AUSTIN, Minn. – Hormel Foods Inc. reported earnings and sales for the fourth quarter, led by a strong performance in the company’s Refrigerated Foods business.

Net earnings attributable to Hormel Foods in the fourth quarter ended Oct. 28 were $261,406,000, or $0.48 per diluted share, compared with $218,154,000, or $0.41 per diluted share reported for the fourth quarter of 2017.

Net sales for the fourth quarter climbed 1.3 percent to $2,524,697,000 compared with $2,492,608,000 reported in the year-ago quarter.

Results for fiscal 2018 included net sales of $9,545,700,000, up 1 percent from $9,167,519,000 reported in fiscal 2017. Net earnings attributable to Hormel Foods for fiscal 2018 were $1,012,140,000, or $1.86 per diluted share, compared with $846,735,000, or $1.57 per diluted share reported in 2017.

“Our team delivered a record quarter of earnings,” Chairman and CEO Jim Snee said. “Refrigerated Foods had a particularly solid quarter led by value-added growth in retail, deli, and foodservice channels which offset a continued decline in commodity profits.”

ApplegateOn a segment basis, net sales in the Refrigerated Foods business increased 5.7 percent to $1,232,650,000 in the fourth quarter driven by increased sales of branded products such as Hormel pepperoni, Natural Choice products, Applegate natural and organic products and Austin Blues barbecue products. The Columbus and Fontanini acquisitions also contributed benefits. Lower hog harvest levels resulted in declines in organic volume and sales, but segment profit increased 25 percent in spite of a 31 percent decline in commodity profits and a double-digit increase in freight expenses, the company said.

Net sales in the Grocery Products segment retreated 4 percent to $658,845,000 compared with $685,961,000 reported in the fourth quarter of 2017. Segment profit dropped 22 percent, while adjusted segment profit was down 6 percent.

“Volume and sales growth of Herdez salsa and Wholly Guacamole dips did not offset declines in our contract manufacturing business,” the company explained. “Adjusted segment profit decreased due to a decline in sales and higher freight expenses. Additionally, a non-cash impairment of $17 million was incurred in the fourth quarter associated with the CytoSport business.”

Jennie-O Turkey Store continued to struggle as net sales in the fourth quarter declined 3.7 percent to $466,811,000 compared with $484,856,000 in the year-ago period. Segment profit in the business dropped 31 percent on lower whole bird sales, higher feed costs and increased freight expenses.

“Volume and sales decreases were due to lower whole bird volume and sales as shipments were shifted into the prior quarter to minimize cold storage expenses,” Hormel said. “Jennie-O premium deli products and Jennie-O foodservice products delivered sales gains.”

Finally, net sales in the International & Other segment jumped 7.3 percent to $166,391,000 compared with $155,130,000 reported in 2017. The acquisition of the Ceratti business and lower selling, general and administrative expenses drove a 7 percent increase in segment profit for the fourth quarter.

Hormel said “Volume and sales increased as higher exports of SPAM luncheon meat and Skippy peanut butter and the addition of the Ceratti business were partially offset by lower fresh pork exports. Global trade uncertainty continued to negatively impact fresh pork export volume, sales, and profitability.”

The company’s earnings guidance for fiscal 2019 included earnings per share of $1.77-$1.91, and net sales of $9.70 billion to $10.20 billion.Jennie O

Snee said fiscal 2019 will be a continuation of the company’s long-term evolution as a global branded food company. Growth from the Wholly Guacamole, Applegate, Jennie-O, and SPAM brands will be a key component of Hormel’s success next year along with continued growth of recent innovations such as Herdez guacamole salsa, Hormel Bacon 1 fully cooked bacon, Hormel Natural Choice products, and Hormel Fire Braised meats.

“Our focus on building brands, delivering meaningful innovation to the marketplace, making strategic acquisitions, and creating intentional balance will ensure we are able to meet our growth goals,” Snee said. “We are confident in our plan to deliver growth in each business segment in 2019.

“We anticipate another year of strong cash flows,” he continued. “We plan to reinvest to expand capacity for branded value-added products while returning cash back to shareholders through a 12 percent dividend increase. This coming year will require strong execution from every business unit in order to manage through commodity market volatility and global trade uncertainty. I know our team is up to the challenge.”