Hormel sees good growth in Q3

The company reported fiscal 2013 third quarter net earnings of $113.6m, up 2% year-on-year, while sales for the quarter were up 8% on the same period in fiscal 2012.

Hormel’s Grocery Product segment, which includes some meat products such as its Dinty Moore beef stew and Hormel bacon toppings, achieved a 25% year-on-year sales increase in the third quarter, although this was primarily driven by sales of its Skippy peanut butter products. Net profit in the grocery segment increased 32%.

Its Jennie-O Turkey Store segment also performed well, with a 4% net sales increase driven by sales of ground turkey chubs and turkey bacon. Hormel said that increased value-added sales helped offset higher feed prices, and drive a 17% increase in operating profit for the quarter.

The company’s international segment saw sales increase by 31% year-on-year and operating profit soar 34%. Hormel said this was driven principally by stronger exports of its Spam and fresh pork products, particularly to China.

Refrigerated Foods, which includes Hormel’s deli meats, hams, braised meats and bacon, also achieved a sales increase of 2%, although it saw operating profit plummet by 26% due to higher raw material costs.

“Higher pork input costs squeezed margins for our retail value-added products, particularly bacon, decreasing our Refrigerated Foods segment results during the quarter,”​ said Jeffrey Ettinger, Hormel president and CEO.

Looking to the fourth quarter, Ettinger said the company expected its Refrigerated Foods sector to recover, and its Jennie-O Turkey Store to deliver strong results. “We expect four out of five segments to outperform in the fourth quarter, with only Specialty Foods expected to experience a down quarter,”​ he said.

He added that Hormel had “solid marketing and promotional plans in place to drive sales of our value-added products in the fourth quarter”.​