Sanderson Farms this week released its fourth-quarter and fiscal 2017 results. Net sales for the 2017 fourth quarter were $919.9 million, compared with $790.8 million for the same period a year ago. Net income, on the other hand, was $72.9 million, or $3.20 per share, compared with net income of $76.0 million, or $3.36 per share, for the fourth quarter of fiscal 2016.
Total net sales for fiscal 2017 were higher, at $3.342 billion, up from $2.816 billion for fiscal 2016. Net income for the year also increased to $279.7 million, or $12.30 per share, compared with net income of $189.0 million, or $8.37 per share, for fiscal 2016.
“The fourth quarter marked the end of another record year for Sanderson Farms,” said Joe Sanderson Jr., chairman and chief executive officer of Sanderson Farms. “Market conditions weakened during our fourth fiscal quarter of 2017, as market prices declined seasonally after Labor Day. The seasonal decrease in demand was exacerbated by hurricane disruptions and higher-than-expected chicken production caused by higher-than-expected live weights. Despite this weakness, we performed well during the quarter.”
For the fiscal year, Sanderson said the company reported record annual sales, with improved overall poultry market prices compared with fiscal 2016 and a 13.2% higher volume of poultry products sold.
“Grain prices were slightly higher during fiscal 2017 compared with prices paid in fiscal 2016; however, feed costs in processed flocks were lower per pound on improved live bird performance,” he noted. “For fiscal 2017, we sold 4.22 billion lb. of dressed poultry -- another record -- compared with 3.73 billion lb. in fiscal 2016.”
Sanderson pointed out that overall market prices for poultry products were generally higher in fiscal 2017 compared with prices a year ago but were mixed for the fourth fiscal quarter of 2017.
Boneless breast meat prices averaged 6.3% lower in the fourth quarter than the prior-year period. For the full year, however, boneless breast meat prices were 5.8% higher compared with fiscal 2016. Jumbo wing prices averaged $2.09/lb. during the fourth quarter of fiscal 2017, up 28.4% from the average of $1.62/lb. during the prior-year period. Jumbo wing prices averaged $1.92/lb. during the fiscal year, up 21.4% from the average of $1.58/lb. for fiscal 2016. The average market price for bulk leg quarters increased approximately 22.7% for the fourth quarter of 2017 compared with the fourth quarter of 2016 and increased 21.2% for fiscal 2017 compared to fiscal 2016. Sanderson also said improved dark meat prices during the fiscal year reflected the increase in industry export volumes during the 2017 calendar year.
“We are pleased that our profitability during fiscal 2017 allowed us to fund from cash on hand the completion of our new facilities in St. Pauls, North Carolina, start construction at our new complex in Tyler, Texas, strengthen our balance sheet and reward our shareholders with a special dividend,” Sanderson continued. “We are well positioned to continue our growth strategy as we move St. Pauls to full production during fiscal 2018 and continue construction of our new complex in Tyler."
As of Oct. 31, 2017, the company’s balance sheet reflected $1.733 billion in assets, stockholder equity of $1.433 billion and net working capital of $650.8 million.
“We had no debt at fiscal year-end. We believe our balance sheet provides us with the financial strength not only to support our growth strategy but also to consistently manage our operations through the cycles that characterize our industry. We deeply appreciate the hard work and dedication to excellence of our employees, growers and everyone associated with our company,” Sanderson concluded.