Hormel Foods Announces Third Quarter Results And Continued Progress Towards Key Strategic | Hormel Foods Corporation

“We generated record pre-tax earnings this quarter even as we faced record-high input costs for two of our primary raw materials, pork bellies and beef trim,” Snee said. “Nevertheless the results did not meet our expectations. Our team is working to mitigate the effects of volatile commodity markets through increased pricing, strategic promotional activity, and our on-going innovation efforts.”

“Strong earnings growth in Grocery Products and Refrigerated Foods was able to offset lower earnings in our other three segments,” Snee said. “Specialty Foods results are disappointing, primarily caused by a soft quarter for MUSCLE MILK® ready-to-drink protein products. As we anticipated, Jennie-O Turkey Store continues to navigate through unfavorable market conditions in the turkey industry.”

Jennie-O Turkey Store (17% of Net Sales, 16% of Total Segment Operating Profit)
Jennie-O Turkey Store sales declined 9 percent and segment profit declined 20 percent. These decreases are primarily due to lower turkey commodity prices, pricing pressure from competing proteins, and increased operating expenses. A reduction in harvest volume was the primary factor to the decline in sales and volume.

Specialty Foods (9% of Net Sales, 8% of Total Segment Operating Profit)
Specialty Foods sales declined 7 percent primarily related to one extra period of Diamond Crystal Brands in fiscal 2016 and lower sales of MUSCLE MILK® protein products. Segment profit declined 14 percent as pricing of contract packaging sales did not keep pace with input cost increases. Lower sales for MUSCLE MILK® ready-to-drink protein products also contributed to the decline in segment profit.

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Hormel Foods Announces Third Quarter Results And Continued Progress Towards Key Strategic.