Hormel reports $7.2B sales in 2010
Published 8:58 am Wednesday, November 24, 2010
By Trisha Marczak, staff writer
Hormel Foods Corp. boasted a fourth quarter earnings increase of 17 percent Tuesday morning, with sales up 11 percent for the entire fiscal year.
For the fourth quarter, the company reported net earnings of $121.1 million — up from $103.9 million a year ago. For the fiscal year, ending Oct. 31, the company saw total sales of $7.2 billion.
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Sales in Hormel’s refrigerated and Jennie-O Turkey Store divisions carried the company this quarter, with an increased operating profit of 90 percent in the Jennie-O division. The refrigerated division saw an operating profit increase of 22 percent.
Hormel Chief Executive Officer Jeff Ettinger said the increase in the Jennie-O division was largely due to an enhanced advertising campaign launched earlier this year, along with efficiency throughout the supply chain, higher commodity prices and lower feed costs.
“We believe the (advertising) campaign contributed to the double digit sales growth,” Ettinger said.
Overall operating profits in the Jennie-O division rose 65 percent for the entire fiscal year, while refrigerated foods climbed 22 percent.
While the specialty foods division saw a decline this quarter, the division experienced an overall operating profit increase of 18 percent. The grocery products division was down for both the year and the quarter, along with the international division.
“The higher sales of Spam family products were unable to offset higher raw material costs,” Ettinger said of the international division, which saw an overall decline of 5 percent this fiscal year in operating profits.
Ettinger said momentum from the Jennie-O and refrigerated divisions are expected to taper off for 2011.
“The refrigerated and Jennie-O divisions may see much more modest sales process growth after such substantive gains in 2010,” he said.
Overall, he predicts a strong fiscal year in 2011. That’s despite expected increases to raw material and grain costs. To offset those increased costs, Ettinger highlighted the company’s focus on Mexican food product lines.
“Our initiative with Mexican food will help drive strong results in grocery products in 2011,” he said.
The company is also looking to boost its presence in its higher-end home entertainment products, such as its Hormel party trays.