Hormel Foods Margin expansion continued

Resulty of second quarter are diluted earnings per share of $0.39, down 2.5% from 2016 EPS of $0.40, net earnings of $211 mill., down 2% compared to 2016 net earnings of $215 mill., sales of $2.2 bn, down 5%; Non-GAAP1 adjusted sales2 up 2%, volume down 11%; Non-GAAP1 adjusted volume2 up 1% and grocery products operating profit up 15%; volume up 2%; non-GAAP1 adjusted volume2 flat; sales up 8%; Non-GAAP1 adjusted sales2 up 2%.

The International & Other operating profit rose up 38%, volume up 17% and sales up 19%. The refrigerated Foods operating profit was flat with a volume down 14%; Non-GAAP1 adjusted volume2 up % and sales down 6%; Non-GAAP1 adjusted sales2 up 5%.

Specialty Foods operating profit goes down to 16%, volume goes down to 33%. Non-GAAP1 adjusted volume2 rose up to 3%, sales down to 24%, Non-GAAP1 adjusted sales2 flat. Jennie-O Turkey Store operating profit goes down to 29%, the volume falls down to 6 %, sales down to 8%.

“Growth in many of our key brands drove excellent results in the Grocery Products and International segments. The divestitures of Farmer John and Diamond Crystal Brands allowed Refrigerated Foods and Specialty Foods to enhance their operating margins,” Jim Snee, president and chief executive officer, said. “Unfavorable market conditions in the turkey industry caused by an oversupply of turkey continued to pressure Jennie-O Turkey Store sales and earnings.”

“We are maintaining our fiscal 2017 guidance range of $1.65 to $1.71 per share but expect the results at Jennie-O Turkey Store to push our full-year earnings toward the lower end of this range,” Snee said. “We expect the pressure on Jennie-O Turkey Store to continue for the remainder of the fiscal year given the oversupply in the turkey industry.”