Company is investing in transformation to
accelerate growth as a global branded food company
AUSTIN,
Minn., Nov. 29, 2023 /PRNewswire/ -- Hormel Foods
Corporation (NYSE: HRL), a Fortune 500 global branded food company,
today reported fourth quarter and full-year fiscal 2023 results.
All comparisons are to the fourth quarter of fiscal 2022 unless
otherwise noted.
EXECUTIVE SUMMARY - FISCAL 2023
- Net sales of $12.1 billion
- Operating income of $1.1 billion;
adjusted operating income1 of $1.2 billion
- Operating margin of 8.9%; adjusted operating margin1
of 9.8%
- Earnings before income taxes of $1.0
billion; adjusted earnings before income taxes1
of $1.1 billion
- Effective tax rate of 21.8%
- Diluted net earnings per share of $1.45; adjusted diluted net earnings per
share1 of $1.61
- Cash flow from operations of $1.0
billion
EXECUTIVE SUMMARY - FOURTH QUARTER
- Net sales of $3.2 billion
- Operating income of $270 million;
adjusted operating income1 of $313 million
- Operating margin of 8.4%; adjusted operating margin1
of 9.8%
- Earnings before income taxes of $246
million; adjusted earnings before income taxes1
of $289 million
- Effective tax rate of 20.5%
- Diluted net earnings per share of $0.36; adjusted diluted net earnings per
share1 of $0.42
- Cash flow from operations of $319
million
EXECUTIVE COMMENTARY
"In fiscal 2023, we achieved our
second consecutive year of net sales in excess of $12 billion, continued to reinvest in the growth
of our leading brands, drove strong operating cash flows of
$1 billion and returned a record
amount of cash to our shareholders in the form of dividends," said
Jim Snee, chairman of the board,
president and chief executive officer. "Despite challenging
operating conditions to end the year, our results were in line with
the low end of our revenue and adjusted net earnings per
share1 expectations, as a strong finish from our
Foodservice segment was offset by pressure in our Retail and
International businesses."
"Our Foodservice segment delivered outstanding results
throughout the year, leveraging our direct-selling team,
operator-focused approach and solutions-based portfolio," Snee
said. "In our Retail segment, the team made tremendous progress
implementing its new structure, while growing or maintaining market
share for many of our leading brands across key categories,
including Hormel® Black Label®
raw bacon, Planters® snack nuts,
Jennie-O® ground turkey, the
SPAM® family of products and in our
Mexican foods portfolio. Lastly, we further expanded our global
presence with an investment in Garudafood in Indonesia. This investment supports the global
execution of our entertaining and snacking strategy while enhancing
the long-term growth profile of our International
business."
"Looking ahead, our teams continue to navigate through a dynamic
operating environment characterized by slowing consumer demand,
inflationary pressures and headwinds in our turkey business," Snee
said. "We expect fiscal 2024 to be a year of investment, consistent
with the plan we outlined at our recent investor day. We remain
focused on our strategic priorities, executing on our
transformation and modernization initiative, fueling our innovation
pipeline and exiting the year with momentum in our business
segments. I remain confident that we have the right brands,
strategy, people and culture to deliver on our commitment to
improve our business and drive long-term shareholder returns and
growth."
FISCAL 2024 OUTLOOK
For fiscal 2024, the Company
expects:
- Net sales growth of 1% to 3%, which assumes volume growth in
key categories, higher brand support and innovation, a benefit from
incremental pricing actions and current assumptions for raw
material input costs;
- Diluted net earnings per share to be $1.43 to $1.57 and
adjusted diluted net earnings per share1 to be
$1.51 to $1.65.* The Company expects earnings to decline
in the first half of the year due to the impact from lower turkey
markets, lower volumes in the Retail segment and softness in its
China business. The Company
expects segment profit growth from all three segments in the back
half of the year; and
- A modest benefit to net earnings from its transformation and
modernization initiative.
|
Fiscal 2024
Outlook
|
Fiscal
2023
|
Net Sales
|
$12.2 - $12.5
billion
|
$12.1
billion
|
Adj. Diluted Net
Earnings per Share1
|
$1.51 -
$1.65*
|
$1.61
|
Effective Tax
Rate
|
21.0 - 23.0%
|
21.8 %
|
*Adjusted diluted net
earnings per share1 excludes the estimated impact
of $0.08 per share from one-time and
nonrecurring costs associated with the Company's transformation and
modernization initiative. Please see discussion of
non-GAAP financial measures and a reconciliation of the Company's
fiscal year 2024 guidance for estimated adjusted
diluted net earnings per share1 at the end of this
release.
|
DIVIDENDS
"Consistent dividend growth remains one of
our top priorities," Snee said. "We announced a 3% increase to the
dividend for fiscal 2024 to $1.13 per
share, representing the 58th consecutive yearly increase to our
annual dividend."
Effective Nov. 15, 2023, the
Company paid its 381st consecutive quarterly dividend at
the annual rate of $1.10 per
share.
UPDATE ON STRATEGIC PRIORITIES
The Company updated its
six strategic priorities at its recent investor day to better align
with its new business segments and support earnings growth over the
next three years.
Drive focus and growth in our Retail business: By
uniting our leading brands, sales and marketing organizations, and
Brand Fuel center of excellence.
- Our brands continued to hold the No. 1 or No. 2 branded share
position in more than 40 categories,2 with approximately
84% of U.S. households purchasing Hormel Foods retail products over
the last 52 weeks.3
- We grew volume and sales in the marketplace during the fourth
quarter of fiscal 2023 for Planters®
cashews and mixed nuts, Jennie-O® lean
ground turkey, Hormel® Natural
Choice® bacon,
Chi-Chi's® salsa, and
Herdez® guacamole and taco
sauce.4
- We delivered another quarter of e-commerce sales growth.
Top-performing brands included Planters®,
SPAM®, Hormel®
Gatherings® and
Herdez®.5 In fiscal 2023,
e-commerce sales increased 5%.5
- We continued to bring exciting innovation to the marketplace
and for the holiday season, including
Planters® apple cider donut flavored
cashews, Skippy® P.B. Bites featuring
Girl Scout Cookie™ inspired flavors,
Hormel® Black Label® apple
cider bacon, La
Victoria® salsa crafted by Francia Raísa
and Herdez® habanero hot sauce.
Expand leadership in foodservice: By leveraging our
expertise, partnerships and solutions-based portfolio.
- We delivered volume and sales growth during the fourth quarter
of fiscal 2023 across our premium offerings, including bacon,
breakfast sausage and pizza toppings.6
- We announced another step in our GoFWD evolution, aligning
Burke Corporation and Heritage Premium Meats. This combines our
customized solutions and distributor-label businesses for the
powerhouse brands of Burke Corp., Dan's Prize and Sadler's
Smokehouse.
- We launched an innovative limited-time product offering,
Hormel® Cure 81®
pumpkin spice ham, a half-spiral ham infused with a specially
formulated pumpkin-spice blend.
Aggressively develop our global presence: By bringing
meaningful scale to select global markets.
- In collaboration with a leading convenience store chain in
Japan, we celebrated the sale of
the 50 millionth SPAM® musubi (grilled
SPAM® luncheon meat, rice and edible
seaweed) during fiscal 2023.6
- We continued to expand the Skippy®
brand internationally, including capturing leading category shares
in Mexico7 and
the Philippines,8 and
increasing sales in Germany.6
Execute our enterprise entertaining & snacking
vision: By unlocking the power of our brands across the
channels in which we compete.
- We gained household penetration, distribution and dollar share
for the Planters® brand in the fourth
quarter of fiscal 2023, partially attributed to our new flavored
cashews, which attracted new buyers to the cashews
category.4
- Hormel® pepperoni — the No. 1 selling
brand of pepperoni in the U.S. — gained significant distribution in
the dollar channel during the fourth quarter.4 The brand
team also partnered with TV personality Adam Richman to celebrate National Pepperoni
Pizza Day with the opening of a one-of-a-kind online pop-up shop
full of custom items designed to help fans celebrate the holiday in
style.
Future-fit our One Supply Chain: By minimizing
complexity, reducing cost and investing for growth.
- In continuation of our efforts to transform our turkey
business, we are converting the Barron (Wis.) Plant, which currently operates
turkey harvest and value-added production lines, into a value-added
facility to support growth across our broader portfolio. Harvest
operations are expected to cease during the second quarter of
fiscal 2024. These actions support a more demand-oriented and
optimized turkey portfolio that is better aligned with the changing
needs of our customers, consumers and operators, while further
decreasing exposure to commodity volatility.
Continue to transform & modernize our Company: By
investing in our people, processes, data and technology.
- As detailed at our investor day, we are targeting $200 million-plus in operating income growth by
fiscal 2026 from our transformation and modernization initiative
across the supply chain and through portfolio optimization.
- We released our 17th annual Global Impact Report in
September 2023. The report, available
on our corporate website, www.hormelfoods.com, contains information
about our progress toward our corporate responsibility,
environmental, social and governance goals in fiscal 2022.
Additionally, as part of our 20 By 30 goals, we recently had our
greenhouse gas (GHG) reduction targets validated by the Science
Based Targets initiative. Our commitments include reducing absolute
GHG emissions from our operations by at least 50% by 2030 from a
2019 base year and reducing absolute GHG emissions within our
supply chain by at least 27.5% within the same time frame.
SEGMENT HIGHLIGHTS – FOURTH QUARTER
Retail
- Volume down 3%
- Net sales down 4%
- Segment profit down 40%; adjusted segment profit1
down 26%
Volume and net sales growth from the value-added meats, emerging
brands and bacon verticals was more than offset by declines in the
convenient meals and proteins, and snacking and entertaining
verticals. In addition to continued recovery across the
Jennie-O® turkey portfolio, items such as
Applegate® natural and organic meats,
Hormel® Black Label® bacon,
Chi-Chi's® and La Victoria® salsas,
Corn Nuts® products and
Hormel® Square Table™ entrees grew volume
and net sales during the quarter. Net sales declines continued to
be partially attributed to the difficult comparison from high
levels of demand for Skippy® spreads last
year. A non-cash impairment charge of $28
million was recorded in the fourth quarter, associated with
the Justin's® trade name. Adjusted segment
profit1 declined due to lower sales, unfavorable mix and
increased brand investments.
Foodservice
- Volume up 5%
- Net sales up 2%
- Segment profit up 13%
Volume and net sales for the quarter increased, driven by a
significant recovery across the Jennie-O®
turkey portfolio and strong demand for premium bacon, pizza
toppings and premium breakfast sausage. Additionally, volume and
net sales increased for the Cafe H®,
Austin
Blues® and
Hormel® Cure 81®
brands. Segment profit increased due to the contribution from
higher volumes and improved mix.
International
- Volume up 5%
- Net sales down 12%
- Segment profit down 67%
As anticipated, net sales declined as a result of lower branded
export volumes and lower sales in China, primarily related to the retail
business. Volume growth was driven by low-margin turkey and
commodity fresh pork. Segment profit declined significantly due to
continued softness in China and
lower branded export demand, partially offset by the contribution
from our minority investment in Garudafood.
SELECTED FINANCIAL DETAILS - FISCAL 2023
Income Statement
- Operating margin and adjusted operating margin1 were
8.9% and 9.8%, respectively, compared to 10.5% for the previous
year.
- Selling, general and administrative expenses as a percent of
net sales, and adjusted selling, general and administrative
expenses as a percent of net sales1 were 7.8% and 7.1%,
respectively, compared to 7.1% last year.
- Advertising investments were $160
million, compared to $157
million last year. The Company continues to support its
leading brands in the marketplace.
- The effective tax rate was 21.8%, compared to 21.7% last
year.
Cash Flow Statement
- Cash flow from operations was $1.0
billion.
- Dividends paid to shareholders were a record $593 million.
- Capital expenditures were $270
million, compared to $279
million last year. During the year, the Company invested in
capacity expansions for pepperoni and the
SPAM® family of products. The target for
capital expenditures in fiscal 2024 is $280
million.
- Share repurchases for fiscal 2023 totaled $12 million, representing 0.3 million shares
purchased. The Company has the capacity to repurchase approximately
3.7 million shares under its current authorization.
- Depreciation and amortization expense was $253 million. The full-year expense for fiscal
2024 is expected to be approximately $250
million.
Balance Sheet
- The Company remains in a strong financial position with ample
liquidity, a conservative level of debt and consistent cash
flows.
- Cash on hand decreased to $737
million from $982 million at
the beginning of the year.
- Inventories are $1.7 billion, a
decrease of $36 million from the
beginning of the year.
- During fiscal 2023, the Company purchased from various minority
shareholders a 30% common stock interest in PT Garudafood Putra
Putri Jaya Tbk (Garudafood), a food and beverage company in
Indonesia. This investment expands
the Company's presence in Southeast
Asia and supports the global execution of the snacking and
entertaining strategic priority. The Company obtained this
Garudafood interest for a purchase price of $426 million, including associated transaction
costs. The Company funded this transaction with cash on hand.
- Total long-term debt, including current maturities, is
$3.3 billion, unchanged from last
year.
PRESENTATION
A conference call will be webcast at
8 a.m. CST on Nov. 29, 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 and providing
the access code 36936676. An audio replay is available by going to
www.hormelfoods.com. The webcast replay will be available at
noon CST, Nov.
29, 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; risks
associated with acquisitions, joint ventures, equity investments,
and divestitures; potential disruption of operations, including at
co-manufacturers, suppliers, logistics providers, customers, or
other third-party service providers; failure to realize anticipated
cost savings or operating efficiencies associated with strategic
initiatives; 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.
END NOTES
1COMPARISON
OF U.S. GAAP TO NON-GAAP FINANCIAL MEASURES
Fourth Quarter and Year-end Results
The non-GAAP
financial measures of adjusted selling, general and administrative
expenses as a percent of net sales, adjusted operating income,
adjusted operating margin, adjusted earnings before income taxes,
adjusted diluted net earnings per share, and adjusted segment
profit are presented to provide investors with additional
information to facilitate the comparison of past and present
operations. Adjusted selling, general and administrative expenses
as a percent of net sales excludes the impact of an adverse
arbitration ruling and certain costs associated with the
transformation and modernization initiative. Adjusted operating
income, adjusted operating margin, adjusted earnings before income
taxes, and adjusted diluted net earnings per share excludes the
impact of an adverse arbitration ruling, impairment charges
associated with the Justin's® trade name
and a corporate venturing investment, and costs associated with the
transformation and modernization initiative. The tax impact was
calculated using the effective tax rate for the quarter in which
the expense was incurred. The non-GAAP financial measure of
adjusted segment profit for the Retail segment excludes the impact
of a non-cash impairment charge associated with the
Justin's® trade name.
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 financial measures.
|
Fourth Quarter
Ended
|
|
October 29,
2023
|
|
October 30,
2022
|
|
|
In thousands, except
per share amounts
|
GAAP
|
Non-GAAP
Adjustments
|
Non-GAAP
|
|
Reported
GAAP
|
|
Non-GAAP
%
Change
|
Net Sales
|
$
3,198,079
|
$
—
|
$
3,198,079
|
|
$ 3,283,475
|
|
(2.6)
|
Cost of Products
Sold
|
2,683,655
|
(944)
|
2,682,711
|
|
2,717,058
|
|
(1.3)
|
Gross
Profit
|
514,425
|
944
|
515,368
|
|
566,417
|
|
(9.0)
|
Selling, General, and
Administrative
|
216,546
|
(6,726)
|
209,820
|
|
206,487
|
|
1.6
|
Equity in Earnings of
Affiliates
|
541
|
6,985
|
7,526
|
|
7,234
|
|
4.0
|
Goodwill and
Intangible Impairment
|
28,383
|
(28,383)
|
—
|
|
—
|
|
—
|
Operating
Income
|
270,037
|
43,038
|
313,074
|
|
367,164
|
|
(14.7)
|
Interest and
Investment Income (Expense)
|
(5,872)
|
—
|
(5,872)
|
|
7,933
|
|
(174.0)
|
Interest
Expense
|
18,360
|
—
|
18,360
|
|
17,602
|
|
4.3
|
Earnings Before
Income Taxes
|
245,805
|
43,038
|
288,843
|
|
357,495
|
|
(19.2)
|
Provision for Income
Taxes
|
50,322
|
8,822
|
59,145
|
|
77,484
|
|
(23.7)
|
Net
Earnings
|
195,483
|
34,216
|
229,698
|
|
280,011
|
|
(18.0)
|
Less: Net Earnings
(Loss) Attributable to
Noncontrolling Interest
|
(452)
|
—
|
(452)
|
|
128
|
|
(454.6)
|
Net Earnings
Attributable to Hormel Foods
Corporation
|
$
195,935
|
$
34,216
|
$
230,150
|
|
$
279,883
|
|
(17.8)
|
|
|
|
|
|
|
|
|
Diluted Net Earnings
Per Share
|
$
0.36
|
$
0.06
|
$
0.42
|
|
$
0.51
|
|
(17.2)
|
|
|
|
|
|
|
|
|
Operating Margin (%
of Net Sales)
|
8.4
|
|
9.8
|
|
11.2
|
|
|
|
Fiscal Year
Ended
|
|
October 29,
2023
|
|
October 30,
2022
|
|
|
In thousands, except
per share amounts
|
GAAP
|
Non-GAAP
Adjustments
|
Non-GAAP
|
|
Reported
GAAP
|
|
Non-GAAP
%
Change
|
Net Sales
|
$ 12,110,010
|
$
—
|
$ 12,110,010
|
|
$
12,458,806
|
|
(2.8)
|
Cost of Products
Sold
|
10,110,169
|
(944)
|
10,109,225
|
|
10,294,120
|
|
(1.8)
|
Gross
Profit
|
1,999,841
|
944
|
2,000,785
|
|
2,164,686
|
|
(7.6)
|
Selling, General, and
Administrative
|
942,167
|
(76,726)
|
865,441
|
|
879,265
|
|
(1.6)
|
Equity in Earnings of
Affiliates
|
42,754
|
6,985
|
49,739
|
|
27,185
|
|
83.0
|
Goodwill and
Intangible Impairment
|
28,383
|
(28,383)
|
—
|
|
—
|
|
—
|
Operating
Income
|
1,072,046
|
113,038
|
1,185,083
|
|
1,312,607
|
|
(9.7)
|
Interest and
Investment Income
|
14,828
|
—
|
14,828
|
|
28,012
|
|
(47.1)
|
Interest
Expense
|
73,402
|
—
|
73,402
|
|
62,515
|
|
17.4
|
Earnings Before
Income Taxes
|
1,013,472
|
113,038
|
1,126,509
|
|
1,278,103
|
|
(11.9)
|
Provision for Income
Taxes
|
220,552
|
24,012
|
244,565
|
|
277,877
|
|
(12.0)
|
Net
Earnings
|
792,920
|
89,026
|
881,945
|
|
1,000,226
|
|
(11.8)
|
Less: Net Earnings
(Loss) Attributable to
Noncontrolling Interest
|
(653)
|
—
|
(653)
|
|
239
|
|
(372.7)
|
Net Earnings
Attributable to Hormel Foods
Corporation
|
$
793,572
|
$
89,026
|
$
882,597
|
|
$
999,987
|
|
(11.7)
|
|
|
|
|
|
|
|
|
Diluted Net Earnings
Per Share
|
$
1.45
|
$
0.16
|
$
1.61
|
|
$
1.82
|
|
(11.4)
|
|
|
|
|
|
|
|
|
Selling, General,
and Administrative
Expenses as a Percent of Net Sales
|
7.8
|
|
7.1
|
|
7.1
|
|
|
Operating Margin (%
of Net Sales)
|
8.9
|
|
9.8
|
|
10.5
|
|
|
|
Fourth Quarter
Ended
|
|
October 29,
2023
|
|
October 30,
2022
|
|
|
In
thousands
|
GAAP
|
Non-GAAP
Adjustments
|
Non-GAAP
|
|
Reported
GAAP
|
|
Non-GAAP
%
Change
|
Segment
Profit
|
|
|
|
|
|
|
|
Retail
|
$
118,660
|
$
28,383
|
$
147,043
|
|
$
198,852
|
|
(26.1)
|
Foodservice
|
167,571
|
—
|
167,571
|
|
148,203
|
|
13.1
|
International
|
9,511
|
—
|
9,511
|
|
28,810
|
|
(67.0)
|
Total Segment
Profit
|
295,743
|
28,383
|
324,126
|
|
375,865
|
|
(13.8)
|
Net Unallocated
Expense
|
49,485
|
(14,655)
|
34,830
|
|
18,498
|
|
88.3
|
Noncontrolling
Interest
|
(452)
|
—
|
(452)
|
|
128
|
|
(454.6)
|
Earnings Before
Income Taxes
|
$
245,805
|
$
43,038
|
$
288,843
|
|
$
357,495
|
|
(19.2)
|
Forward-looking U.S. GAAP to Non-GAAP Measures
Our
fiscal 2024 outlook for adjusted diluted net earnings per share is
a non-GAAP financial measure that excludes, or has otherwise been
adjusted for, items impacting comparability, including estimated
charges associated with the transformation and modernization
initiative.
The table below shows the calculations to reconcile from the
estimated fiscal 2024 GAAP measure to the estimated non-GAAP
adjusted measure.
|
Fiscal
Year
|
|
2024 Outlook
|
2023
Results
|
Diluted Net Earnings
per Share
|
$1.43 -
$1.57
|
$1.45
|
Arbitration
Ruling
|
—
|
$0.10
|
Non-cash Impairment
Charges
|
—
|
$0.05
|
Transformation and
Modernization Initiative(A)
|
$0.08
|
$0.01
|
Adjusted Diluted Net
Earnings per Share
|
$1.51 -
$1.65
|
$1.61
|
|
(A) Since the
strategic investments in the transformation and modernization
initiative are expected to cease at the end of the
investment period, are not expected to recur
in the foreseeable future and are not considered representative of
the
Company's underlying operating performance,
the Company's management believes presenting these costs as an
adjustment in the non-GAAP results provides
additional information to investors about trends in the Company's
operations
and is useful for period-over-period
comparisons.
|
|
END NOTES
(CONTINUED)
2Circana 52
weeks ending 11/5/2023 – MULO; SPINS 52 weeks ending
11/5/2023
3Circana
Scan Panel, Total US All Outlet, 52 weeks ending
11/5/2023
4Circana
Total US MULO;13 weeks ending 11/5/2023 vs YAG
5Retailer
POS aggregated (Walmart, Kroger, Instacart, Amazon,
Amazon Fresh, Target), latest 12 and 52 weeks ending 10-29-23
vs YAG
6Internal
Data
7NielsenIQ
Retail Measurement, MX-Hormel-Untables-ST,
Entire Dataset, YTD 10/29/2023
8Kantar,
Total Channels, Total Peanut Butter, Total Philippines, 52 weeks
ended 9/10/2023
|
HORMEL FOODS CORPORATION
SEGMENT DATA
Unaudited
|
|
|
|
Fourth Quarter
Ended
|
In
thousands
|
|
October 29,
2023
|
|
October 30,
2022
|
|
%
Change
|
Volume
(lbs.)
|
|
|
|
|
|
|
Retail
|
|
788,030
|
|
810,044
|
|
(2.7)
|
Foodservice
|
|
279,288
|
|
266,447
|
|
4.8
|
International
|
|
88,128
|
|
83,999
|
|
4.9
|
Total Volume
(lbs.)
|
|
1,155,445
|
|
1,160,490
|
|
(0.4)
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
Retail
|
|
$
1,983,253
|
|
$
2,066,454
|
|
(4.0)
|
Foodservice
|
|
1,032,353
|
|
1,009,672
|
|
2.2
|
International
|
|
182,474
|
|
207,350
|
|
(12.0)
|
Total Net
Sales
|
|
$
3,198,079
|
|
$
3,283,475
|
|
(2.6)
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
|
|
|
|
Retail
|
|
$
118,660
|
|
$
198,852
|
|
(40.3)
|
Foodservice
|
|
167,571
|
|
148,203
|
|
13.1
|
International
|
|
9,511
|
|
28,810
|
|
(67.0)
|
Total Segment
Profit
|
|
295,743
|
|
375,865
|
|
(21.3)
|
Net Unallocated
Expense
|
|
49,485
|
|
18,498
|
|
167.5
|
Noncontrolling
Interest
|
|
(452)
|
|
128
|
|
(454.6)
|
Earnings Before
Income Taxes
|
|
$
245,805
|
|
$
357,495
|
|
(31.2)
|
HORMEL FOODS CORPORATION
SEGMENT DATA
Unaudited
|
|
|
|
Year
Ended
|
In
thousands
|
|
October 29,
2023
|
|
October 30,
2022
|
|
%
Change
|
Volume
(lbs.)
|
|
|
|
|
|
|
Retail
|
|
3,055,393
|
|
3,245,625
|
|
(5.9)
|
Foodservice
|
|
1,026,772
|
|
1,027,124
|
|
—
|
International
|
|
329,573
|
|
331,421
|
|
(0.6)
|
Total Volume
(lbs.)
|
|
4,411,738
|
|
4,604,169
|
|
(4.2)
|
|
|
|
|
|
|
|
Net
Sales
|
|
|
|
|
|
|
Retail
|
|
$
7,749,039
|
|
$
7,987,598
|
|
(3.0)
|
Foodservice
|
|
3,639,492
|
|
3,691,408
|
|
(1.4)
|
International
|
|
721,479
|
|
779,799
|
|
(7.5)
|
Total Net
Sales
|
|
$
12,110,010
|
|
$
12,458,806
|
|
(2.8)
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
|
|
|
|
Retail
|
|
$
577,690
|
|
$
721,832
|
|
(20.0)
|
Foodservice
|
|
595,682
|
|
547,686
|
|
8.8
|
International
|
|
55,234
|
|
107,642
|
|
(48.7)
|
Total Segment
Profit
|
|
1,228,606
|
|
1,377,161
|
|
(10.8)
|
Net Unallocated
Expense
|
|
214,482
|
|
99,297
|
|
116.0
|
Noncontrolling
Interest
|
|
(653)
|
|
239
|
|
(372.7)
|
Earnings Before
Income Taxes
|
|
$
1,013,472
|
|
$
1,278,103
|
|
(20.7)
|
HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
Unaudited
|
|
|
|
Fourth Quarter
Ended
|
|
|
Year
Ended
|
In thousands, except
per share amounts
|
|
October 29,
2023
|
|
October 30,
2022
|
|
|
October 29,
2023
|
|
October 30,
2022
|
Net Sales
|
|
$ 3,198,079
|
|
$ 3,283,475
|
|
|
$ 12,110,010
|
|
$ 12,458,806
|
Cost of Products
Sold
|
|
2,683,655
|
|
2,717,058
|
|
|
10,110,169
|
|
10,294,120
|
Gross
Profit
|
|
514,425
|
|
566,417
|
|
|
1,999,841
|
|
2,164,686
|
Selling, General, and
Administrative
|
|
216,546
|
|
206,487
|
|
|
942,167
|
|
879,265
|
Equity in Earnings of
Affiliates
|
|
541
|
|
7,234
|
|
|
42,754
|
|
27,185
|
Goodwill and
Intangible Impairment
|
|
28,383
|
|
—
|
|
|
28,383
|
|
—
|
Operating
Income
|
|
270,037
|
|
367,164
|
|
|
1,072,046
|
|
1,312,607
|
Interest and
Investment Income (Expense)
|
|
(5,872)
|
|
7,933
|
|
|
14,828
|
|
28,012
|
Interest
Expense
|
|
18,360
|
|
17,602
|
|
|
73,402
|
|
62,515
|
Earnings Before
Income Taxes
|
|
245,805
|
|
357,495
|
|
|
1,013,472
|
|
1,278,103
|
Provision for Income
Taxes
|
|
50,322
|
|
77,484
|
|
|
220,552
|
|
277,877
|
Effective Tax
Rate
|
|
20.5 %
|
|
21.7 %
|
|
|
21.8 %
|
|
21.7 %
|
Net
Earnings
|
|
195,483
|
|
280,011
|
|
|
792,920
|
|
1,000,226
|
Less: Net Earnings
(Loss) Attributable to
Noncontrolling Interest
|
|
(452)
|
|
128
|
|
|
(653)
|
|
239
|
Net Earnings
Attributable to Hormel Foods
Corporation
|
|
$
195,935
|
|
$
279,883
|
|
|
$ 793,572
|
|
$ 999,987
|
|
|
|
|
|
|
|
|
|
|
Net Earnings Per
Share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.36
|
|
$
0.51
|
|
|
$
1.45
|
|
$
1.84
|
Diluted
|
|
$
0.36
|
|
$
0.51
|
|
|
$
1.45
|
|
$
1.82
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
546,517
|
|
546,213
|
|
|
546,421
|
|
544,918
|
Diluted
|
|
548,249
|
|
550,135
|
|
|
548,982
|
|
549,566
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared per
Share
|
|
$
0.275
|
|
$
0.260
|
|
|
$
1.100
|
|
$
1.040
|
HORMEL FOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
Unaudited
|
|
In
thousands
|
|
October 29,
2023
|
|
|
October 30,
2022
|
Assets
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
736,532
|
|
|
$
982,107
|
Short-term Marketable
Securities
|
|
16,664
|
|
|
16,149
|
Accounts
Receivable
|
|
817,391
|
|
|
867,593
|
Inventories
|
|
1,680,406
|
|
|
1,716,059
|
Taxes
Receivable
|
|
7,242
|
|
|
7,177
|
Prepaid Expenses and
Other Current Assets
|
|
39,014
|
|
|
48,041
|
Total Current
Assets
|
|
3,297,249
|
|
|
3,637,125
|
|
|
|
|
|
|
Goodwill
|
|
4,928,464
|
|
|
4,925,829
|
Other
Intangibles
|
|
1,757,171
|
|
|
1,803,027
|
Pension
Assets
|
|
204,697
|
|
|
245,566
|
Investments In
Affiliates
|
|
725,121
|
|
|
271,058
|
Other
Assets
|
|
370,252
|
|
|
283,169
|
Net Property, Plant,
and Equipment
|
|
2,165,818
|
|
|
2,141,146
|
Total
Assets
|
|
$
13,448,772
|
|
|
$
13,306,919
|
|
|
|
|
|
|
Liabilities and
Shareholders' Investment
|
|
|
|
|
|
Accounts
Payable
|
|
$
771,397
|
|
|
$
816,604
|
Accrued
Expenses
|
|
51,679
|
|
|
58,801
|
Accrued Marketing
Expenses
|
|
87,452
|
|
|
113,105
|
Employee Related
Expenses
|
|
263,330
|
|
|
279,072
|
Interest and Dividends
Payable
|
|
172,178
|
|
|
163,963
|
Taxes
Payable
|
|
15,212
|
|
|
32,925
|
Current Maturities of
Long-term Debt
|
|
950,529
|
|
|
8,796
|
Total Current
Liabilities
|
|
2,311,776
|
|
|
1,473,266
|
|
|
|
|
|
|
Long-term Debt Less
Current Maturities
|
|
2,358,719
|
|
|
3,290,549
|
Pension and
Post-retirement Benefits
|
|
349,268
|
|
|
385,832
|
Deferred Income
Taxes
|
|
498,106
|
|
|
475,212
|
Other Long-term
Liabilities
|
|
191,917
|
|
|
141,840
|
Accumulated Other
Comprehensive Loss
|
|
(272,252)
|
|
|
(255,561)
|
Other Shareholders'
Investment
|
|
8,011,237
|
|
|
7,795,780
|
Total Liabilities
and Shareholders' Investment
|
|
$
13,448,772
|
|
|
$
13,306,919
|
HORMEL FOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
Unaudited
|
|
|
|
Fourth Quarter
Ended
|
|
|
Year
Ended
|
In
thousands
|
|
October 29,
2023
|
|
October 30,
2022
|
|
|
October 29,
2023
|
|
October 30,
2022
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
Net
Earnings
|
|
$ 195,483
|
|
$ 280,011
|
|
|
$ 792,920
|
|
$
1,000,226
|
Depreciation and
Amortization(A)
|
|
68,851
|
|
62,403
|
|
|
253,311
|
|
235,885
|
Decrease (Increase) in
Working Capital
|
|
(45,386)
|
|
(101,510)
|
|
|
(124,758)
|
|
(371,792)
|
Other
|
|
100,143
|
|
130,914
|
|
|
126,375
|
|
270,657
|
Net Cash Provided
by (Used in) Operating Activities
|
|
319,091
|
|
371,820
|
|
|
1,047,847
|
|
1,134,977
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
|
Net (Purchase) Sale of
Securities
|
|
7
|
|
1,196
|
|
|
(42)
|
|
2,493
|
Purchases of Property,
Plant, and Equipment
|
|
(101,681)
|
|
(89,735)
|
|
|
(270,211)
|
|
(278,918)
|
Proceeds from
(Purchases of) Affiliates and Other Investments
|
|
(514)
|
|
(5,871)
|
|
|
(427,709)
|
|
2,404
|
Other
|
|
1,132
|
|
8,199
|
|
|
8,418
|
|
15,985
|
Net Cash Provided
by (Used in) Investing Activities
|
|
(101,055)
|
|
(86,210)
|
|
|
(689,544)
|
|
(258,037)
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
Proceeds from
Long-term Debt
|
|
—
|
|
—
|
|
|
1,980
|
|
—
|
Repayments of
Long-term Debt and Finance Leases
|
|
(2,243)
|
|
(2,174)
|
|
|
(8,827)
|
|
(8,673)
|
Dividends Paid on
Common Stock
|
|
(150,372)
|
|
(141,916)
|
|
|
(592,932)
|
|
(557,839)
|
Share
Repurchase
|
|
—
|
|
—
|
|
|
(12,303)
|
|
—
|
Other
|
|
3,529
|
|
1,869
|
|
|
12,018
|
|
79,827
|
Net Cash Provided
by (Used in) Financing Activities
|
|
(149,086)
|
|
(142,221)
|
|
|
(600,064)
|
|
(486,684)
|
Effect of Exchange
Rate Changes on Cash
|
|
(1,541)
|
|
(11,625)
|
|
|
(3,814)
|
|
(21,679)
|
Increase (Decrease)
in Cash and Cash Equivalents
|
|
67,409
|
|
131,763
|
|
|
(245,575)
|
|
368,577
|
Cash and Cash
Equivalents at Beginning of Period
|
|
669,124
|
|
850,344
|
|
|
982,107
|
|
613,530
|
Cash and Cash
Equivalents at End of Year
|
|
$ 736,532
|
|
$ 982,107
|
|
|
$ 736,532
|
|
$ 982,107
|
|
(A) During the fourth quarter
of fiscal 2023, amortization related to operating leases and debt
issuance costs were reclassified from
depreciation and amortization to
separate line items to add clarity. Prior year reclassifications
were made to conform to the
current year
presentation.
|
INVESTOR
CONTACT:
David
Dahlstrom
ir@hormel.com
|
|
MEDIA
CONTACT:
Media
Relations
media@hormel.com
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/hormel-foods-reports-fourth-quarter-and-full-year-fiscal-2023-results-302000019.html
SOURCE Hormel Foods Corporation