Aug. 21--The Austin, Minnesota-based company reported record third-quarter net earnings of $138 million, up 21 percent from $113.6 million in third-quarter 2013. Hormel also reported a record diluted earnings per share of 51 cents, up from 42 cents per share and higher than projected. In addition, sales for the quarter were about $2.28 billion, up about 6 percent from the same period in 2013.
"We are pleased to have achieved another record quarter,"
Hormel representatives also kept its fourth-quarter share range at $2.17 to $2.27, though the company dropped its low-end advisory.
Hormel experienced a 101 percent segment profit increase in its refrigerated foods division and a 42 percent profit increase in its Jennie-O Turkey Store segment. Ettinger credited the jump in refrigerated foods to strong pork operating margins and growth in several brands, from Black Label bacon and REV wraps to Hormel Fire Braised meats.
Ettinger also pointed out Hormel's high growth in mexican food brands and REV wraps. According to Ettinger, REV wraps earned about $55 million in sales in its grocery division over the past 52 weeks, not counting college, convenience store and other markets.
"That's one of our best-ever first-year performances on a brand," he said.
Hormel also plans to introduce breakfast REV wraps to the market in the near future.
Despite the huge increase in refrigerated foods, operating profits declined 36 percent in grocery products and 25 percent in specialty foods products.
High input costs and subsequent price discounting affected the grocery products segment, though Skippy peanut butter and MegaMex Foods grew in volume during the third quarter.
The specialty foods division was still affected by Hormel's loss of the Diamond Crystal Brand agreement last year. Hormel's acquisition of CytoSports Holding for about $450 million earlier this quarter will be reflected in fourth-quarter earnings.