Hormel reports record Q2 sales
May 20, 2015
by Lawrence Aylward
AUSTIN, Minn. – Hormel Foods Corp. reported record sales of $2.3 billion for the second quarter, including net earnings of $180.2 million, up 29 percent from the previous year. Hormel reported its Jennie-O Turkey Store segment operating profit was up 41 percent, with volume up 14 percent and dollar sales up 15 percent. But there are concerns for the Jennie-O Turkey Store business moving forward.
Hormel President, CEO and Chairman Jeffrey Ettinger said the company’s Jennie-O Turkey Store business would be “significantly challenged” because of an outbreak of the avian flu in the US, which has pressured its turkey supply chain. Nearly 37 million birds have been affected by H5N2 since the virus was first reported in December 2014. One of the states hardest hit by the virus is Minnesota, a leading turkey producer and where Hormel is based.
“We are short the birds already in terms of what has been going on the last several weeks,” Ettinger said.
Hormel said its refrigerated foods segment operating profit was up 52 percent, but dollar sales were down 8 percent. The company’s grocery products segment operating profit up was up 1 percent with dollar sales also up 1 percent.
“Grocery products should definitely benefit from lower pork input prices, particularly on the Spam family of products,” said Jody Feragen, Hormel’s executive vice president and chief financial officer.
While concerned about the second half of the year, Ettinger also expressed confidence.
“We’re very pleased with the record second-quarter earnings,” he said. “While the next few months will be challenging for our Jennie-O Turkey Store segment, we’ll look to our experienced team and balanced business model to deliver a successful year in fiscal 2015.”