Company delivers volume growth in each segment
and makes further progress on key initiatives
AUSTIN, Minn.,
Aug. 31,
2023 /PRNewswire/ -- Hormel Foods Corporation (NYSE:
HRL), a Fortune 500 global branded food company, today reported
results for the third quarter of fiscal 2023. All comparisons are
to the third quarter of fiscal 2022 unless otherwise noted.
EXECUTIVE SUMMARY — THIRD QUARTER
- Net sales of $3.0 billion
- Operating income of $217 million,
reflecting the impact of an adverse arbitration ruling totaling
$70 million; adjusted operating
income1 of $287
million
- Operating margin of 7.3%; adjusted operating margin1
of 9.7%
- Earnings before income taxes of $208
million; adjusted earnings before income taxes1
of $278 million
- Effective tax rate of 21.7%
- Diluted net earnings per share of $0.30, adjusted diluted net earnings per
share1 of $0.40
- Cash flow from operations of $317
million
EXECUTIVE COMMENTARY & OUTLOOK
"Our third quarter
results reflect the strength of our leading brands, the value of
our balanced business model and our team's commitment to improving
our performance," said Jim Snee,
chairman of the board, president and chief executive officer. "In
an increasingly dynamic and competitive environment, we grew volume
across all our segments, delivered adjusted net earnings per
share1 in line with last year and made further progress
addressing the near-term challenges impacting the business. This
progress included reducing inventory, building momentum in the
Planters® snack nuts business and driving
adjusted operating margin1 improvement compared to last
year."
"The investments into our brands and continued improvement
across our supply chain have generated positive performance in the
marketplace," Snee said. "Volume growth for the quarter was broad
based, driven by a recovery in turkey, strong demand for many of
our foodservice items and growth from leading retail brands,
including SPAM®, Hormel®
Black Label®, Planters®
and Hormel® pepperoni. Our Foodservice
segment delivered another quarter of strong bottom-line growth, and
the Retail segment delivered margins ahead of our expectations.
Earnings growth from our U.S. businesses in aggregate was more than
offset by significantly weaker-than-expected results in our
International segment, supply chain disruption caused by a
third-party logistics provider shutdown and an adverse arbitration
ruling."
"We remain focused on driving volume and earnings growth, as
well as delivering on our commitments to improve our business,"
Snee said. "The operating environment domestically and abroad
continues to be dynamic, and we anticipate consumers and operators
to remain highly intentional in their spending. As we close the
year, we expect a strong finish from our Foodservice segment,
incremental savings from a series of projects aimed at
reducing costs and complexity throughout our system, and further
synergies from our implementation of GoFWD. Additionally, we expect
continued softness in our International segment and earnings
pressure from heightened competition at retail. Our continued
investments into our brands, disciplined financial strategy and
balanced approach across our businesses position us well for future
growth as we close a challenging 2023."
For the balance of the year, the Company expects:
- Modest volume growth in the fourth quarter, which assumes
growth from the Foodservice segment, continued recovery in turkey
and improved fill rates in key categories;
- Fourth quarter net sales to be between $3.1 billion and $3.6
billion. Full-year net sales are expected to be (4)% to
flat, reflecting performance to date and current assumptions for
raw material input costs in the fourth quarter; and
- Fourth quarter diluted net earnings per share to be down from
last year, reflecting continued weakness in the International
segment and lower Retail segment results. Full-year diluted net
earnings per share are expected to be $1.51 to $1.57, and
adjusted diluted net earnings per share1 are expected to
be $1.61 to $1.67.
UPDATE ON STRATEGIC PRIORITIES
Protect & grow our core brands
- We grew sales in the marketplace for
Hormel® chili,
Hormel® Natural
Choice® lunchmeat,
Jennie-O® lean ground turkey,
Hormel® Square Table™ entrees
and the SPAM® family of
products.2
- Hormel® Black
Label® bacon is the fastest growing national
brand in the category over the last year — with volume growth of
13% versus last year3 — and has gained buyers versus
last year, +7%.3
- Skippy® peanut butter varieties are
now certified vegan by the Vegan Awareness Foundation.
Vegan-certified varieties include creamy and Super
Chunk® peanut butter in regular and natural
varieties, as well as squeeze packs and no-sugar-added peanut
butter spreads.
Amplify scale in snacking & entertaining
- Household penetration gains were seen within the snacking and
entertaining portfolio, led by Hormel®
Gatherings® party trays,
Planters® snack nuts and
Hormel® pepperoni.4
- The Planters® snack nuts business is
benefiting from innovation, increased promotional support and the
launch of a national ad campaign spotlighting the new trio of
flavored cashew varieties. Recent trends have improved, with buyers
and volume increasing versus last year.5
- Hormel® pepperoni — the No. 1 selling
brand of pepperoni in the U.S. — grew volume, sales and household
penetration during the quarter.4 The brand also
partnered with Universal Pictures and Amblin Entertainment to
celebrate the 30th anniversary of the blockbuster adventure
"Jurassic Park," with its Tear Into Flavor sweepstakes.
Enhance growth of our ethnic & Food Forward
portfolios
- Our Applegate® products outpaced
category dollar sales growth during the quarter in the breaded
chicken, breakfast sausage, bacon and hot dog
categories.6
- The Applegate team launched Applegate Naturals™
frittata bites, the industry's first and only Certified Humane
frozen egg bites.
- During the quarter, the Herdez® brand
outpaced category trends for dollar and volume sales in the salsa,
taco sauce, hot sauce, refrigerated guacamole and refrigerated
salsa categories.2
- Two Wholly® products
were honored with 2023 Best Bite Awards from Delicious Living
magazine: Wholly® Guacamole
classic and Wholly® avocado
diced.
Expand leadership in foodservice
- We delivered volume growth during the third quarter across our
premium offerings, including bacon, pizza toppings, prepared
proteins, breakfast sausage and Fontanini®
Italian meats and sausages.7
- We launched several new items at the School Nutrition
Association's Annual National Conference, including
Jennie-O® branded turkey barbacoa, turkey
pot roast and a turkey breakfast bar.
Aggressively develop our global presence
- Demonstrating the value of our balanced model, foodservice
sales in China increased 14%
compared to last year,7 helping offset declines in the
retail business in China.
- We launched Skippy® peanut butter in
Germany, home to a 1.9 billion euro sweet spreads
category.8
- We continued to support our global brands around the world
through innovation, co-branding and advertising, including
Skippy® peanut butter ice cream in
South Korea, new Calbee
SPAM® brand flavored potato chips in
Japan, and the Keep It Real TV
campaign, which showcased a series of delicious
SPAM® brand recipes across the
United Kingdom.
Continue to transform our company
- We delivered another quarter of e-commerce sales growth, led by
the Planters®,
Jennie-O® and
SPAM® brands.9
- We were recognized as one of America's Best Companies to Work
For by U.S. News & World Report, named one of America's
Greatest Workplaces by Newsweek, for the first time earned a place
on Fast Company's 2023 Best Workplaces for Innovators list, and
were ranked No. 14 on the Selling Power's 50 Best Companies to Sell
For list.
- During the quarter, we announced an expansion of our free
college tuition program for eligible team members in the U.S. to
earn their degrees, or complete non-degree programs, for free.
SEGMENT HIGHLIGHTS – THIRD QUARTER
Retail
- Volume up 1%
- Net sales down 2%
- Segment profit down 7%
Volume growth was driven by the value-added meats, bacon,
snacking and entertaining, and emerging brands verticals. In
addition to a recovery across the turkey portfolio, volume and net
sales grew for many items, including our
SPAM® family of products,
Hormel® Gatherings® party
trays, Hormel® pepperoni and
Applegate® natural and organic meats. Net
sales declined due to the difficult comparison from high levels of
demand for Skippy® spreads last year and
lower market-driven pricing on raw bacon items. Segment profit
declined due to unfavorable mix and increased brand investments,
partially offset by the benefit from pricing actions across the
portfolio, improved bacon volumes and higher equity in earnings
from MegaMex Foods.
Foodservice
- Volume up 2%
- Net sales down 3%
- Segment profit up 14%
Volume for the quarter increased, driven by growth in our
affiliated businesses and strong demand in many branded categories,
including pizza toppings, premium bacon and breakfast sausage, and
premium prepared proteins. Brands such as Cafe
H®, Hormel® Fire
Braised™, Fontanini®, Old
Smokehouse® and Hormel®
Bacon 1™ delivered volume gains compared to the
prior year. Net sales declined, primarily due to lower net pricing
in certain categories, such as bacon, reflecting raw material
commodity deflation. Segment profit increased due to the
contribution from higher volumes and improved mix.
International
- Volume up 10%
- Net sales down 6%
- Segment profit down 50%
Net sales declined as a result of lower branded export sales and
lower results in China.
Foodservice sales in China
improved sequentially throughout the third quarter, partially
offsetting the difficult net sales comparison from sales to
food-security programs last year. In addition to growth from the
Skippy® and
Planters® brands, strong volume growth was
driven by low-margin commodity fresh pork and turkey exports.
Segment profit declined significantly due to unfavorable pork and
turkey commodity markets, continued softness in China and lower branded export demand.
SELECTED FINANCIAL DETAILS
- For the third quarter, advertising spend was $43 million, compared to $37 million last year. The Company expects
full-year advertising expense to increase compared to the prior
year.
- The effective tax rate was 21.7%, compared to 24.5% for the
previous year. The Company benefited from favorable changes in
certain U.S. income and deductions in the fiscal 2022 federal tax
return filing. The effective tax rate for fiscal 2023 is expected
to be between 21.0% and 23.0%.
- Capital expenditures were $78
million, compared to $61
million last year. The Company's target for capital
expenditures in fiscal 2023 is $280
million.
- Depreciation and amortization expense was $75 million, compared to $65 million last year. The full-year expense is
expected to be approximately $285
million.
- As disclosed in a Form 8-K filed with the SEC on Aug. 22, 2023, the Company received an
unexpected, unfavorable arbitration ruling involving an isolated
commercial dispute with a third party. The estimated pre-tax impact
of $70.0 million is reflected in
operating expense and accrued liabilities. The associated one-time
payment is expected to be made in the fourth quarter of fiscal
2023.
PRESENTATION
A conference call will be webcast at
8 a.m. CT on Aug. 31, 2023. Access is available at
www.hormelfoods.com by clicking on "Investors." The call
will also be available via telephone by dialing 888-259-6580
(toll-free) or 416-764-8624 (international). An audio replay is
available by going to www.hormelfoods.com. The webcast replay
will be available at noon CT,
Aug. 31, 2023, and will remain on the
website for one year.
ABOUT HORMEL FOODS - Inspired People. Inspired
Food.™
Hormel Foods Corporation, based in Austin, Minn., is a global branded food
company with over $12 billion in
annual revenue across more than 80 countries worldwide. Its brands
include Planters®, Skippy®,
SPAM®, Hormel® Natural Choice®,
Applegate®, Justin's®, Wholly®,
Hormel® Black Label®,
Columbus®, Jennie-O® and more
than 30 other beloved brands. The Company is a member of the
S&P 500 Index and the S&P 500 Dividend Aristocrats, was
named on the "Global 2000 World's Best Employers" list by
Forbes magazine for three years,
is one of Fortune magazine's most admired companies, has appeared
on the "100 Best Corporate Citizens" list by 3BL Media 13 times,
and has received numerous other awards and accolades for its
corporate responsibility and community service efforts. The Company
lives by its purpose statement — Inspired People. Inspired
Food.™ — to bring some of the world's most trusted and iconic
brands to tables across the globe. For more information, visit
www.hormelfoods.com.
FORWARD-LOOKING STATEMENTS
This news release contains
"forward-looking" information within the meaning of the federal
securities laws. The "forward-looking" information may include
statements concerning the Company's outlook for the future as well
as other statements of beliefs, future plans, strategies, or
anticipated events and similar expressions concerning matters that
are not historical facts. Words or phrases such as "should result,"
"believe," "intend," "plan," "are expected to," "targeted," "will
continue," "will approximate," "is anticipated," "estimate,"
"project," or similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain
risks and uncertainties that could cause actual results to differ
materially from historical earnings and those anticipated or
projected, which factors include, but are not limited to, risks
related to the deterioration of economic conditions; the COVID-19
pandemic; risks associated with acquisitions and divestitures;
potential disruption of operations including at co-manufacturers,
suppliers, logistics providers, customers, or other third-party
service providers; risk of loss of a material contract; the
Company's inability to protect information technology systems
against, or effectively respond to, cyber attacks or security
breaches; deterioration of labor relations, labor availability or
increases to labor costs; general risks of the food industry,
including food contamination; outbreaks of disease among livestock
and poultry flocks; fluctuations in commodity prices and
availability of raw materials and other inputs; fluctuations in
market demand for the Company's products; damage to the Company's
reputation or brand image; climate change, or legal, regulatory, or
market measures to address climate change; risks of litigation;
potential sanctions and compliance costs arising from government
regulation; compliance with stringent environmental regulations and
potential environmental litigation; and risks arising from the
Company's foreign operations. Please refer to the cautionary
statements regarding "Risk Factors" and "Forward-Looking
Statements" that appear in our most recent Annual Report on Form
10-K and Quarterly reports on Form 10-Q, which can be accessed at
www.hormelfoods.com in the "Investors" section, for additional
information. In making these statements, the Company is not
undertaking, and specifically declines to undertake, any obligation
to address or update each or any factor in future filings or
communications regarding the Company's business or results, and is
not undertaking to address how any of these factors may have caused
changes to discussions or information contained in previous filings
or communications. Though the Company has attempted to list
comprehensively these important cautionary risk factors, the
Company wishes to caution investors and others that other factors
may in the future prove to be important in affecting the Company's
business or results of operations. The Company cautions readers not
to place undue reliance on forward-looking statements, which
represent current views as of the date made.
Note: Due to rounding, numbers presented throughout this
news release may not sum precisely to the totals provided, and
percentages may not precisely reflect the absolute figures.
1 COMPARISON OF U.S. GAAP TO NON-GAAP
FINANCIAL MEASURES
The non-GAAP adjusted financial measures
of adjusted operating income, adjusted operating margin, adjusted
earnings before income taxes, and adjusted diluted net earnings per
share are presented to provide investors with additional
information to facilitate the comparison of past and present
operations. Adjusted operating income, adjusted operating margin,
adjusted earnings before income taxes and adjusted diluted net
earnings per share exclude the impact of an adverse arbitration
ruling. The tax impact was calculated using the effective tax rate
for the quarter in which the expense was incurred.
The Company believes these non-GAAP financial measures provide
useful information to investors because they are the measures used
to evaluate performance on a comparable year-over-year basis.
Non-GAAP measures are not intended to be a substitute for GAAP
measures in analyzing financial performance. These non-GAAP
measures are not in accordance with generally accepted accounting
principles and may be different from non-GAAP measures used by
other companies.
The tables below show the calculations to reconcile from the
GAAP measures to the non-GAAP adjusted measures.
HORMEL FOODS
CORPORATION
|
RECONCILIATION OF
NON-GAAP MEASURES
|
In thousands, except
per share amounts
|
Unaudited
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
July 30,
2023
|
|
July 31,
2022
|
|
GAAP
|
Arbitration
Ruling
|
Non-GAAP
|
|
Reported
GAAP
|
|
Non-GAAP
%
Change
|
Net Sales
|
$
2,963,299
|
$
—
|
$
2,963,299
|
|
$ 3,034,414
|
|
(2.3)
|
Cost of Products
Sold
|
2,465,251
|
—
|
2,465,251
|
|
2,528,364
|
|
(2.5)
|
Gross
Profit
|
498,048
|
—
|
498,048
|
|
506,049
|
|
(1.6)
|
Selling, General, and
Administrative
|
291,073
|
(70,000)
|
221,073
|
|
222,147
|
|
(0.5)
|
Equity in Earnings of
Affiliates
|
9,784
|
—
|
9,784
|
|
7,138
|
|
37.1
|
Operating
Income
|
216,759
|
70,000
|
286,759
|
|
291,040
|
|
(1.5)
|
Interest and
Investment Income
|
9,239
|
—
|
9,239
|
|
14,411
|
|
(35.9)
|
Interest
Expense
|
18,372
|
—
|
18,372
|
|
15,615
|
|
17.7
|
Earnings Before
Income Taxes
|
207,626
|
70,000
|
277,626
|
|
289,836
|
|
(4.2)
|
Provision for Income
Taxes
|
45,055
|
15,190
|
60,245
|
|
71,010
|
|
(15.2)
|
Net
Earnings
|
162,571
|
54,810
|
217,381
|
|
218,826
|
|
(0.7)
|
Less: Net Earnings
(Loss) Attributable to
Noncontrolling Interest
|
(108)
|
—
|
(108)
|
|
(89)
|
|
(21.4)
|
Net Earnings
Attributable to Hormel
Foods Corporation
|
$
162,679
|
$
54,810
|
$
217,489
|
|
$
218,915
|
|
(0.7)
|
|
|
|
|
|
|
|
|
Diluted Net Earnings
Per Share
|
$
0.30
|
$
0.10
|
$
0.40
|
|
$
0.40
|
|
—
|
|
|
|
|
|
|
|
|
Operating Margin (%
of Net Sales)
|
7.3
|
|
9.7
|
|
9.6
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
July 30,
2023
|
|
July 31,
2022
|
|
GAAP
|
Arbitration
Ruling
|
Non-GAAP
|
|
Reported
GAAP
|
|
Non-GAAP
%
Change
|
Net Sales
|
$
8,911,930
|
$
—
|
$
8,911,930
|
|
$ 9,175,331
|
|
(2.9)
|
Cost of Products
Sold
|
7,426,514
|
—
|
7,426,514
|
|
7,577,062
|
|
(2.0)
|
Gross
Profit
|
1,485,417
|
—
|
1,485,417
|
|
1,598,269
|
|
(7.1)
|
Selling, General, and
Administrative
|
725,621
|
(70,000)
|
655,621
|
|
672,777
|
|
(2.6)
|
Equity in Earnings of
Affiliates
|
42,213
|
—
|
42,213
|
|
19,951
|
|
111.6
|
Operating
Income
|
802,009
|
70,000
|
872,009
|
|
945,443
|
|
(7.8)
|
Interest and
Investment Income
|
20,700
|
—
|
20,700
|
|
20,078
|
|
3.1
|
Interest
Expense
|
55,042
|
—
|
55,042
|
|
44,913
|
|
22.6
|
Earnings Before
Income Taxes
|
767,666
|
70,000
|
837,666
|
|
920,608
|
|
(9.0)
|
Provision for Income
Taxes
|
170,230
|
15,190
|
185,420
|
|
200,393
|
|
(7.5)
|
Net
Earnings
|
597,437
|
54,810
|
652,247
|
|
720,215
|
|
(9.4)
|
Less: Net Earnings
(Loss) Attributable to
Noncontrolling Interest
|
(200)
|
—
|
(200)
|
|
112
|
|
(279.1)
|
Net Earnings
Attributable to Hormel
Foods Corporation
|
$
597,637
|
$
54,810
|
$
652,447
|
|
$
720,103
|
|
(9.4)
|
|
|
|
|
|
|
|
|
Diluted Net Earnings
Per Share
|
$
1.09
|
$
0.10
|
$
1.19
|
|
$
1.31
|
|
(9.2)
|
|
|
|
|
|
|
|
|
Operating Margin (%
of Net Sales)
|
9.0
|
|
9.8
|
|
10.3
|
|
|
END NOTES
2Circana Total US MULO;13 weeks
ended 7/16/2023 vs YAG
3Circana Scan Panel; Total US All Outlet; 52 weeks ended
7/16/2023 vs YAG
4Circana Scan Panel; Total US All Outlet; 13 weeks ended
7/16/2023 vs YAG
5Circana Scan Panel; Total US All Outlet; 4 weeks ended
7/26/23 vs YAG
6Nielsen; Total US xAOC; dollar sales for 12 weeks ended
7/29/2023 vs YAG
7Internal data
8Euromonitor – December
2021, Germany
9Retailer POS aggregated online sales - total Hormel, 12
weeks ended 07/30/2023
HORMEL FOODS CORPORATION
SEGMENT DATA
In thousands
Unaudited
|
|
|
|
Quarter
Ended
|
|
|
July 30,
2023
|
|
July 31,
2022
|
|
%
Change
|
Volume
(lbs.)
|
|
|
|
|
|
|
Retail
|
|
748,146
|
|
742,103
|
|
0.8
|
Foodservice
|
|
255,822
|
|
250,513
|
|
2.1
|
International
|
|
90,550
|
|
81,993
|
|
10.4
|
Total
|
|
1,094,518
|
|
1,074,609
|
|
1.9
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
Retail
|
|
$
1,891,746
|
|
$
1,924,553
|
|
(1.7)
|
Foodservice
|
|
890,949
|
|
917,671
|
|
(2.9)
|
International
|
|
180,605
|
|
192,190
|
|
(6.0)
|
Total
|
|
$
2,963,299
|
|
$
3,034,414
|
|
(2.3)
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
|
|
|
|
Retail
|
|
$
151,128
|
|
$
163,092
|
|
(7.3)
|
Foodservice
|
|
146,270
|
|
128,798
|
|
13.6
|
International
|
|
12,222
|
|
24,464
|
|
(50.0)
|
Total Segment
Profit
|
|
309,619
|
|
316,354
|
|
(2.1)
|
Net Unallocated
Expense
|
|
101,886
|
|
26,429
|
|
285.5
|
Noncontrolling
Interest
|
|
(108)
|
|
(89)
|
|
(21.4)
|
Earnings Before
Income Taxes
|
|
$
207,626
|
|
$
289,836
|
|
(28.4)
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
July 30,
2023
|
|
July 31,
2022
|
|
%
Change
|
Volume
(lbs.)
|
|
|
|
|
|
|
Retail
|
|
2,267,363
|
|
2,435,581
|
|
(6.9)
|
Foodservice
|
|
747,484
|
|
760,677
|
|
(1.7)
|
International
|
|
241,445
|
|
247,421
|
|
(2.4)
|
Total
|
|
3,256,292
|
|
3,443,679
|
|
(5.4)
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
Retail
|
|
$
5,765,786
|
|
$
5,921,145
|
|
(2.6)
|
Foodservice
|
|
2,607,140
|
|
2,681,737
|
|
(2.8)
|
International
|
|
539,005
|
|
572,450
|
|
(5.8)
|
Total
|
|
$
8,911,930
|
|
$
9,175,331
|
|
(2.9)
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
|
|
|
|
Retail
|
|
$
459,031
|
|
$
522,980
|
|
(12.2)
|
Foodservice
|
|
428,110
|
|
399,482
|
|
7.2
|
International
|
|
45,723
|
|
78,833
|
|
(42.0)
|
Total Segment
Profit
|
|
932,863
|
|
1,001,295
|
|
(6.8)
|
Net Unallocated
Expense
|
|
164,997
|
|
80,799
|
|
104.2
|
Noncontrolling
Interest
|
|
(200)
|
|
112
|
|
(279.1)
|
Earnings Before
Income Taxes
|
|
$
767,666
|
|
$
920,608
|
|
(16.6)
|
|
|
|
|
|
|
|
HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
In thousands, except per share
amounts
Unaudited
|
|
|
|
Quarter
Ended
|
|
Nine Months
Ended
|
|
|
July 30,
2023
|
|
July 31,
2022
|
|
July 30,
2023
|
|
July 31,
2022
|
Net Sales
|
|
$ 2,963,299
|
|
$ 3,034,414
|
|
$ 8,911,930
|
|
$ 9,175,331
|
Cost of Products
Sold
|
|
2,465,251
|
|
2,528,364
|
|
7,426,514
|
|
7,577,062
|
Gross
Profit
|
|
498,048
|
|
506,049
|
|
1,485,417
|
|
1,598,269
|
Selling, General, and
Administrative
|
|
291,073
|
|
222,147
|
|
725,621
|
|
672,777
|
Equity in Earnings of
Affiliates
|
|
9,784
|
|
7,138
|
|
42,213
|
|
19,951
|
Operating
Income
|
|
216,759
|
|
291,040
|
|
802,009
|
|
945,443
|
Interest and
Investment Income
|
|
9,239
|
|
14,411
|
|
20,700
|
|
20,078
|
Interest
Expense
|
|
18,372
|
|
15,615
|
|
55,042
|
|
44,913
|
Earnings Before
Income Taxes
|
|
207,626
|
|
289,836
|
|
767,666
|
|
920,608
|
Provision for Income
Taxes
|
|
45,055
|
|
71,010
|
|
170,230
|
|
200,393
|
Effective Tax
Rate
|
|
21.7 %
|
|
24.5 %
|
|
22.2 %
|
|
21.8 %
|
Net
Earnings
|
|
162,571
|
|
218,826
|
|
597,437
|
|
720,215
|
Less: Net Earnings
(Loss) Attributable
to Noncontrolling Interest
|
|
(108)
|
|
(89)
|
|
(200)
|
|
112
|
Net Earnings
Attributable to Hormel
Foods Corporation
|
|
$
162,679
|
|
$
218,915
|
|
$
597,637
|
|
$
720,103
|
|
|
|
|
|
|
|
|
|
Net Earnings Per
Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.30
|
|
$
0.40
|
|
$
1.09
|
|
$
1.32
|
Diluted
|
|
$
0.30
|
|
$
0.40
|
|
$
1.09
|
|
$
1.31
|
|
|
|
|
|
|
|
|
|
Weighted-average
Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
546,358
|
|
546,077
|
|
546,389
|
|
544,486
|
Diluted
|
|
548,637
|
|
550,167
|
|
549,227
|
|
549,377
|
|
|
|
|
|
|
|
|
|
Dividends Declared Per
Share
|
|
$ 0.2750
|
|
$ 0.2600
|
|
$ 0.8250
|
|
$ 0.7800
|
|
HORMEL FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL
POSITION
In thousands
Unaudited
|
|
|
|
July 30,
2023
|
|
October 30,
2022
|
Assets
|
Cash and Cash
Equivalents
|
|
$
669,124
|
|
$
982,107
|
Short-term Marketable
Securities
|
|
17,423
|
|
16,149
|
Accounts
Receivable
|
|
786,246
|
|
867,593
|
Inventories
|
|
1,737,865
|
|
1,716,059
|
Taxes
Receivable
|
|
7,498
|
|
7,177
|
Prepaid Expenses and
Other Current Assets
|
|
36,613
|
|
48,041
|
Total Current
Assets
|
|
3,254,770
|
|
3,637,125
|
|
|
|
|
|
Goodwill
|
|
4,931,590
|
|
4,925,829
|
Other
Intangibles
|
|
1,790,761
|
|
1,803,027
|
Pension
Assets
|
|
235,943
|
|
245,566
|
Investments in
Affiliates
|
|
743,474
|
|
271,058
|
Other
Assets
|
|
338,741
|
|
283,169
|
Net Property, Plant,
and Equipment
|
|
2,131,479
|
|
2,141,146
|
Total
Assets
|
|
$
13,426,757
|
|
$
13,306,919
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Investment
|
Accounts
Payable
|
|
$
703,407
|
|
$
816,604
|
Accrued
Expenses
|
|
119,464
|
|
58,801
|
Accrued Marketing
Expenses
|
|
100,974
|
|
113,105
|
Employee Related
Expenses
|
|
241,879
|
|
279,072
|
Interest and Dividends
Payable
|
|
158,335
|
|
163,963
|
Taxes
Payable
|
|
49,583
|
|
32,925
|
Current Maturities of
Long-term Debt
|
|
946,981
|
|
8,796
|
Total Current
Liabilities
|
|
2,320,622
|
|
1,473,266
|
|
|
|
|
|
Long-term Debt Less
Current Maturities
|
|
2,360,380
|
|
3,290,549
|
Pension and
Post-retirement Benefits
|
|
396,297
|
|
385,832
|
Deferred Income
Taxes
|
|
467,827
|
|
475,212
|
Other Long-term
Liabilities
|
|
163,768
|
|
141,840
|
Accumulated Other
Comprehensive Loss
|
|
(241,610)
|
|
(255,561)
|
Other Shareholders'
Investment
|
|
7,959,473
|
|
7,795,780
|
Total Liabilities
and Shareholders' Investment
|
|
$
13,426,757
|
|
$
13,306,919
|
HORMEL FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS
In thousands
Unaudited
|
|
|
|
Quarter
Ended
|
|
Nine Months
Ended
|
|
|
July 30,
2023
|
|
July 31,
2022
|
|
July 30,
2023
|
|
July 31,
2022
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net
Earnings
|
|
$
162,571
|
|
$
218,826
|
|
$
597,437
|
|
$
720,215
|
Depreciation and
Amortization
|
|
74,754
|
|
65,132
|
|
216,432
|
|
191,568
|
Decrease (Increase) in
Working Capital
|
|
73,678
|
|
(169,800)
|
|
(79,372)
|
|
(270,282)
|
Other
|
|
5,998
|
|
71,887
|
|
(5,741)
|
|
121,656
|
Net Cash Provided by
(Used in)
Operating Activities
|
|
317,001
|
|
186,046
|
|
728,756
|
|
763,157
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Net (Purchase) Sale of
Securities
|
|
(2)
|
|
5,664
|
|
(49)
|
|
1,296
|
Net Purchases of
Property, Plant, and
Equipment
|
|
(77,678)
|
|
(60,360)
|
|
(163,224)
|
|
(188,140)
|
Proceeds from
(Purchases of) Affiliates
and Other Investments
|
|
212
|
|
2,009
|
|
(427,195)
|
|
8,275
|
Other
|
|
47
|
|
6,672
|
|
1,980
|
|
6,742
|
Net Cash Provided by
(Used in)
Investing Activities
|
|
(77,420)
|
|
(46,016)
|
|
(588,489)
|
|
(171,827)
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Proceeds from
Long-term Debt
|
|
1,980
|
|
—
|
|
1,980
|
|
—
|
Repayments of
Long-term Debt and
Finance Leases
|
|
(2,208)
|
|
(1,474)
|
|
(6,584)
|
|
(6,498)
|
Dividends Paid on
Common Stock
|
|
(149,944)
|
|
(141,860)
|
|
(442,560)
|
|
(415,923)
|
Share
Repurchase
|
|
—
|
|
—
|
|
(12,303)
|
|
—
|
Other
|
|
5,933
|
|
2,872
|
|
8,489
|
|
77,958
|
Net Cash Provided by
(Used in)
Financing Activities
|
|
(144,238)
|
|
(140,462)
|
|
(450,977)
|
|
(344,463)
|
Effect of Exchange
Rate Changes on
Cash
|
|
(6,715)
|
|
(10,943)
|
|
(2,273)
|
|
(10,054)
|
Increase (Decrease)
in Cash and Cash
Equivalents
|
|
88,628
|
|
(11,375)
|
|
(312,983)
|
|
236,814
|
Cash and Cash
Equivalents at Beginning
of Year
|
|
580,496
|
|
861,719
|
|
982,107
|
|
613,530
|
Cash and Cash
Equivalents at End of
Period
|
|
$
669,124
|
|
$
850,344
|
|
$
669,124
|
|
$
850,344
|
INVESTOR
CONTACT:
David
Dahlstrom
(507)
437-5248
ir@hormel.com
|
|
MEDIA
CONTACT:
Media
Relations
(507)
437-5345
media@hormel.com
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/hormel-foods-reports-third-quarter-fiscal-2023-results-301914284.html
SOURCE Hormel Foods Corporation