Total 2012 second quarter net earnings were up 17% year-on-year, reaching $127.9 million. Most of this growth came from the company’s Jennie-O Turkey Store, which saw operating profit grow by 50% as a result of added-value sales.
Grocery products also saw growth, with a 10% increase in operating profit, which Hormel put down to lower pork and beef input costs. Net sales increased 1%, with strong results of spam offset by soft sales of microwave products.
In contrast, refrigerated foods performed poorly, with proft down 25% as a result of “lower pork operating margins”. Net sales were relatively staic, with lower pork sales ofsetting stronger sales of the company’s deli meats and party trays.
Jeffrey Ettinger, chairman of the board, president and chief executive officer of Hormel, said the “record results”, with growth in four out of five segments demonstrated that the company had a “balanced” business model.
Looking to the future, he added: “Our second quarter results provide positive momentum heading into the back half of the year. We believe continued weaker pork operating margins will be more than offset by stronger results from our other segments.
“We expect sales in the center of the store to slowly improve as we continue our advertising support of our HORMEL® and SPAM® brands. Taking all of the relevant factors into account, we are maintaining our full-year earnings guidance range of $1.79 to $1.89 per share.”