Hormel Foods Corp. reported record performance for the fiscal year 2015 first quarter. All comparisons are to the first quarter of fiscal 2014. Excluding nonrecurring charges, the company reported fiscal 2015 first quarter non-GAAP adjusted net earnings of $187.3 million, up 22 percent from net earnings of $153.3 million a year earlier. Non-GAAP adjusted diluted earnings per share for the quarter were $0.69, up 21 percent compared to $0.57 last year.
On a GAAP basis, the company reported fiscal 2015 first quarter net earnings of $171.7 million, up 12 percent from net earnings of $153.3 million a year earlier. Diluted earnings per share for the quarter were $0.64 this year compared to $0.57 per share last year. Sales for the quarter were $2.4 billion, up 7 percent from the same period in fiscal 2014.
“We are off to an excellent start to our fiscal year with double-digit earnings growth and record sales in the first quarter,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.
“Jennie-O Turkey Store increased operating profit by 56 percent, with strong value-added product sales growth, robust turkey markets, and favorable input costs,” remarked Ettinger. “Refrigerated Foods also turned in an excellent quarter by driving increased value-added sales, aided by the benefit of lower pork costs. Grocery Products was challenged by high input costs and soft sales on some brands, while International & Other delivered increases despite difficult export markets,” commented Ettinger. “Specialty Foods is focused on driving higher margins in the newly acquired CytoSport business, and going forward we believe the business is well positioned to deliver results in line with our expectations.”
Segment profit for Refrigerated Foods increased 19 percent driven by growth of value-added products and strategic margin management. Sales for the quarter were up 1 percent, with the increases led by retail sales of HORMEL pepperoni and HORMEL GATHERINGS party trays, and foodservice sales of HORMEL BACON 1 fully cooked bacon and HORMEL pizza toppings. The dissolution of the Precept Foods joint venture offset a portion of the sales increases.
Jennie-O Turkey Store segment profit grew 56 percent in the first quarter, driven by the continued growth of value-added products and beneficial turkey commodity prices. Sales for the quarter increased 10 percent, including strong sales of JENNIE-O lean ground turkey and JENNIE-O rotisserie turkey.
Excluding nonrecurring charges related to the closing of the Stockton, California, manufacturing facility, Grocery Products segment profit decreased 8 percent. Segment sales were up 2 percent with the additional net sales of MegaMex Foods products not included in the prior year. Products delivering sales growth this quarter included the SPAM family of products, as well asHERDEZ salsas and sauces and WHOLLY GUACAMOLE dips in the MegaMex Foods joint venture. The segment experienced softer sales of SKIPPY peanut butter and HORMEL chili.
We expect our Refrigerated Foods, Jennie-O Turkey Store, and International value-added businesses to continue to drive results throughout the year, benefitting from strong demand and lower input costs. Jennie-O Turkey Store will likely experience less favorable commodity meat markets offsetting some of those gains as the year progresses,” commented Ettinger. “We look for Grocery Products and Specialty Foods to contribute to our growth goals in the back half of the year, with lower input costs, brand-building media campaigns, and innovative new products.”
“Our large portfolio of leading brands and sustained focus on innovation will allow us to build upon the momentum of our excellent start to the year,” concluded Ettinger.
Source: Hormel Foods Corp.
