Hormel Foods has raised its forecast for annual earnings on the back of increased profits during the first quarter of its financial year.
For the period ended 25 January, net income was up to US$171.7m compared with $153.3m, the US group said today (19 February).
Operating profit increased to $265.9m, versus $237.2m a year earlier.
Sales grew 7% $2.4bn, with volumes up 3%. Sales were driven by higher volumes from Hormel’s Jennie-O Turkey store business and the impact of last year’s acquisition of Muscle Milk maker CytoSport Holdings.
“We are off to an excellent start to our fiscal year with double-digit earnings growth and record sales in the first quarter,” said Jeffrey Ettinger, chairman of the board, president and CEO at Hormel. “Jennie-O Turkey Store increased operating profit by 56 percent, with strong value-added product sales growth, robust turkey markets, and favourable input costs.
Ettinger also pointed to an “excellent quarter” from Hormel’s refrigerated foods arm, which accounts for 48% of group sales. The division saw volumes fall 3% but increased sales by 1% thanks to increased value-added sales. It also reported a 19% in segment operating profit.
Hormel raised its forecast for 2014/2015 non-GAAP adjusted earnings guidance from a range of $2.45 to $2.55 per share to $2.50 to $2.60.
Shares in Hormel were up 2.12% at $57.33 at 10:13 ET.