HORMEL FOODS REPORTS FOURTH QUARTER AND FULL-YEAR FISCAL 2023 RESULTS

Company is investing in transformation to accelerate growth as a global branded food company

AUSTIN, Minn., Nov. 29, 2023 /PRNewswire/ — Hormel Foods Corporation (NYSE: HRL), a Fortune 500 global branded food company, today reported fourth quarter and full-year fiscal 2023 results. All comparisons are to the fourth quarter of fiscal 2022 unless otherwise noted.

EXECUTIVE SUMMARY – FISCAL 2023

• Net sales of $12.1 billion
• Operating income of $1.1 billion; adjusted operating income¹ of $1.2 billion
• Operating margin of 8.9%; adjusted operating margin¹ of 9.8%
• Earnings before income taxes of $1.0 billion; adjusted earnings before income taxes¹ of $1.1 billion
• Effective tax rate of 21.8%
• Diluted net earnings per share of $1.45; adjusted diluted net earnings per share¹ of $1.61
• Cash flow from operations of $1.0 billion

EXECUTIVE SUMMARY – FOURTH QUARTER

• Net sales of $3.2 billion
• Operating income of $270 million; adjusted operating income¹ of $313 million
• Operating margin of 8.4%; adjusted operating margin¹ of 9.8%
• Earnings before income taxes of $246 million; adjusted earnings before income taxes¹ of $289 million
• Effective tax rate of 20.5%
• Diluted net earnings per share of $0.36; adjusted diluted net earnings per share¹ of $0.42
• Cash flow from operations of $319 million

EXECUTIVE COMMENTARY
“In fiscal 2023, we achieved our second consecutive year of net sales in excess of $12 billion, continued to reinvest in the growth of our leading brands, drove strong operating cash flows of $1 billion and returned a record amount of cash to our shareholders in the form of dividends,” said Jim Snee, chairman of the board, president and chief executive officer. “Despite challenging operating conditions to end the year, our results were in line with the low end of our revenue and adjusted net earnings per share¹ expectations, as a strong finish from our Foodservice segment was offset by pressure in our Retail and International businesses.”

“Our Foodservice segment delivered outstanding results throughout the year, leveraging our direct-selling team, operator-focused approach and solutions-based portfolio,” Snee said. “In our Retail segment, the team made tremendous progress implementing its new structure, while growing or maintaining market share for many of our leading brands across key categories, including Hormel^® Black Label^® raw bacon, Planters^® snack nuts, Jennie-O^® ground turkey, the SPAM^® family of products and in our Mexican foods portfolio. Lastly, we further expanded our global presence with an investment in Garudafood in Indonesia. This investment supports the global execution of our entertaining and snacking strategy while enhancing the long-term growth profile of our International business.”

“Looking ahead, our teams continue to navigate through a dynamic operating environment characterized by slowing consumer demand, inflationary pressures and headwinds in our turkey business,” Snee said. “We expect fiscal 2024 to be a year of investment, consistent with the plan we outlined at our recent investor day. We remain focused on our strategic priorities, executing on our transformation and modernization initiative, fueling our innovation pipeline and exiting the year with momentum in our business segments. I remain confident that we have the right brands, strategy, people and culture to deliver on our commitment to improve our business and drive long-term shareholder returns and growth.”

FISCAL 2024 OUTLOOK
For fiscal 2024, the Company expects:

• Net sales growth of 1% to 3%, which assumes volume growth in key categories, higher brand support and innovation, a benefit from incremental pricing actions and current assumptions for raw material input costs;
• Diluted net earnings per share to be $1.43 to $1.57 and adjusted diluted net earnings per share¹ to be $1.51 to $1.65.* The Company expects earnings to decline in the first half of the year due to the impact from lower turkey markets, lower volumes in the Retail segment and softness in its China business. The Company expects segment profit growth from all three segments in the back half of the year; and
• A modest benefit to net earnings from its transformation and modernization initiative.