Hormel Foods: Reports Fourth Quarter 2021 Results

Austin / MN. (hrl) Hormel Foods Corporation, a leading global branded food company, reported results for the fourth quarter of fiscal 2021. The fourth quarter and full year of 2021 contain an extra week as compared to the prior year. All comparisons are to the fourth quarter of fiscal 2020 unless otherwise noted.

Executive Summary Fourth Quarter

  • Volume of 1.4 billion lbs., up 14 percent; organic volume1 up 8 percent
  • Record net sales of USD 3.5 billion, up 43 percent; organic net sales1 up 32 percent
  • Operating income of USD 358 million, up 29 percent
  • Operating margin of 10.4 percent compared to 11.4 percent last year
  • Effective tax rate of 20.0 percent compared to 15.9 percent last year
  • Record diluted earnings per share of USD 0.51, up 19 percent from USD 0.43
  • Record cash flow from operations of USD 564 million, up 126 percent

Executive Summary Fiscal 2021

  • Volume of 4.9 billion lbs., up 3 percent; organic volume1 up 1 percent
  • Record net sales of USD 11.4 billion, up 19 percent; organic net sales1 up 14 percent
  • Operating income of USD 1.1 billion, up 2 percent
  • Operating margin of 9.9 percent compared to 11.5 percent last year
  • Effective tax rate of 19.3 percent compared to 18.5 percent last year
  • Diluted earnings per share of USD 1.66, in line with last year
  • Adjusted diluted earnings per share1 of USD 1.73, up 4 percent
  • Cash flow from operations of USD 1.0 billion, down 11 percent

Executive Commentary

«We delivered record sales and earnings this quarter with growth from every segment and channel,» said Jim Snee, chairman of the board, president and chief executive officer. «I’m extremely proud of how the entire team overcame numerous challenges to post these extraordinary results,» Snee said. «This quarter further demonstrates the value of our long-term strategy, the pricing power of our brands and our effective execution in the marketplace.»

«For the second consecutive quarter, we delivered the highest quarterly net sales in our company’s history,» Snee said. «Impressive contributions were made by the most brands across all our businesses. We posted incredible sales growth of 72 percent  in the foodservice channel, or 33 percent compared to pre-pandemic levels, which is a result of our differentiated portfolio, dedicated direct sales team and our commitment to the industry throughout the pandemic. Additionally, we continue to drive strong double-digit sales growth in the retail, deli and international channels, led by the strength of our global brands.»

«As expected, all four segments delivered margin improvement compared to the third quarter,» Snee said. «I credit our experienced management team for successfully executing numerous pricing actions across our portfolio, improving promotional effectiveness and managing to a more profitable mix. Our One Supply Chain team also made significant progress in increasing production throughput and, once again, our production professionals have done heroic work to produce high quality products for our customers. Finally, this quarter marked the seventh consecutive quarter of record profits for our International + Other segment, as we continue to execute our strategy to become a more global company.»