Hormel Meals noticed its worldwide web gross sales drop 2% and worldwide volumes drop 13% throughout the third quarter of fiscal yr 2024.
But throughout an earnings name on September 4, Hormel President and CEO Jim Snee didn’t appear in the least bothered by it. He even appeared to be pleased with the scenario.
Why wouldn’t he be? Whereas the worldwide gross sales and volumes have been down for the U.S.-based meals firm, the revenue for Hormel’s worldwide enterprise section was up 78% when in comparison with the identical quarter of 2023.
And he credit that to sturdy branded and refrigerated meals exports, in addition to good provide administration for the corporate’s Jennie-O Turkey Retailer subsidiary.
The corporate, and notably in its turkey operations, has been shifting emphasis away from commodity turkey gross sales and extra towards value-added turkey merchandise. And that has labored, he stated.
“Commodity exports, which have traditionally benefited the worldwide high line, however delivered decrease profitability than different parts of the portfolio, have been down considerably year-over-year. This can be a results of improved stock administration and stronger gross sales of value-added turkey objects within the home U.S. market,” Snee defined.
A press launch from Hormel Meals additionally indicated that the corporate offered decrease volumes of commodity pork throughout the newest quarter than it did throughout the identical interval a yr in the past.
Strengths of value-added turkey merchandise
Jennie-O value-added turkey merchandise are additionally offered inside Hormel’s retail and foodservice enterprise segments, and each have been seen as strengths.
Whereas each enterprise segments noticed declining earnings on a year-over yr foundation, Jennie-O floor turkey was seen as a energy for the diversified agrifood firm, whereas the corporate stated within the foodservice section, “progress from branded Jennie-O turkey objects proceed to profit top-line outcomes.
Hormel Meals Chief Monetary Officer Jacinth Smiley stated the the rest of the fiscal yr appears to be like promising for Jennie-O gross sales.
“In turkey, our provide stays wholesome and we’re in a sturdy place to service our prospects and appeal to new enterprise alternatives. We’re projecting progress throughout a number of components of our Jennie-O branded turkey enterprise, together with lean floor turkey in retail and value-added turkey in foodservice,” she stated.
Nonetheless, she added, “Decrease volumes and pricing for commodity complete turkey are anticipated to proceed to strain earnings.”
