Vending

Hormel Foods reports record sales for Q3 2021

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September 2, 2021

Hormel Foods Corp. delivered all-time record sales during the third quarter ending July 25, 2021, as net sales rose 20% from $2.38 billion in Q3, 2020 to $2.86 billion and organic sales rose 14%, according to an earnings release.

Net sales for the quarter rose 25% compared to 2019 pre-pandemic levels.

Net earnings fell from $203.3 million to $177 million on a reported basis for the comparative third quarters, but improved 4.3% to $212 million on an adjusted basis.

Operating income fell 17% from $249.6 million to $207 million in the comparative quarters, while adjusted operating income fell 1% to $248 million.

Diluted earnings per share fell 14% from 37 cents to 32 cents in the comparative quarters, while adjusted diluted earnings per share rose 5% to 39 cents.

The $2.86 billion in quarterly revenue beat analyst expectations by $130 million while the non-GAAP EPS of 39 cents was in line with expectations and the GAAP EPS of 32 cents missed expectations by 7 cents, according to Seeking Alpha.

Shares traded at $43.77 today against a 52-week range of $43-$51.69.

"Our team delivered the highest quarterly net sales result in the company's history, with growth from every segment and all four channels," Jim Snee, chairman of the board, president and CEO, said in the press release. "Our investments in retail, deli and e-commerce helped carry us through the initial phases of the pandemic last year as consumers shifted to more at-home eating occasions."

"We expect to deliver record sales again in the fourth quarter, along with improving margins as additional pricing actions go into effect," he said.

Demand for the company's retail items remained elevated, as exhibited by growth compared to the prior year and double-digit growth over fiscal 2019.

Foodservice sales continued to exceed pre-pandemic levels and accelerated compared to the second quarter of fiscal 2021. Deli channel sales increased due to growth from branded grab-and-go and prepared foods items. International sales increased due to strong growth from branded and fresh pork exports, and growth from China and Brazil.

Net sales in refrigerated foods increased 19% due to strong results from the foodservice, retail and deli businesses, and elevated pricing across most categories. Organic net sales rose by 18%.

The recovery in foodservice continued to accelerate, with net sales exceeding both last-year and pre-pandemic levels in almost every category. Retail and deli sales increased due primarily to growth from Hormel Black Label bacon, Columbus grab-and-go items, Hormel refrigerated entrees and Hormel Gatherings party trays.

Grocery product net sales increased 20% due to the inclusion of the Planters snack nuts business. On an organic basis, sales growth from brands such as Spam, Hormel Compleats and Wholly overcame the impact of lower contract manufacturing sales.