AUSTIN, Minn., Feb. 17 /PRNewswire/ --
Hormel Foods Corporation (NYSE: HRL) today announced operating earnings of
$43,848,000, or $.30 per share, for the first quarter ended January 29. This
is an improvement of $5,276,000, or 13.7 percent, over first quarter operating
earnings one year ago of $38,572,000, or $.26 per share.
Total reported earnings for the first quarter of fiscal 1999 of
$42,380,000, or $.29 per share, were slightly higher than announced operating
earnings due to a one-time gain of $3,808,000, or $.03 per share, for the sale
of land by Campofrio Alimentacion, S.A., Madrid, Spain, a leading global foods
company in which Hormel Foods has a 21.4 percent ownership interest.
All per share amounts have been adjusted to reflect the two-for-one split
of Hormel Foods common stock approved by shareholders on January 25.
Dollar sales for the first quarter were $903,913,000, an increase of
$104,908,000, or 13.1 percent, from the $799,005,000 reported for the first
quarter of fiscal 1999. This corresponds to a 5.4 percent tonnage increase
which followed an 8.7 percent gain in last year's first quarter and 7.1
percent for the full fiscal 1999 year.
Joel W. Johnson, chairman of the board, president and chief executive
officer, was pleased with the overall performance of the company's core
business groups and the key strategies in place that continue to provide solid
top and bottom line growth. "The volume growth continues at Hormel Foods. We
are pleased to see customers and consumers responding favorably to our many
product initiatives. Our quarterly earnings gains have been particularly
strong in recent years and the just concluded first quarter was no exception,"
said Johnson. "Our basic strategies of adding value to fresh pork, growing the
ethnic foods business, expanding foodservice and core consumer franchises, and
building upon our already successful Jennie-O Foods and international
operations are producing the very positive financial results we have
Within the Prepared Foods Group, many of the company's best-known brands,
SPAM luncheon meat, Dinty Moore stew, Hormel chili, Mary Kitchen hash and
Hormel chunk chicken and chunk ham enjoyed double-digit tonnage gains. The El
Torito line of Mexican sauces and foods continued to perform well in its
markets and will be helped by the introduction of frozen fajitas and a sweet
corn cake mix for club store sales. The company's line of microwave entrees
was expanded to include two new Dinty Moore American Classics items -- au
gratin potatoes & ham and macaroni & cheese with Cure 81 ham -- as well as a
new Kid's Kitchen cheezy mac & franks.
As evidence of the company's continuing emphasis to form strategic
partnerships with its key customers, the Grocery Products Division was
notified it had been selected to receive Wal-Mart Stores' prestigious "Vendor
of the Quarter" award for excellence in product, value and service. The
company's Meat Products Division was similarly honored last year.
Late in the first quarter, Hormel Foods announced the formation of a joint
venture with Eridania Beghin-Say (EBS) of Paris, France, to market the
Carapelli brand of olive oil in the United States and Puerto Rico. Initial
trade acceptance of the premium extra virgin, extra virgin, mild and light
olive oil varieties has exceeded expectations.
Volume growth of key branded processed meats and fresh pork products were
contributing factors behind the Refrigerated Foods Group's first quarter
results. A new sales record for retail ham products, led by Cure 81 ham, was
established during the Christmas holiday season. Bacon sales were also at an
all-time high and Hormel pepperoni, fueled by the introduction of a new
Tabasco flavor as well as deli-style and bite-size varieties, also showed
strong volume and category share growth. Sales of Hormel turkey breast and
beef deli products rose due to increased market distribution while effective
trade promotions led to volume gains for Di Lusso Genoa salami and Hormel hard
salami. All categories of Always Tender fresh pork continued their exceptional
growth record. Development of this growing brand was enhanced with the
introduction of four varieties of fully cooked entrees -- beef roast, pork
roast, beef tips with gravy and meat loaf with tomato sauce.
Also within the Refrigerated Foods Group, Foodservice operations recorded
double-digit increases in branded tonnage. Hormel franks, Fast'N Easy burgers,
pork sausage and precooked bacon as well as Special Recipe pork sausage, Grill
Perfect bacon, Layout Pack wide-shingled bacon, Old Smokehouse Applewood
smoked bacon and Bread Ready presliced meats showed excellent gains. The first
quarter introduction of Always Tender fresh pork to foodservice customers has
resulted in significant sales volume growth.
Jennie-O Foods also enjoyed strong foodservice tonnage increases supported
by expanded distribution with national distributors, major national restaurant
chains and contract foodservice accounts. Retail sales increased substantially
with tonnage increases and volume share gains coming from Jennie-O turkey
burgers, Jennie-O turkey franks, Jennie-O Extra Lean turkey bacon and Jennie-O
white and dark turkey pan roasts.
For Hormel Foods International (HFI), fresh and frozen pork and Jennie-O
turkey contributed to strong tonnage and dollar sales growth. In Guam, initial
sales of Tabasco flavored SPAM luncheon meat have been impressive. New
Chinese-style hams, in select and smoked varieties, are off to a good start in
the Beijing and Shanghai markets. During the quarter, Hormel Alimentos S.A. de
C.V., a key joint venture in Mexico, purchased the Solo brand of bouillon.
Plans are to greatly broaden distribution of this well-known brand. Another
joint venture, Purefoods-Hormel Company, based in Manila, Philippines,
announced plans to construct a new plant to manufacture for retail sale the
Tender Juicy and Beefy brands of hot dogs and for foodservice accounts a
variety of sliced luncheon meats.
Effective February 15, the company paid its 286th consecutive quarterly
dividend which also represented the 34th consecutive annual increase in the
quarterly dividend rate. Reflecting the two-for-one stock split, the newly
established annual rate is $.35 per share.
SOURCE Hormel Foods