On November 24th Hormel Foods Corporation (HRL) reported on Q4 and Fiscal 2020 ending October 25th. For the quarter, Hormel earned $234.5 million on net sales of $2,420 million with an EPS of $0.43. Comparable values for Q4 of FY 2019 were earnings of $255.6 million on net sales of $2,502 million with an EPS of $0.47.
The Jennie-O Turkey Store segment attained sales of $373.4 million in Q4, down 6.3 percent from the $398.5 million in Q4 of 2019. Based on volumes provided, unit revenue in 2020 was $1.57 per lb. down 4.2 percent from $1.64 per lb. in Q4 of 2019. Contribution from the Jennie-O Segment amounted to $32.6 million, down 20.5 percent from $41.03 million in Q4 of 2019. Contribution margin in Q4 of 2020 was 8.7 percent, down 15.5 percent from 10.3 percent in Q4 of 2019.
For Fiscal 2020, Jennie-O earned $105.6 million on net revenue of $1,333 million with a contribution margin of 7.9 percent. For FY 2019, Jennie-O sales were $1,324 million with a contribution of $117.9 million and a contribution margin of 8.9 percent.
In commenting on performance of the Jennie-O segment, Jim Snee, Chairman, president and CEO stated “Volume and sales growth of Jennie-O ® lean ground products and whole birds were exceptionally strong. A reduced amount for food service and commodity products lead to the overall decline in sales. Lower food-service earnings and increased supply chain costs related to the COVID-19 pandemic drove the significant decline in segment profit.”
Hormel Foods has a market capitalization of $26.19 billion with assets of $9.91 billion. HRL has traded over the past 52-weeks in a range of $39.01 to $52.97 with a 50-day moving average of $49.93. The 12-month trailing operating margin for Hormel was 11.4 percent with a profit margin of 10.0 percent. Hormel Foods has a 12-month trailing return on assets of 7.9 percent and 15.3 percent on equity.