US food group Hormel Foods saw its profits accelerate in the final quarter of its financial year amid stronger earnings from its grocery products business.
Hormel, which makes Spam canned meat, booked a 13% increase in net earnings to US$134.3m for the three months to 28 October. Across the group, fourth-quarter sales were up 3% at $2.2bn.
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Operating profit from its grocery products arm was up 22%, boosted by a 17% increase in volumes. A contribution from taco and burrito business Don Miguel Foods, which Hormel’s Mexican food venture MegaMex Foods, helped volumes.
Profits from Hormel’s Jennie-O Turkey Store turkey unit, its speciality foods business and its international operations increased in the quarter. Earnings from refrigerated foods dropped amid lower pork margins.
Over the financial year as a whole, Hormel’s net earnings increased 5.5% to $500.1m. Hormel posted “record” annual net sales of $8.2bn, up 4%.
Looking to the new financial year, Hormel chairman, president and CEO Jeffrey Ettinger said the company expects sales and earnings to grow but admitted its Jennie-O Turkey Store arm will face higher grain costs.
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By GlobalData“We plan on making additional cuts to both our turkey and pork harvest levels during fiscal 2013, to reduce our exposure to volatile commodity markets,” he added.
Shares in Hormel were down 3.99% at $30.05 at 16:35 ET
