AUSTIN, Minn. – Hormel Foods Corp. showed some strong signs early on in fiscal 2016 posting earnings of 43 cents per share for the first quarter ending Jan. 24.
Net earnings were set at more than $ 235.1 million compared to $187 million from 2015.
“We are pleased to report a double-digit earnings increase for the quarter, with four of our five segments posting earnings growth,” said Jeffrey M. Ettinger, chairman of the board CEO. “This marks our eleventh consecutive quarter of achieving record earnings results.”
The company posted net sales for the first quarter of $2.29 billion, a 4.3 percent decline from the same period the previous year.
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| Hormel chairman and CEO Jeffrey M. Ettinger |
Ettinger cited “turkey supply constraints and lower pricing due to declining pork markets” as the main reason for the drop in revenue."
Operating profits for its Grocery Products segment were up 26 percent compared to 2015, thanks to favorable raw material costs and improved plant efficiencies according to the company.
The Refrigerated Food segments remained strong with operating profits increasing to 65 percent from the same period last year. The release cited dollar sales increasing 2 percent and the growth in retail products like Hormel Cure 81 hams and Hormel refrigerated entrees. The segment also benefitted from the recent addition of the Applegate business, as well as growth in the Old Smokehouse brand.
One of Hormel’s most recognizable brands, Jennie-O Turkey Store posted operating profits down two percent with dollar sales down 15 percent. The company stated that the decrease was due to the avian flu outbreak.
Hormel executives reaffirmed its steady growth gives it reason for optimism for the remainder of the year.
“Our strong earnings performance in the first quarter, led by Refrigerated Foods, Grocery Products, and Specialty Foods, along with the positive momentum at Jennie-O Turkey Store, has given us confidence to raise our fiscal 2016 earnings guidance range from $1.43 to $1.48 per share to $1.50 to $1.56 per share,” stated James P. Snee, President and COO.
