HORMEL FOODS REPORTS THIRD QUARTER FISCAL 2024 RESULTS

Delivers better-than-expected earnings and sees growing benefits from transform and modernize initiative

AUSTIN, Minn. , Sept. 4, 2024 /PRNewswire/ -- Hormel Foods Corporation (NYSE: HRL), a Fortune 500 global branded food company, today reported results for the third quarter of fiscal 2024, ended July 28, 2024. All comparisons are to the comparable period of fiscal 2023, unless otherwise noted.

EXECUTIVE SUMMARY — THIRD QUARTER

  • Volume of 1.02 billion lbs.
  • Net sales of $2.90 billion
  • Operating income of $237 million; adjusted operating income1 of $267 million
  • Operating margin of 8.2%; adjusted operating margin1 of 9.2%
  • Earnings before income taxes of $226 million; adjusted earnings before income taxes1 of $256 million
  • Effective tax rate of 21.7%
  • Diluted net earnings per share of $0.32; adjusted diluted net earnings per share1 of $0.37
  • Cash flow from operations of $218 million

EXECUTIVE COMMENTARY AND OUTLOOK
"We delivered solid third-quarter results and another quarter of better-than-expected earnings," said Jim Snee, chairman of the board, president and chief executive officer. "Many of our key retail brands are growing, outperforming their categories and, most importantly, resonating with our customers and consumers. Our Foodservice business continued to deliver above-industry growth, highlighting the importance of our solutions-based portfolio, direct selling team, and diverse customer and operator base. We again experienced significant recovery in our International segment, led by our global brands. Lastly, we continued to realize growing benefits from our transform and modernize initiative, creating impactful improvements across our supply chain."

"Our team remains focused on finishing the year strong and executing on our strategic priorities," said Snee. "In the fourth quarter, we expect continued momentum across many of our key retail brands, growth within our Foodservice and International businesses, improved service levels for the Planters® snack nuts business, and further advancements of our transform and modernize initiative."

For fiscal year 2024, the Company is:

  • Updating its net sales range expectations to $11.8 billion to $12.1 billion, reflecting lower-than-expected commodity markets, production disruptions at its Suffolk, Virginia, facility, and declines in its contract manufacturing business.
  • Narrowing its expected diluted net earnings per share range to $1.45 to $1.51 (previously $1.45 to $1.55) and its adjusted diluted net earnings per share1 range to $1.57 to $1.63* (previously $1.55 to $1.65).
  • Including an updated estimate of $0.06 per share impact related to production disruptions at its Suffolk, Virginia, facility. Furthermore, the Company is assessing the financial impact related to storm damage at its Papillion, Nebraska, facility.
  • Assuming continued benefits to net earnings from its transform and modernize initiative.

Fiscal 2024 Outlook

Current

Previous

Net Sales

$11.8 - $12.1 billion

$12.2 - $12.5 billion

Adj. Diluted Net Earnings per Share*

$1.57 - $1.63

$1.55 - $1.65

Effective Tax Rate

22.0 - 23.0%

22.0 - 23.0%

*Adjusted diluted net earnings per share1 excludes the estimated impact of $0.08 per share from nonrecurring costs associated with the Company's transform and modernize initiative and approximately $0.04 per share resulting from legal settlements. Please see discussion of non-GAAP measures and a reconciliation of the Company's fiscal year 2024 guidance for estimated adjusted diluted net earnings per share1 at the end of this release.

PROGRESS EXECUTING STRATEGIC PRIORITIES – Q3 HIGHLIGHTS

Drive focus and growth in our Retail business

  • We grew volume and dollar sales2,3 for many products during the quarter, including Skippy® peanut butter, Jennie-O®lean ground turkey, Applegate®natural and organic meats, Wholly® and Herdez® guacamole, Lloyd's® barbecue items and Corn Nuts® corn kernels.
  • Hormel ® Black Label® bacon achieved strong results during the quarter, growing volume, dollar sales, and household penetration.2,4
  • We introduced SPAM® Korean BBQ Flavored, our latest flavor innovation in the SPAM® family of products. This is the brand's 12th permanent variety and is aimed at loyal SPAM® fans and the next generation of consumers.

Expand leadership in Foodservice  

  • We again delivered a strong quarter of volume and net sales growth, led in part by Hormel®Bacon 1™ cooked bacon, premium prepared proteins and Jennie-O® turkey items.
  • Premium prepared proteins continue to offer solutions-based options to our operators. Our newest items —Hormel® Flash 180™ sous vide-style chicken breast and Hormel® Fire Braised™ loin back ribs — both contributed growth this quarter.
  • We continued to experience strong customer acceptance for Hormel® ribbon pepperoni in the quarter, another example of the innovation that our Foodservice team brings to the marketplace.

Aggressively develop our global presence  

  • Innovation continues to be key to our international growth strategy. We launched new snacking innovation in China during the quarter, supporting our retail recovery.
  • We expanded distribution in the South Korean market through Skippy® product offerings.
  • SPAM® luncheon meat delivered a second consecutive quarter of double-digit top-line growth5 with strong shipments to Canada, Southeast Asia and Japan.

Execute our enterprise entertaining & snacking vision

  • We launched the Planters® Nut Duos Duo-licious advertising campaign and this new product offering is attracting younger consumers to the snack nuts category.4
  • We grew household penetration4 for Hormel® pepperoni, America's No. 1 pepperoni brand,2 reflecting its continued relevance to consumers.

Future-fit our One Supply Chain/Continue to transform & modernize our Company

  • We made further progress across all pillars (Plan, Buy, Make, Move, and Portfolio Optimization) of our transform and modernize initiative, notably:
    • Plan: We continued the implementation of a new end-to-end planning process and technology and are improving inventory management practices.
    • Make: We continued to generate improved operational results in our manufacturing facilities, unlocking production capacity and generating cost savings across our network.
  • We published our 2023 Global Impact Report, a comprehensive update on our 20 By 30 Challenge. The report demonstrates the Company's ongoing commitment to corporate responsibility.

SEGMENT HIGHLIGHTS – THIRD QUARTER

Retail

  • Volume down 9%
  • Net sales down 7%
  • Segment profit down 15%

Volume and net sales declined, primarily due to significant year-over-year volume and pricing declines for whole bird turkeys, lower sales of Planters®snack nuts resulting from production disruptions at the Suffolk, Virginia, facility, and lower center-store and contract manufacturing volumes. Partially offsetting these declines were net sales growth for many key brands, including Hormel® Black Label® bacon, Applegate® natural and organic meats, Jennie-O®ground turkey, Skippy® peanut butter, Wholly® guacamole, Herdez® salsas and sauces, and Hormel® Square Table™ entrees. Segment profit declined, as the benefit from lower logistics expenses and savings from the transform and modernize initiative were more than offset by the impact of lower net sales.

Foodservice

  • Volume up 2%
  • Net sales up 7%
  • Segment profit down 3%

Volume and net sales growth were driven primarily by strong performance across the turkey, premium prepared proteins, bacon and pepperoni categories. Notable products such as Hormel® Fire Braised™ meats, Hormel®Bacon 1™ cooked bacon, Café H® globally inspired proteins and Rosa Grande® premium pepperoni delivered strong volume and net sales growth. Growth from branded Jennie-O® turkey items continue to benefit top-line results. Segment profit decreased in the current quarter, as higher sales were more than offset by higher SG&A expenses.

International

  • Volume down 13%
  • Net sales down 2%
  • Segment profit up 78%

Robust volume and net sales growth for SPAM® luncheon meat, refrigerated foodservice exports, and Skippy® peanut butter exports were more than offset by the difficult comparison in the prior year to higher export volumes of low-margin commodity fresh pork and turkey. Segment profit increased significantly in the current quarter, driven by improved export margins, growth from our investments in the Philippines and Indonesia, and favorable costs in China.

SELECTED FINANCIAL DETAILS – THIRD QUARTER FISCAL 2024

  • Advertising investments were $40 million, compared to $43 million last year. The decline is partially due to lower support for the Planters® brand due to production disruptions at the Suffolk, Virginia, facility. The Company expects full-year advertising expense to increase compared to the prior year.
  • The effective tax rate was 21.7%, even with last year. The effective tax rate for fiscal 2024 is expected to be between 22.0% and 23.0%.
  • Capital expenditures were $65 million, compared to $78 million last year. The Company's target for capital expenditures in fiscal 2024 is $280 million.
  • Depreciation and amortization expense was $64 million, even with last year. The full-year expense for fiscal 2024 is expected to be approximately $250 million.
  • The third quarter marked the 96th year of uninterrupted dividends paid to stockholders. The Company returned approximately $155 million to stockholders during the quarter.

PRESENTATION
A conference call will be webcast at 8 a.m. CT on Sep. 4, 2024. Access is available at www.hormelfoods.com by clicking on "Investors." The call will also be available via telephone by dialing 800-549-8228 (toll-free) or 646-564-2877 (international) and providing the conference ID 99159. An audio replay is available at www.hormelfoods.com. The webcast replay will be available at noon CT, Sep. 4, 2024, and will remain on the website for one year.

ABOUT HORMEL FOODS - Inspired People. Inspired Food.™
Hormel Foods Corporation, based in Austin, Minnesota, is a global branded food company with over $12 billion in annual revenue across more than 80 countries worldwide. Its brands includePlanters®, Skippy®, SPAM®, Hormel® Natural Choice®, Applegate®, Justin's®, Wholly®, Hormel® Black Label®, Columbus®, Jennie-O® and more than 30 other beloved brands. The Company is a member of the S&P 500 Index and the S&P 500 Dividend Aristocrats, was named one of the best companies to work for by U.S. News & World Report, one of America's most responsible companies by Newsweek, recognized on Fast Company's list of the 100 Best Workplaces for Innovators, received a perfect score of 100 on the 2023–24 Corporate Equality Index and has received numerous other awards and accolades for its corporate responsibility and community service efforts. The Company lives by its purpose statement — Inspired People. Inspired Food. — to bring some of the world's most trusted and iconic brands to tables across the globe. For more information, visit hormelfoods.com.

FORWARD-LOOKING STATEMENTS
This news release contains "forward-looking" information within the meaning of the federal securities laws. The "forward-looking" information may include statements concerning the Company's outlook for the future as well as other statements of beliefs, future plans, strategies, or anticipated events and similar expressions concerning matters that are not historical facts. Words or phrases such as "should result," "believe," "intend," "plan," "are expected to," "targeted," "will continue," "will approximate," "is anticipated," "estimate," "project," or similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those anticipated or projected, which factors include, but are not limited to, risks related to the deterioration of economic conditions; risks associated with acquisitions, joint ventures, equity investments, and divestitures; the risk of disruption of operations, including at owned facilities, co-manufacturers, suppliers, logistics providers, customers, or other third-party service providers; risk related to the remediation of production disruptions at the Suffolk, Virginia, facility; the risk that the Company will fail to realize anticipated cost savings or operating efficiencies associated with strategic initiatives, including the transform and modernize initiative; risk of loss of a material contract; risk of the Company's inability to protect information technology systems against, or effectively respond to, cyber attacks against it or others with whom it does business, security breaches or other IT interruptions; deterioration of labor relations or labor availability or increases to labor costs; general risks of the food industry, including food contamination or outbreaks of disease among livestock and poultry flocks; fluctuations in commodity prices and availability of raw materials and other inputs; fluctuations in market demand for the Company's products; risks related to the Company's ability to respond to changing consumer preferences and the success of innovation and marketing investments; damage to the Company's reputation or brand image; risks associated with climate change, or legal, regulatory, or market measures to address climate change; risks of litigation; potential sanctions and compliance costs arising from government regulation; compliance with stringent environmental regulations and potential environmental litigation; risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges; and risks arising from the Company's foreign operations, including geopolitical risk, exchange rate risk, and risks associated with tariffs. Please refer to the cautionary statements regarding "Risk Factors" and "Forward-Looking Statements" that appear in our most recent Annual Report on Form 10-K and Quarterly reports on Form 10-Q, which can be accessed at www.hormelfoods.com in the "Investors" section, for additional information. In making these statements, the Company is not undertaking, and specifically declines to undertake, any obligation to address or update each or any factor in future filings or communications regarding the Company's business or results, and is not undertaking to address how any of these factors may have caused changes to discussions or information contained in previous filings or communications. Though the Company has attempted to list comprehensively these important cautionary risk factors, the Company wishes to caution investors and others that other factors may in the future prove to be important in affecting the Company's business or results of operations. The Company cautions readers not to place undue reliance on forward-looking statements, which represent current views as of the date made.

Note: Due to rounding, numbers presented throughout this news release may not sum precisely to the totals provided, and percentages may not precisely reflect the absolute figures.

END NOTES
1      Non-GAAP measure. See Appendix: Non-GAAP Measures to this news release for more information.
2      Circana Total US MULO;13 weeks ended 7/14/2024 vs YAG.
3      SPINS Satori, Total US Natural; 12 weeks ended 7/14/2024 vs YAG.
4      Circana, Receipt Panel, Total Omnichannel; 13 weeks ended 7/14/24.
5      Internal data.

 

HORMEL FOODS CORPORATION

SEGMENT DATA

In thousands

Unaudited




Quarter Ended



July 28, 2024


July 30, 2023


% Change

Volume (lbs.)







Retail


680,214


748,146


(9.1)

Foodservice


259,947


255,822


1.6

International


78,529


90,550


(13.3)

Total Volume (lbs.)


1,018,690


1,094,518


(6.9)








Net Sales







Retail


$       1,767,251


$       1,891,746


(6.6)

Foodservice


954,021


890,949


7.1

International


177,171


180,605


(1.9)

Total Net Sales


$       2,898,443


$       2,963,299


(2.2)








Segment Profit







Retail


$          127,932


$          151,128


(15.3)

Foodservice


142,487


146,270


(2.6)

International


21,792


12,222


78.3

Total Segment Profit


292,211


309,619


(5.6)

Net Unallocated Expense


66,526


101,886


(34.7)

Noncontrolling Interest


34


(108)


131.5

Earnings Before Income Taxes


$          225,719


$          207,626


8.7

 

HORMEL FOODS CORPORATION

SEGMENT DATA

In thousands

Unaudited




Nine Months Ended



July 28, 2024


July 30, 2023


% Change

Volume (lbs.)







Retail


2,170,621


2,267,363


(4.3)

Foodservice


777,785


747,484


4.1

International


231,681


241,445


(4.0)

Total Volume (lbs.)


3,180,087


3,256,292


(2.3)








Net Sales







Retail


$       5,467,078


$       5,765,786


(5.2)

Foodservice


2,799,110


2,607,140


7.4

International


516,517


539,005


(4.2)

Total Net Sales


$       8,782,706


$       8,911,930


(1.5)








Segment Profit







Retail


$          409,836


$          459,031


(10.7)

Foodservice


441,952


428,110


3.2

International


65,026


45,723


42.2

Total Segment Profit


916,814


932,863


(1.7)

Net Unallocated Expense


161,239


164,997


(2.3)

Noncontrolling Interest


(170)


(200)


14.9

Earnings Before Income Taxes


$          755,404


$          767,666


(1.6)

 

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

In thousands, except per share amounts

Unaudited




Quarter Ended


Nine Months Ended



July 28, 2024


July 30, 2023


July 28, 2024


July 30, 2023

Net Sales


$ 2,898,443


$ 2,963,299


$ 8,782,706


$ 8,911,930

Cost of Products Sold


2,410,075


2,465,251


7,281,798


7,426,514

Gross Profit


488,369


498,048


1,500,908


1,485,417

Selling, General, and Administrative


259,653


291,073


766,707


725,621

Equity in Earnings of Affiliates


7,977


9,784


39,250


42,213

Operating Income


236,693


216,759


773,452


802,009

Interest and Investment Income


10,484


9,239


43,416


20,700

Interest Expense


21,459


18,372


61,464


55,042

Earnings Before Income Taxes


225,719


207,626


755,404


767,666

Provision for Income Taxes


48,984


45,055


170,733


170,230

Effective Tax Rate


21.7 %


21.7 %


22.6 %


22.2 %

Net Earnings


176,735


162,571


584,671


597,437

Less: Net Earnings (Loss) Attributable
     to Noncontrolling Interest


34


(108)


(170)


(200)

Net Earnings Attributable to Hormel
Foods Corporation


$    176,701


$    162,679


$    584,842


$    597,637










Net Earnings Per Share:









Basic


$          0.32


$          0.30


$          1.07


$          1.09

Diluted


$          0.32


$          0.30


$          1.07


$          1.09










Weighted-average Shares
Outstanding:









Basic


548,685


546,358


547,858


546,389

Diluted


549,266


548,637


548,624


549,227










Dividends Declared Per Share


$      0.2825


$      0.2750


$      0.8475


$      0.8250

 

HORMEL FOODS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION

In thousands

Unaudited




July 28, 2024


October 29, 2023

Assets

Cash and Cash Equivalents


$           537,476


$           736,532

Short-term Marketable Securities


24,454


16,664

Accounts Receivable


727,054


817,391

Inventories


1,649,649


1,680,406

Prepaid Expenses and Other Current Assets


58,814


46,256

Total Current Assets


2,997,446


3,297,249






Goodwill


4,923,731


4,928,464

Other Intangibles


1,743,615


1,757,171

Pension Assets


190,947


204,697

Investments in Affiliates


680,386


725,121

Other Assets


409,125


370,252

Net Property, Plant, and Equipment


2,168,531


2,165,818

Total Assets


$      13,113,781


$      13,448,772











Liabilities and Shareholders' Investment

Accounts Payable & Accrued Expenses


$           749,956


$           823,076

Accrued Marketing Expenses


113,012


87,452

Employee-related Expenses


248,954


263,330

Interest and Dividends Payable


171,079


172,178

Taxes Payable


18,513


15,212

Current Maturities of Long-term Debt


8,232


950,529

Total Current Liabilities


1,309,746


2,311,776






Long-term Debt Less Current Maturities


2,851,621


2,358,719

Pension and Post-retirement Benefits


359,083


349,268

Deferred Income Taxes


499,098


498,106

Other Long-term Liabilities


217,008


191,917

Accumulated Other Comprehensive Loss


(314,373)


(272,252)

Other Shareholders' Investment


8,191,598


8,011,237

Total Liabilities and Shareholders' Investment


$      13,113,781


$      13,448,772

 

HORMEL FOODS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

In thousands

Unaudited




Quarter Ended


Nine Months Ended



July 28, 2024


July 30, 2023


July 28, 2024


July 30, 2023

Operating Activities









Net Earnings


$        176,735


$        162,571


$        584,671


$        597,437

Depreciation and Amortization


63,658


64,083


191,354


187,326

Decrease (Increase) in Working Capital


(34,834)


73,678


43,777


(79,372)

Other


12,431


16,669


38,315


23,365

Net Cash Provided by (Used in)
     Operating Activities


217,990


317,001


858,117


728,756










Investing Activities









Net Sale (Purchase) of Securities


(607)


(2)


(6,106)


(49)

Purchases of Property, Plant, and
     Equipment


(65,481)


(77,948)


(172,656)


(168,529)

Proceeds from (Purchases of) Affiliates
     and Other Investments


(6,231)


212


(6,681)


(427,195)

Other


8,136


318


8,544


7,285

Net Cash Provided by (Used in)
     Investing Activities


(64,183)


(77,420)


(176,899)


(588,489)










Financing Activities









Proceeds from Long-term Debt



1,980


497,765


1,980

Repayments of Long-term Debt and
     Finance Leases


(952,277)


(2,208)


(956,797)


(6,584)

Dividends Paid on Common Stock


(154,943)


(149,944)


(459,978)


(442,560)

Share Repurchase





(12,303)

Other


6,325


5,933


39,187


8,489

Net Cash Provided by (Used in)
     Financing Activities


(1,100,895)


(144,238)


(879,823)


(450,977)

Effect of Exchange Rate Changes on
     Cash


(1,806)


(6,715)


(453)


(2,273)

Increase (Decrease) in Cash and Cash
     Equivalents


(948,893)


88,628


(199,057)


(312,983)

Cash and Cash Equivalents at Beginning
     of Year


1,486,368


580,496


736,532


982,107

Cash and Cash Equivalents at End of
     Period


$        537,476


$        669,124


$        537,476


$        669,124

 

APPENDIX: NON-GAAP MEASURES
This news release includes measures of financial performance that are not defined by U.S. generally accepted accounting principles (GAAP). The Company utilizes these non-GAAP measures to understand and evaluate operating performance on a consistent basis. These measures may also be used when making decisions regarding resource allocation and in determining incentive compensation. The Company believes these non-GAAP measures provide useful information to investors because they aid analysis and understanding of the Company's results and business trends relative to past performance and the Company's competitors. Non-GAAP measures are not intended to be a substitute for GAAP measures in analyzing financial performance. These non-GAAP measures are not calculated in accordance with GAAP and may be different from non-GAAP measures used by other companies.

Transform and Modernize Initiative
In the fourth quarter of fiscal 2023, the Company announced a multi-year transform and modernize initiative. In presenting non-GAAP measures, the Company adjusts for (i.e., excludes) expenses for this initiative that are non-recurring, comprised primarily of project-based external consulting fees and asset write-offs related to portfolio optimization (i.e., reducing the complexity and optimizing the assortment of the product portfolio). The Company believes that non-recurring costs associated with the transform and modernize initiative are not reflective of the Company's ongoing operating cost structure; therefore, the Company is excluding these discrete costs. The Company does not adjust for (i.e., does not exclude) certain costs related to the transform and modernize initiative that are expected to continue after the project ends, such as software license fees and internal employee expenses, because those costs are considered ongoing in nature as a component of normal operating costs.

Legal Matters
From time to time, the Company incurs expenses related to discrete legal matters that the Company believes are not indicative of the Company's core operating performance, do not reflect expected future operating costs, and may not be meaningful when comparing the Company's operating performance against that of prior periods. The Company adjusts for (i.e., excludes) these expenses.

Litigation Settlements
In the second and third quarters of fiscal 2024, the Company entered into settlement agreements with certain plaintiffs in its pending antitrust litigation.

Arbitration Ruling
In the third quarter of fiscal 2023, the Company received an unexpected, unfavorable arbitration ruling involving an isolated commercial dispute with a third party.

The table below shows the calculations to reconcile from the GAAP measures to the non-GAAP measures presented in this press release. The tax impacts were calculated using the effective tax rate for the quarter in which the expenses were incurred.

HORMEL FOODS CORPORATION
RECONCILIATION OF NON-GAAP MEASURES
Unaudited



Quarter Ended


Nine Months Ended

In thousands, except per share amounts

July 28,
2024


July 30,
2023


July 28,
2024


July 30,
2023

Cost of Products Sold (GAAP)

$ 2,410,075


$ 2,465,251


$ 7,281,798


$ 7,426,514

Transform and Modernize Initiative(1)

(1,226)



(4,646)


Adjusted Cost of Products Sold (Non-GAAP)

$ 2,408,848


$ 2,465,251


$ 7,277,152


$ 7,426,514









Gross Profit (GAAP)

$    488,369


$    498,048


$ 1,500,908


$ 1,485,417

Transform and Modernize Initiative(1)

1,226



4,646


Adjusted Gross Profit (Non-GAAP)

$    489,595


$    498,048


$ 1,505,554


$ 1,485,417









SG&A (GAAP)

$    259,653


$    291,073


$    766,707


$    725,621

Transform and Modernize Initiative(2)

(12,280)



(31,016)


Pork Antitrust Litigation Settlements



(11,750)


Red Meat Wages Antitrust Litigation Settlement

(13,500)



(13,500)


Poultry Wages Antitrust Litigation Settlement

(3,500)



(3,500)


Arbitration Ruling


(70,000)



(70,000)

Adjusted SG&A (Non-GAAP)

$    230,373


$    221,073


$    706,941


$    655,621









Operating Income (GAAP)

$    236,693


$    216,759


$    773,452


$    802,009

Transform and Modernize Initiative(1)(2)

13,506



35,663


Pork Antitrust Litigation Settlements



11,750


Red Meat Wages Antitrust Litigation Settlement

13,500



13,500


Poultry Wages Antitrust Litigation Settlement

3,500



3,500


Arbitration Ruling


70,000



70,000

Adjusted Operating Income (Non-GAAP)

$    267,200


$    286,759


$    837,864


$    872,009









Earnings Before Income Taxes (GAAP)

$    225,719


$    207,626


$    755,404


$    767,666

Transform and Modernize Initiative(1)(2)

13,506



35,663


Pork Antitrust Litigation Settlements



11,750


Red Meat Wages Antitrust Litigation Settlement

13,500



13,500


Poultry Wages Antitrust Litigation Settlement

3,500



3,500


Arbitration Ruling


70,000



70,000

Adjusted Earnings Before Income Taxes (Non-
GAAP)

$    256,225


$    277,626


$    819,816


$    837,666









Provision for Income Taxes (GAAP)

$      48,984


$      45,055


$    170,733


$    170,230

Transform and Modernize Initiative(1)(2)

2,931



8,009


Pork Antitrust Litigation Settlements



2,644


Red Meat Wages Antitrust Litigation Settlement

2,930



2,930


Poultry Wages Antitrust Litigation Settlement

760



760


Arbitration Ruling


15,190



15,190

Adjusted Provision for Income Taxes (Non-GAAP)

$      55,603


$      60,245


$    185,074


$    185,420









Net Earnings Attributable to Hormel Foods
Corporation
(GAAP)

$    176,701


$    162,679


$    584,842


$    597,637

Transform and Modernize Initiative(1)(2)

10,575



27,654


Pork Antitrust Litigation Settlements



9,106


Red Meat Wages Antitrust Litigation Settlement

10,571



10,571


Poultry Wages Antitrust Litigation Settlement

2,741



2,741


Arbitration Ruling


54,810



54,810

Adjusted Net Earnings Attributable to Hormel
Foods Corporation
(Non-GAAP)

$    200,588


$    217,489


$    634,913


$    652,447









Diluted Net Earnings Per Share (GAAP)

$          0.32


$          0.30


$          1.07


$          1.09

Transform and Modernize Initiative(1)(2)

0.02



0.05


Pork Antitrust Litigation Settlements



0.02


Red Meat Wages Antitrust Litigation Settlement

0.02



0.02


Poultry Wages Antitrust Litigation Settlement




Arbitration Ruling


0.10



0.10

Adjusted Diluted Net Earnings Per Share (Non-
GAAP)

$          0.37


$          0.40


$          1.16


$          1.19


SG&A as a Percent of Net Sales (GAAP)

9.0 %


9.8 %


8.7 %


8.1 %

Transform and Modernize Initiative(2)

(0.4)



(0.4)


Pork Antitrust Litigation Settlements



(0.1)


Red Meat Wages Antitrust Litigation Settlement

(0.5)



(0.2)


Poultry Wages Antitrust Litigation Settlement

(0.1)




Arbitration Ruling


(2.4)



(0.8)

Adjusted SG&A as a Percent of Net Sales (Non-
GAAP)

7.9 %


7.5 %


8.0 %


7.4 %









Operating Margin (GAAP)

8.2 %


7.3 %


8.8 %


9.0 %

Transform and Modernize Initiative(1)(2)

0.5



0.4


Pork Antitrust Litigation Settlements



0.1


Red Meat Wages Antitrust Litigation Settlement

0.5



0.2


Poultry Wages Antitrust Litigation Settlement

0.1




Arbitration Ruling


2.4



0.8

Adjusted Operating Margin (Non-GAAP)

9.2 %


9.7 %


9.5 %


9.8 %



(1)

Comprised primarily of asset write-offs related to portfolio optimization.

(2)

Comprised primarily of project-based external consulting fees.

 

Forward-looking GAAP to Non-GAAP Measures
Our fiscal 2024 outlook for adjusted diluted net earnings per share is a non-GAAP measure that excludes, or has otherwise been adjusted for, items impacting comparability, including estimated charges associated with the transform and modernize initiative and litigation settlements.

The table below shows the calculation to reconcile from the estimated fiscal 2024 GAAP measure to the estimated non-GAAP adjusted measure.


Fiscal 2024
Outlook

Diluted Net Earnings per Share (GAAP)

$1.45 - $1.51

Transform and Modernize Initiative

$0.08

Litigation Settlements

$0.04

Adjusted Diluted Net Earnings per Share (Non-GAAP)

$1.57 - $1.63

 

INVESTOR CONTACT:


MEDIA CONTACT:


Jess Blomberg


Media Relations


ir@hormel.com


media@hormel.com


 

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SOURCE Hormel Foods Corporation