre-pandemic levels, especially from brands such as SPAM®, Jennie-O®, Hormel Gatherings®, Hormel® Black Label®, Applegate®, Columbus®, Herdez® and Wholly®,” Snee said. “Finally, our international business has never been stronger, with double-digit growth coming from our China business and branded exports.”

“The supply chain progress we have made in a difficult operating environment is impressive, and our production team members deserve credit for our record results,” Snee said. “Further, we are now benefiting from strategic actions we took before the pandemic to increase production capacity, especially for the pizza toppings and dry sausage categories.”


“We are increasing our full year sales guidance range and reaffirming our earnings per share guidance range of $1.70 to $1.82 per share, both of which exclude the expected impact of the Planters® snack nuts business,” Snee said. “We have a very positive outlook on the foodservice industry and continue to see elevated demand in the retail, deli and international channels. As we enter this inflationary period, we will continue to offset margin pressure with price actions and supply chain improvements. Our experienced management team has a proven ability to navigate and grow our business in volatile market conditions.”

Fiscal 2021 Outlook*
Net Sales Guidance (in billions) $10.20 – $10.80
Diluted Earnings per Share Guidance $1.70 – $1.82
*Does not include the estimated impact from the pending acquisition of the Planters® snack nuts business.
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“Team member safety is our top priority, and to date, over 51 percent of our domestic team members have been fully vaccinated, which is well ahead of the country’s vaccination rate,” Snee said. “We remain focused on continuing to keep our team members safe even as the impact of the pandemic to our business starts to fade.”

In the second quarter, the company absorbed approximately $6 million ($19 million Q2 fiscal 2021 year-to-date) in direct incremental supply chain costs primarily related to enhanced safety measures in its production facilities. The company estimates most of the incremental supply chain costs are temporary and will continue to decline as the pandemic subsides.


In February 2021, the company entered into a definitive agreement to acquire the Planters® snack nuts business. The company expects to close the transaction in June 2021. See the news release dated Feb. 11, 2021, for additional details.


Refrigerated Foods

  • Volume up 3%
  • Net sales up 17%
  • Segment profit up 32%

Strong sales growth was led by a significant recovery in foodservice, growth from retail and deli brands, and higher commodity sales. Nearly every foodservice category experienced growth, led by pizza toppings and brands such as Fontanini® and Hormel® Bacon 1™. Retail and deli growth was driven by numerous brands, including Hormel® Black Label®, Hormel Gatherings®, Sadlers® and Applegate®. The improvement in segment profit was driven by foodservice growth, increased retail fresh pork profits and lower operational costs.

Grocery Products

  • Volume down 14%
  • Net sales down 8%
  • Segment profit down 23%

Volume and sales declined due to difficult comparisons from extremely high levels of demand last year. Demand for branded retail products remained elevated compared to pre-pandemic levels, led by growth in the quarter from Wholly® guacamole and Herdez® salsas and sauces. Segment profit declined due to lower sales. For reference, the segment delivered exceptional growth in the second quarter of fiscal 2020 due to consumer stock-up during the onset of the pandemic.

Jennie-O Turkey Store

  • Volume down 3%
  • Net sales up 2%
  • Segment profit down 54%

Sales increased due to a recovery in foodservice and higher whole bird shipments. Retail sales declined but remain elevated compared to pre-pandemic levels. Segment profit decreased due to the impact of a dramatic increase in feed costs during the quarter.

International & Other

  • Volume flat
  • Net sales up 17%
  • Segment profit up 6%

Sales increased, driven by continued strong results in China and higher sales of branded exports. In China, foodservice sales have fully recovered to pre-pandemic levels. The increase in segment profit was due to growth in China and the Philippines, and higher fresh pork export margins.


In an effort to add an increased level of disclosure and clarity to sales trends compared to the prior year and pre-pandemic levels, net sales have been disaggregated into sales channels. Demand for the company’s retail items remained elevated, as exhibited by double-digit growth over fiscal 2019. Foodservice sales exceeded pre-pandemic levels after steep declines last year caused by the effects of the pandemic. Deli channel sales increased due to growth from branded grab-and-go and prepared foods items. International sales increased due to exceptional results in China and growth from branded exports.

Thirteen Weeks Ended
Net Sales Percent Change (%) April 25, 2021
compared to
April 26, 2020
April 25, 2021
compared to
April 28, 2019
U.S. Retail 16
U.S. Foodservice 28 1
U.S. Deli 4 9
International 11 23
Total 8 11
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Any forward-looking guidance does not include the estimated impact from the pending acquisition of the Planters® snack nuts business.

Income Statement

  • Selling, general and administrative expenses were up 3% compared to the prior year, due to higher employee-related expenses.
  • Advertising spend was $31 million compared to $35 million in the prior year.
  • Interest and investment income increased during the quarter. Higher investment income partially offset the additional interest expense from the bond issuance in the prior year.
  • Operating margin was 11.1% compared to 12.1% in fiscal 2020. Higher raw material and feed costs negatively impacted margins during the quarter.
  • The effective tax rate was 22.1% compared to 20.6% last year. Last year’s rate benefited from a large volume of stock option exercises during the quarter.

Cash Flow Statement

  • Cash flow from operations was $156 million, down 57%. The decrease was due to an intentional increase in inventory to meet elevated demand.
  • The company paid its 371st consecutive quarterly dividend on May 17, 2021, at the annual rate of $0.98 per share, a 5% increase over the prior year.
  • Capital expenditures in the second quarter were $45 million compared to $80 million last year. The company’s target for capital expenditures in fiscal 2021 is $260 million. Large projects include a pepperoni capacity expansion in Nebraska, Project Orion and other projects to support growth of branded products.
  • Share repurchases for the quarter totaled $1 million, representing 18 thousand shares purchased.
  • Depreciation and amortization expense in the second quarter was $52 million compared to $51 million last year. The full-year expense is expected to be approximately $210 million.

Balance Sheet

  • The pending acquisition of the Planters® snack nuts business is expected to be financed through a combination of cash on hand, short-term debt and long-term debt. The company expects this acquisition will responsibly leverage its balance sheet without compromising its disciplined capital allocation policy.
  • Cash on hand decreased to $1.5 billion from $1.7 billion at the beginning of the year.
  • Total debt decreased to $1.0 billion from $1.3 billion at the beginning of the year as the company repaid its $250 million bond at maturity in April 2021.
  • Working capital increased to $2.3 billion from $2.1 billion at the beginning of the year. The increase is due to an intentional increase in inventory to meet elevated demand.


A conference call will be webcast at 8 a.m. CDT on Thursday, May 20, 2021. Access is available at by clicking on “Investors.” The call will also be available via telephone by dialing 888-317-6003 and providing the access code 7986531. An audio replay is available by going to The webcast replay will be available at noon CDT, Thursday, May 20, 2021, and will remain on the website for one year.

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About Hormel Foods – Inspired People. Inspired Food.

Hormel Foods Corporation, based in Austin, Minn., is a global branded food company with over $9 billion in annual revenues across 75 countries worldwide. Its brands include SKIPPY®, SPAM®, Hormel® Natural Choice®, Applegate®, Justin’s®, Columbus®, Wholly®, Hormel® Black Label®, Columbus® and more than 30 other beloved brands. The company is a member of the S&P 500 Index and the S&P 500 Dividend Aristocrats, , was named on the “Global 2000 World’s Best Employers” list by Forbes magazine for three straight years, is one of Fortune magazine’s most admired companies, has appeared on Corporate Responsibility Magazine’s “The 100 Best Corporate Citizens” list for the 12th year in a row, and has received numerous other awards and accolades for its corporate responsibility and community service efforts. The company lives by its purpose statement — Inspired People. Inspired Food.™ — to bring some of the world’s most trusted and iconic brands to tables across the globe. For more information, visit and


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 statements regarding “Forward-Looking Statements” and “Risk Factors” that appear on pages 26-32 in the company’s Form 10-Q for the fiscal quarter ended Jan. 24, 2021, which can be accessed at in the “Investors” section.

Note: Due to rounding, numbers presented throughout this news release may not sum precisely to the totals provided, and percentages may not precisely reflect the absolute figures.