Hormel Foods has lifted its full-year profit target after a “strong” second quarter, when the US food group enjoyed a double-digit jump in sales and earnings.
The Spam maker today (25 May) pushed up its forecast for annual earnings per share from US$1.62-1.68 to $1.67-1.73.
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Chairman, president and CEO Jeffrey Ettinger said Hormel expects higher input costs during the remainder of its financial year but said the company would “drive efficiency gains and advance pricing” to offset the pressure from commodities.
Hormel reported a 40.7% increase in net earnings to $109.6m for the second quarter to 1 May. Excluding charges booked in last year’s second quarter from the closure of Hormel’s Valley Fresh plant and healthcare costs, net earnings climbed 20.1%.
The company’s segment operating profit was up 18% at $183.6m compared to last year’s second-quarter figures that excluded the charges. Net sales rose 15.3% to $1.96bn due in part to a 7% increase in volumes.
“Earnings growth was led by our refrigerated foods and Jennie-O Turkey Store segments, both of which had a strong quarter. We are also gratified to attain sales growth in all five of our segments,” Ettinger said.
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