Jennie-O Turkey Store fiscal woes continue in Q1 2018

Jennie-O Turkey Store continued to face economic struggles during the first quarter of fiscal year 2018, with profits down 27 percent when compared to the first quarter of fiscal year 2017.

Roy Graber Headshot
(Hormel Foods)
(Hormel Foods)

Jennie-O Turkey Store continued to face economic struggles during the first quarter of fiscal year 2018, with profits down 27 percent when compared to the first quarter of fiscal year 2017.

The Hormel Foods subsidiary and second largest turkey company in the United States, also reported a 4 percent decrease in volume and 7 percent decline in net sales.

According to a press release from Hormel Foods, the volume and sales declines were due primarily to lower harvest volumes and lower turkey commodity prices as a result of a continued oversupply of turkeys in the industry, as well as excess turkey meat in cold storage.

Jennie-O Turkey Store's financial results were revealed along with Hormel Foods’ overall financial results on February 22. The first quarter of the fiscal year ended on January 28.

Value-added products help offset losses

While Jennie-O Turkey Store’s sales of whole birds declined, the company did see an increase in retail sales of Jennie-O lean ground turkey and Jennie-O Oven Ready products.

The company also was hurt financially by increasing freight and transportation costs.

Feed costs did not play much of a factor for Jennie-O Turkey Stores quarterly financial results, the company stated, as they were flat when compared to the first quarter of fiscal year 2017 and were in line with the company’s expectations.

Expectations for upcoming fiscal quarters

Jim Snee, president and CEO of Hormel Foods, stated that he expects some of the challenges facing Jennie-O Turkey Store to continue.

“We project a slower-than-expected recovery at Jennie-O Turkey Store as we continue to work through a difficult operating environment in the turkey industry. Freight costs will continue to be a headwind for the balance of the year and we are working to mitigate the impact through long-term sustainable solutions across our entire supply chain," said Snee.

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