Hormel Foods reported net earnings of $235.1 million for the first quarter of fiscal year 2016, a 25 percent increase from the $187.3 million reported during the first quarter of fiscal year 2015.
The operating profit for Jennie-O Turkey Store in the first quarter of 2016 was down 2 percent, while volume was down 23 percent and dollar sales were down 15 percent, compared to the first quarter of fiscal year 2015. Decreases reflect the substantial impact of the avian influenza outbreak, as flocks lost in 2015 created large volume shortfalls in operations and sales.
Jennie-O represented 16 percent of net sales and 24 percent of total segment operating profit for Hormel in first quarter 2016, down 15 percent and 2 percent from the same time in 2015, respectfully.
Offsetting the Jennie-O losses were strong performances in the grocery products, refrigerated foods and specialty foods divisions, with operating profits up 26 percent, 65 percent and 44 percent, respectively.
2016 outlook for Hormel
Based on these three segments’ strong performance and positive momentum from Jennie-O, the company raised its fiscal 2016 earnings guidance range from $1.43-$1.48 per share to $1.50-$1.56 per share.
“We expect favorable input costs to continue for refrigerated foods, grocery products and specialty foods, while we look for pork operating margins to moderate as the year progresses,” said James P. Snee, president and chief operating officer. “Our turkey production is on pace to return to normalized levels by the end of the second quarter, positioning Jennie-O Turkey Store for strong growth in the back half of fiscal 2016.”