Foodservice

Hormel Foods reports record second quarter sales

May 21, 2020

Hormel Foods Corporation reported record sales of $2.4 billion, a 3% gain, with organic net sales up 6% in the second quarter, according to a press release. Volume increased by 1.2 billion pounds, a 4% gain, while organic volume rose 7%.

The company's pretax earnings were $286 million, down 10%; down 5% to adjusted pretax earnings last year primarily due to lower investment income.

Operating margin was 12.1% compared to 13.3% last year, while diluted earnings per share of $0.42 was down 19%.

In the second quarter, the company absorbed approximately $20 million in incremental supply chain costs primarily related to lower production volumes, employee bonuses and enhanced safety measures in its production facilities. The company expects to absorb another $60-$80 million in the second half of the year, weighted primarily to the third quarter. The majority of the increased costs are expected to be temporary.