In a release dated November 30th Hormel Foods (HRL) reported on the 4th quarter and fiscal 2022 ending October 30th 2022. For the quarter the company earned $279.9 million on revenue of $3,283 million with a diluted EPS of $0.51. Comparable values for the 4th quarter of fiscal 2021 ending October 30th were net income of $281.7 million on revenue of $3,455 million with a diluted EPS also of $0.51. Gross margin increased to 17.3 percent for the most recent quarter compared to 16.7 percent for the 4th quarter of 2021. Operating margin increased from 10.3 percent to 11.3 percent for the 4thquarter of 2022. Profit margin rose from 8.2 percent in the 4th quarter of 2021 to 8.5 percent for the most recent quarter.
For FY 2022 Hormel Foods earned $1,000 million on sales of $12,459 million with a diluted EPS of $1.82. Comparable values for FY 2021 were net earnings of $909 million on sales of $11,386 million with a diluted EPS of $1.66.
For the 4th quarter of 2022 the Jennie-O Turkey Store Segment generated sales of $391.9 million with an operating profit of $75.9 million reflecting an operating margin of 19.4 percent. For the 4th quarter of 2021, revenue and operating profit were $459.7 million and $30.5 million respectively, yielding an operating margin of 6.6 percent. Compared to the 4th quarter of 2021 volume for the Jennie-O segment was down 32.0 percent to 163.7 million lbs. as a result of losses due to HPAI. Sales value was down 14.8 percent. Unit revenue increased 25.1 percent from $1.91 per lb. to $2.39 per lb. for the most recent quarter. Segment contribution was however up 149 percent. Growth was derived from increased sales into food service, demand for whole birds and branded products. As in the previous quarter of 2022 increases in feed and logistic costs detracted from earnings.
In commenting on Corporate results Jim Snee, Chairman, president and CEO stated “We achieved all-time record sales and double-digit profit growth in fiscal 2022. In addition to delivering year-over-year growth, our team successfully integrated the Planters® business, made progress on our six strategic priorities, showed tremendous resolve in overcoming a challenging operating environment, and laid the groundwork for the next step in our evolution as a global branded company, the Go Forward (GoFWD) initiative."
In relation to the turkey business Snee observed “Segment profit growth was due to the Jennie-O Turkey Store segment, as the team effectively managed limited turkey supply and maximized operational performance. We also made progress across our supply chain to increase production capabilities and restore inventories on key product lines." The report included the statement “As anticipated, volume and sales declined as a result of the supply impacts on the company's vertically integrated supply chain from highly pathogenic avian influenza (HPAI). Segment profit growth was primarily due to higher commodity prices and improved value-added mix”.
Hormel Foods posted total assets of $13,307 million on October 30th 2022 of which $6,728 million comprised goodwill and intangibles. Long-term debt was $3,432 million against an intraday market capitalization of $25,670 million. HRL has ranged over the past 52 weeks from $42.46 to $55.11 with a 50-day moving average of $46.68. HRL trades with a forward P/E of 22.4 and a beta of 0.2. For the trailing 12-month period, operating margin attained 10.3 percent and profit margin 7.9 percent. The Company has generated a return on assets of 6.4 percent and on equity, 14.2 percent. HRL closed at $48.16 on November 29th but fell at the open on November 30th following the release to $46.58 but regained value to $47.64 by close of trading on Friday December 2nd.
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