Jennie-O Turkey Store’s fourth quarter of fiscal year 2019 was the most successful quarter the company completed in three years.
The Hormel Foods subsidiary saw its volume increase 5%, its net sales increase 3% and its segment profit increase 6%, all on a year-over-year basis, for the quarter, which ended on October 27.
Jim Snee, chairman, president and CEO of Hormel Foods, said during a November 26 earnings call that the fourth quarter was the first time the Jennie-O Segment grew its volume, sales and segment profit since the fourth quarter of 2016.
Not only had Jennie-O Turkey Store been struggling with an industry-wide oversupply of turkeys, but it had also been dealing with two ground turkey product recalls that occurred in November 2018 and December 2018. Both recalls were issued due to concerns about possible Salmonella contamination.
Snee said those two product recalls led to some lost distribution, but during the most recent quarter, much of that lost distribution was regained.
“We recently gained distribution back at a large customer, but still have work to do in order to get back to our pre-recall distribution levels,” said Snee.
While Jennie-O Turkey Store had decreased its advertising and promotional activity as the turkey industry struggled, Snee said they relaunched advertising and promotions in “select key markets,” which he believed help drive growth during the quarter.
Snee is pleased with the work of the Jennie-O Turkey Store team to date, and added “this team clearly has momentum going into 2020. Snee said he expects the year to represent a return to growth.
As a whole, Hormel Foods saw a decline in net earnings during the fourth quarter. The company reported net earnings of $255.5 million, down from the $261.4 million in net earnings for the fourth quarter of the 2018 fiscal year.
