AMERICAN HORMEL FOODS ACHIEVES RECORD QUARTERLY SALES

U.S. food processor Hormel Foods, the home of canned spam, announced its seventh consecutive quarter of record sales, driven by the reopening of restaurants and cafes after the pandemic. The company posted record sales values for its seventh consecutive quarter of increased earnings, with the majority of its sales coming in the fourth quarter.

Last year, the amount of gross sales recorded was US$3 billion, 6% higher than the previous year. This means that the net sales obtained by taking, as a point of comparison, the natural net sales, are at the same level as the actual annual net sales.

Likewise, operating income reached US$291 million, up 40%, an increase of 17% compared to last year’s adjusted operating income of US$248 million. Pre-tax earnings reached US$290 million, an increase of 42%, an 18% increase compared to adjusted pre-tax earnings of US$245 million last year.

“We delivered another quarter of record sales and double-digit operating income growth,” said Jim Snee, chairman, president and chief executive officer. “In the current environment, delivering seven consecutive quarters of record sales and four consecutive quarters of earnings growth is a remarkable achievement and speaks to the effectiveness of our strategy and the importance of our brands in uncertain times. Our team’s execution played a key role in our growth this quarter as together we overcame significant challenges, including continued broad-based inflationary pressures, persistent upstream and downstream supply chain disruptions, limited turkey supply and the impacts in China of COVID-related restrictions and temporary plant closures.” added the executive.

“We continued to benefit from our balanced business model during the quarter, led by outstanding contributions from Jennie-O Turkey Store and Refrigerated Foods.” said Snee. “The Jennie-O Turkey Store segment significantly exceeded our earnings expectations for the quarter as the team managed the limited turkey supply effectively and maximized operating performance. Refrigerated Foods generated double-digit value-added earnings growth in retail and foodservice items, more than offsetting lower commodity profitability. As in the year-ago quarter, the impressive performance of these businesses helped mitigate higher input and supply chain costs across all segments. Earnings growth was also supported by the Planters® nut snacks business, which continues to meet our expectations.”

“Our brands remain healthy, continue to generate growth, and are responding well to pricing actions,” said Snee. “Consumers and operators continued to interact with our brands because of their value, convenience and versatility. The team drove volume, sales and retail profit share for brands such as SKIPPY, Hormel Gatherings, Hormel chili, Dinty Moore and Mary Kitchen. Similarly, demand for our foodservice products was strong as operators again turned to our items to help mitigate labor pressures and diversify menu offerings. Value-added products such as our premium bacon and sausage, sliced meats and our premium prepared protein line performed exceptionally well this quarter. Our strategy of building a portfolio of premium and value offerings continued to serve us well as macroeconomic conditions put pressure on some of our customers, consumers and operators. Our teams remain very focused on the long-term needs of the business, our strategic priorities and protecting the equity of our leading brands.”

Tyson President Tom Snee said the business remains healthy as they continued to navigate through the most difficult operating conditions since the company’s 130-year history. “We are confident in our ability to exceed our previous sales guidance due to strong demand for our foodservice and core store grocery brands, higher turkey markets and the pricing actions we have taken across the portfolio. Our long-term strategy to meet consumers where they want to eat, with a broad portfolio of products, has been crucial to our growth in the current environment.”Snee added.

“We expect high cost inflation to persist, primarily related to operations, logistics and raw material inputs,” Snee said. “As a result, we are revising our full-year earnings guidance range. We believe that most of the increasing cost pressures we are currently absorbing are transitory and are likely to abate in the coming quarters. We will continue to leverage our balanced business model and experienced management team as we navigate these challenging business conditions.”he concluded.

AMERICAN HORMEL FOODS ACHIEVES RECORD QUARTERLY SALES

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