Turkey, peanut butter drive Hormel earnings growth

by Monica Watrous
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AUSTIN, Minn. – Capping a year that included the purchase of the Skippy peanut butter brand and the rollout of Rev snack wraps, Hormel Foods Corp. posted record fiscal sales and a 5 percent increase in income.

For the year ended Oct. 27, the company had net earnings of $530,076,000, equal to $1.99 per share on the common stock, up from $504,961,000, or $1.90 per share, during fiscal 2012.

Net sales increased 6 percent to $8,751,654,000 from $8,230,670,000 during the previous year.

“We achieved excellent results in the fourth quarter with earnings per share growth of 18 percent and sales up 7 percent,” said Jeffrey M. Ettinger, chairman of the board, president and CEO. “We delivered both segment profit and sales increases in four of our five segments. We are pleased with our team’s ability to drive earnings growth through our ongoing efforts to improve operational efficiencies and focus on expanding our value-added franchises, providing strong momentum heading into fiscal 2014.”

Net earnings for the fourth quarter climbed to $157,340,000, or 60 cents per share, from $132,601,000, or 50 cents per share, during the prior-year period. Net sales during the quarter increased to $2,323,202,000 from $2,170,184,000 in the same quarter of the previous year.

Skippy drove a large portion of sales during the quarter, with strong results from the Jennie-O Turkey Store and value-added products in the Refrigerated Foods segment that offset a decrease in profit from the Specialty Foods segment.

“We expect to deliver continued sales and earnings growth in fiscal 2014,” Ettinger said. “In particular, we are looking for our Refrigerated Foods, Grocery Products, Jennie-O Turkey Store and International & Other segments to drive profit growth in fiscal 2014 as our Specialty Foods segment refocuses following the expiration of a contract representing a significant portion of our sugar substitute business. We expect to benefit from lower grain and turkey commodity costs, while high beef input costs and uncertainty of hog supplies may offset some of those gains headed into the new year. Taking all of the relevant factors into account, we are setting our 2014 earnings guidance range at $2.17 to $2.27 per share.”
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