AUSTIN, Minn. – Weaker results in the Grocery Products and Refrigerated Foods segments contributed to a 14 percent decline in earnings for Hormel Foods Corp. during the first quarter of fiscal 2012.
For the quarter ended Jan. 29, the company had earnings of $128,395,000, equal to 49 cents per share on the common stock, which compared with $148,826,000, or 56 cents per share, during the same quarter of the previous year. Sales for the quarter were $2,039,439,000, up 6 percent from $1,921,558,000 during the first quarter of fiscal 2011.
“Our first-quarter earnings of 48c per share was the second best in our company’s history, albeit down from a year ago,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer. “Sales grew 6 percent, with four of our five segments registering sales gains in the quarter.
“I was pleased with the strong results achieved by our Jennie-O Turkey Store segment, led by increased retail value-added sales. Our International business also delivered a solid quarter, fueled by strong export sales. Results of our Refrigerated Foods segment were hindered by significantly lower pork operating margins, and our Grocery Products segment results were adversely impacted by softer sales in the center of the store.”
The Grocery Products segment had an operating profit of $44,093,000, down 9 percent from $48,562,000 during the same quarter of the previous year. Sales for the quarter were $269,479,000, down 3 percent from $276,899,000.
Operating profit within the Refrigerated Foods segment was $53,749,000, down 44 percent from $96,134,000 during the same quarter of the previous year. The segment had sales of $1,083,525,000, up 7 percent from $1,010,702,000.
The Jennie-O Turkey Store segment had an operating profit of $76,762,000, up 4 percent from $73,825,000 during the same quarter of the previous year. Sales in the segment were $377,371,000, up 4 percent from $364,517,000 during the same quarter of the previous year.
“We anticipated a challenging operating environment this year and for comparisons to be more difficult in the first half of the year and to become more favorable in the back half,” Ettinger said. “We continue to look for slowly improving results from our Refrigerated Foods segment as pork operating margins return to more normalized levels. Sales in our Grocery Products segment and Meat Products group should also improve, as we begin to see the effects of our new advertising campaigns supporting our Hormel and Spam brands. Taking all of the relevant factors into account, we are maintaining our full-year earnings guidance range of $1.79 to $1.89 per share.”
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