AUSTIN, MINN. — Sales remained lower than expected, particularly in the Jennie-O and Spam segments of the food business for Hormel Foods Corp., when it reported its fourth quarter, which ended Oct. 27.

Hormel reported net earnings of $220.2 million, equal to 40¢ per share on the common stock, up from $195.9 million, or 36¢ per share, in the previous year’s fourth quarter. Sales declined to $3.14 billion from $3.19 billion during the same period last year. Volume decreased by 1.11 billion lbs from 1.16 billion lbs in 2023 for the fourth quarter.

Sales for the entire fiscal year came in at $11.92 billion, down from $12.11 billion in 2023. Net earnings for this year stood at $805.04 million, equal to $1.47 per share on the common stock, up from $793.6 million or $1.45 million per share from 2023. 

Jim Snee, chief executive officer of Hormel Foods, explained the company’s move on modernizing and cost-cutting initiatives.

“The combination of underlying business strength and the capture of $75 million in operating income benefit from our Transform and Modernize (T&M) initiative helped to offset a dynamic consumer environment, the steep decline in whole bird turkey commodity markets, and the production disruption at our Suffolk, Va., facility,” Snee said.

Hormel expects to realize an incremental $100 million to $150 million in benefits from the T&M initiative during fiscal 2025.

In Hormel’s Retail segment, net sales for 2024, fell 4.8% to $7.37 billion from $7.75 billion in 2023. Retail volume sold fell 4.6 % to 2.92 billion lbs from 3.05 billion lbs, and segment profit declined 2.6% to $562.77 million from $577.7 million the year prior.

During the fourth quarter in retail, Hormel explained that it saw year-over-year growth with branded items like Applegate, Hormel Black Label bacon and Jennie-O ground turkey.

For the Foodservice segment, sales increased 5.6% to $3.85 billion up from $3.64 billion. Volume went up 3.4% to 1.06 billion lbs from 1.03 billion lbs.

Under the Foodservice category in the fourth quarter, Hormel saw volume and net sales growth across premium prepared protein, salty snacks, turkey, bacon, and pizza toppings categories. Segment profits decreased due to lower margins in Heritage Premium Meats, poultry, and pizza toppings, along with higher selling, general, and administrative expenses.

International segment sales fell 2.8% to $701.5 million from $721.5 million the year before. 

For its fourth quarter analysis, Hormel saw net sales grow in China and saw strong branded exports for SPAM luncheon meat and Skippy peanut butter. The company did not have considerable volume declines for turkey exports, resulting in lower volume than the previous year. 

“Segment profit for the quarter was significantly above the prior year, due to improved export margins, favorable results in China, and growth from our investments in the Philippines and Indonesia,” Hormel added.