Hormel Foods Corp. reported Nov. 21 better-than-expected financial results for the fourth quarter of 2017 despite the results coming in lower than the same period last year.
Net earnings for the quarter were $218.2 million, down from $243.9 million during the fourth quarter of 2016. Diluted earnings per share were 41 cents, down from 45 cents last year. Net sales during the quarter were $2.49 billion, down from $2.63 billion in the same quarter last year. The average pre-report estimate was for earnings per share of 40 cents and revenue of $2.42 billion.
“We delivered a quarter of strong organic volume and sales growth despite the volatile commodity markets,” Hormel board chairman, president and chief executive officer Jim Snee said. “I am proud of our team’s ability to navigate the many unique market conditions we faced while staying focused on our key strategic initiatives.”
The company also announced that its Specialty Foods segment has been merged into its Grocery Products segment and will continue to be led by Luis Marconi, group vice president, Grocery Products. The primary focus of the segment is on delivering a strong branded portfolio of leading products to the evolving retail environment of food, drug, mass, club and e-commerce.
“I am confident that the consolidation of these two segments will deliver revenue and cost synergies in all aspects of the business while continuing to deliver industry-leading growth,” Snee said. “The Grocery Products segment will be a model for strategic management of iconic brands such as the SPAM family of products and Skippy peanut butter products while also nurturing the continued growth of franchises like Wholly Guacamole dips, Muscle Milk protein products and Justin’s nut butters.”
The Grocery Products segment has delivered consistent, profitable growth with a focus on category-defining legacy brands, nut butters and multicultural food innovation. The Specialty Foods portfolio consists of health and nutrition products, including Muscle Milk protein products.
Looking ahead, Snee said fiscal 2018 will represent a return to growth with the addition of three strategic acquisitions and contributions from innovative new items such as Hormel Bacon 1 fully cooked bacon and Skippy PB Bites.
“The earnings power we are creating with acquisitions, major capital investments in value-added capacity, a supply chain reorganization, the union of the Grocery Products and Specialty Products segments and an intense focus on strategic cost management sets us up for renewed earnings growth in 2018 and beyond,” he said.
The Refrigerated Foods, Grocery Products and International segments are expected to drive company growth as Jennie-O Turkey Store continues to navigate difficult industry conditions, Snee said.