Austin, Minnesota-based Hormel Foods Corporation, the multinational marketer of consumer-branded meat and food products, today reported net earnings for the fiscal 2002 Q1, ended 26 January 2002, of US$50.4m. This was an increase of 18% from net earnings of US$42.8m (adjusted for SFAS 142) in the comparable 2001 period. The impact of SFAS 142, which eliminates goodwill amortization, would have increased fiscal 2001 Q1 earnings by US$1.2m, or US$.01 per share. Earnings per share were US$.36, up 16% from US$.31 in the fiscal 2001 Q1 (US$.30 before the impact of SFAS 142).
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The company reported record Q1 dollar sales of US$983m, an increase of 10% from US$891.2m (includes adjustments related to EITF 00-14 and 00-25, which reclassifies promotional costs as a reduction of revenue instead of an expense in both years) recorded in last year’s fiscal Q1. Volume was up 6% versus the comparable fiscal 2001 period.
Joel W. Johnson, chairman of the board, president and CEO, attributed the results to continued performance of the company’s core business: “We continued to enjoy solid growth in sales and market share of many Hormel Foods branded products, particularly in grocery, deli, flavored meats and ethnic foods.
Johnson continued: “Our shift to predominantly branded, value-added products contributed to better operating profits in the Refrigerated Foods business segment, despite the negative impact our long-term procurement agreements generated because the contract prices paid exceeded the current market. He also noted that the foodservice business saw signs of improvement during the first quarter following the post-September 11 decline.
“I am optimistic about meeting our financial objectives for the rest of this year, but we continue to watch the expansion of production in the turkey industry and the impact this may have on our Jennie-O Turkey Store results,” Johnson said.
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