Hormel Foods Corp. (HRL, Financial) filed Quarterly Report for the period ended 2012-04-29.
Hormel Foods Cp has a market cap of $7.74 billion; its shares were traded at around $29.79 with a P/E ratio of 16.8 and P/S ratio of 1. The dividend yield of Hormel Foods Cp stocks is 2%. Hormel Foods Cp had an annual average earning growth of 8.6% over the past 10 years. GuruFocus rated Hormel Foods Cp the business predictability rank of 5-star.
Net sales for the second quarter of fiscal 2012 increased 2.7 percent to $2.01 billion, versus $1.96 billion in the second quarter of fiscal 2011. Tonnage decreased 2.1 percent to 1.20 billion lbs. for the second quarter compared to 1.22 billion lbs. in the same quarter of last year. Net sales for the first six months of fiscal 2012 increased 4.4 percent to $4.05 billion from $3.88 billion in the first six months of fiscal 2011. Tonnage for the first six months of fiscal 2012 decreased 2.1 percent to 2.41 billion lbs. compared to 2.46 billion lbs. in 2011. Four of the five reporting segments of the Company generated top line growth during the second quarter. Value-added sales for Jennie-O Turkey Store and Specialty Foods were particularly strong compared to the prior year, and the retail and foodservice business units within Refrigerated Foods also reported gains for the quarter. Despite some ongoing softness in center-of-the-store sales, the Grocery Products segment also generated an overall increase through growth in sales of SPAM and the MegaMex portfolio of Mexican foods. Export sales by the Companys International business have continued to be robust in fiscal 2012, which also contributed to the improved top-line results. Tonnage reductions for the first half primarily reflect reduced commodity meat sales in both the Refrigerated Foods and Jennie-O Turkey Store segments in fiscal 2012, as well as the ongoing impact of pricing advances taken across the Company in recent quarters.
Gross profit for the second quarter and first six months of fiscal 2012 was $335.6 million and $673.0 million, respectively, compared to $326.2 million and $700.2 million for the same periods last year. Gross profit as a percentage of net sales for the second quarter remained flat at 16.7 percent compared to the prior year, and decreased to 16.6 percent for the first six months of fiscal 2012 from 18.0 percent for the comparable six months of fiscal 2011. The spread between hog costs and primal values has remained well below prior year levels throughout the first six months of the year, resulting in substantial declines in pork operating margins compared to fiscal 2011. Improved margins for Jennie-O Turkey Store and the Companys international export business were able to offset these declines for the second quarter, but have been unable to fully compensate for the sizable year-over-year margin declines that have been incurred in the first half of fiscal 2012. Additionally, shipping and handling expenses to date in fiscal 2012 have increased across all segments of the Company. The Companys value-added businesses within the Grocery Products and Refrigerated Foods segments did generate some margin improvement during the second quarter as a result of lower pork and beef raw material costs.
Selling, general and administrative expenses for the second quarter and first six months of fiscal 2012 were $148.7 million and $301.2 million, respectively, compared to $160.1 million and $305.3 million for the same periods last year. Selling, general and administrative expenses as a percentage of net sales decreased to 7.4 percent for both the second quarter and first six months of fiscal 2012, compared to 8.2 percent and 7.9 percent for the second quarter and first six months, respectively, in fiscal 2011. Pension and insurance related expenses decreased significantly for both the second quarter and six months compared to the prior year, offsetting increases in brokerage and research and development expenses. Advertising expenses have also decreased during the first half of fiscal 2012. However, media support for the Companys key Hormel branded items is ongoing, and new campaigns to support the Companys SPAM and Jennie-O Turkey Store brands will gain momentum in the latter half of the year. The Company expects selling, general and administrative expenses to be approximately 7.5 percent of net sales for the full year in fiscal 2012.
Net earnings attributable to the Companys noncontrolling interests were $1.0 million and $2.0 million for the second quarter and first six months of fiscal 2012, respectively, compared to $1.1 million and $2.3 million for the comparable periods of fiscal 2011. The decreases to date in fiscal 2012 primarily reflect lower results for the Companys Precept Foods business.
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Hormel Foods Cp has a market cap of $7.74 billion; its shares were traded at around $29.79 with a P/E ratio of 16.8 and P/S ratio of 1. The dividend yield of Hormel Foods Cp stocks is 2%. Hormel Foods Cp had an annual average earning growth of 8.6% over the past 10 years. GuruFocus rated Hormel Foods Cp the business predictability rank of 5-star.
Highlight of Business Operations:
Net earnings attributable to the Company for the second quarter of fiscal 2012 increased 16.7 percent to $127.9 million compared to $109.6 million net earnings attributable to the Company in the same quarter of fiscal 2011. Diluted earnings per share for the second quarter increased 20.0 percent to $0.48 from $0.40 diluted earnings per share last year. Net earnings attributable to the Company for the first six months of fiscal 2012 decreased 0.8 percent to $256.3 million compared to $258.4 million net earnings attributable to the Company in fiscal 2011. Diluted earnings per share for the same period were $0.95 in fiscal 2012, even with the prior year.Net sales for the second quarter of fiscal 2012 increased 2.7 percent to $2.01 billion, versus $1.96 billion in the second quarter of fiscal 2011. Tonnage decreased 2.1 percent to 1.20 billion lbs. for the second quarter compared to 1.22 billion lbs. in the same quarter of last year. Net sales for the first six months of fiscal 2012 increased 4.4 percent to $4.05 billion from $3.88 billion in the first six months of fiscal 2011. Tonnage for the first six months of fiscal 2012 decreased 2.1 percent to 2.41 billion lbs. compared to 2.46 billion lbs. in 2011. Four of the five reporting segments of the Company generated top line growth during the second quarter. Value-added sales for Jennie-O Turkey Store and Specialty Foods were particularly strong compared to the prior year, and the retail and foodservice business units within Refrigerated Foods also reported gains for the quarter. Despite some ongoing softness in center-of-the-store sales, the Grocery Products segment also generated an overall increase through growth in sales of SPAM and the MegaMex portfolio of Mexican foods. Export sales by the Companys International business have continued to be robust in fiscal 2012, which also contributed to the improved top-line results. Tonnage reductions for the first half primarily reflect reduced commodity meat sales in both the Refrigerated Foods and Jennie-O Turkey Store segments in fiscal 2012, as well as the ongoing impact of pricing advances taken across the Company in recent quarters.
Gross profit for the second quarter and first six months of fiscal 2012 was $335.6 million and $673.0 million, respectively, compared to $326.2 million and $700.2 million for the same periods last year. Gross profit as a percentage of net sales for the second quarter remained flat at 16.7 percent compared to the prior year, and decreased to 16.6 percent for the first six months of fiscal 2012 from 18.0 percent for the comparable six months of fiscal 2011. The spread between hog costs and primal values has remained well below prior year levels throughout the first six months of the year, resulting in substantial declines in pork operating margins compared to fiscal 2011. Improved margins for Jennie-O Turkey Store and the Companys international export business were able to offset these declines for the second quarter, but have been unable to fully compensate for the sizable year-over-year margin declines that have been incurred in the first half of fiscal 2012. Additionally, shipping and handling expenses to date in fiscal 2012 have increased across all segments of the Company. The Companys value-added businesses within the Grocery Products and Refrigerated Foods segments did generate some margin improvement during the second quarter as a result of lower pork and beef raw material costs.
Selling, general and administrative expenses for the second quarter and first six months of fiscal 2012 were $148.7 million and $301.2 million, respectively, compared to $160.1 million and $305.3 million for the same periods last year. Selling, general and administrative expenses as a percentage of net sales decreased to 7.4 percent for both the second quarter and first six months of fiscal 2012, compared to 8.2 percent and 7.9 percent for the second quarter and first six months, respectively, in fiscal 2011. Pension and insurance related expenses decreased significantly for both the second quarter and six months compared to the prior year, offsetting increases in brokerage and research and development expenses. Advertising expenses have also decreased during the first half of fiscal 2012. However, media support for the Companys key Hormel branded items is ongoing, and new campaigns to support the Companys SPAM and Jennie-O Turkey Store brands will gain momentum in the latter half of the year. The Company expects selling, general and administrative expenses to be approximately 7.5 percent of net sales for the full year in fiscal 2012.
Net earnings attributable to the Companys noncontrolling interests were $1.0 million and $2.0 million for the second quarter and first six months of fiscal 2012, respectively, compared to $1.1 million and $2.3 million for the comparable periods of fiscal 2011. The decreases to date in fiscal 2012 primarily reflect lower results for the Companys Precept Foods business.
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