Hormel reported Thursday morning a record of
"We achieved excellent results in the first quarter," Hormel CEO
Much of that was thanks to Hormel's newest acquisition, Skippy peanut butter, which the
"Our recently acquired Skippy peanut butter business was a strong contributor to our grocery products segment results this quarter," Ettinger said.
Executives say the company's diverse portfolio allows it to steadily grow -- annual profits have increased for five consecutive years, from
Specialty foods, which accounts for 9 percent of sales, posted an 11 percent decrease in profit and 16 percent decrease in sales for the quarter as the company lost its agreement with
"As anticipated, our specialty foods team was unable to post increases this quarter as it rebuilds its product portfolio," Ettinger said.
Other specialty products include single-serve restaurant packets, nutritional food products, supplements and contract manufacturing.
Refrigerated foods, which accounts for 50 percent of sales, reported considerably higher margins, with a 59 percent increase in profit and 6 percent increase in sales, driven by higher pork operating margins, a continued, strong demand for its bacon products, and growth in its foodservice business.
The Jennie-O Turkey division, which accounts for 18 percent of sales, increased sales by 2 percent and profit by 1 percent. A media campaign the company launched in January featuring lean ground turkey helped, along with strong sales for Jennie-O lean ground turkey tray packs and chubs, and turkey bacon. The division also benefited from lower feed costs, the company said.
Grocery products, which also account for 18 percent of sales, increased profit by 13 percent, and the international division, which accounts for 5 percent of sales, increased profit by 32 percent thanks to a strong quarter from Spam along with Skippy.
Ettinger expects the refrigerated foods division to keep its momentum during the second quarter, and said the company has increased distribution of Skippy over the past year, both domestically and internationally. He also expects growth from newer products like Hormel Rev snack wraps and Hormel Fire Braised meats.
"We are anticipating tighter pork raw material supplies over the next few months, but the overall impact to our industry remains to be seen," Ettinger said. "Unusually cold weather and higher fuel costs will continue to inflate cost of goods in our
Ettinger said the company will maintain its 2014 earnings per share guidance of
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