Linked In
News In
Linked In

You are viewing your 1 complimentary article.

Register now to receive full access.

Already registered?

Login | Join us now

Hormel sales rise, as food group focuses on speciality products

Twitter Linkedin eCard

US food company Hormel reported rising sales and revenues, as it focuses on moving up the value chain, buying up specialist products and selling out of its pork business.

On Monday Hormel announced the sale of its pork bands Farmer John and Saag's brands, along with three hog farms, to Smithfield Foods, for $145m.

Hormel said the deal would free up the company to focus on higher-growth food products.

"While the businesses have performed well, they no longer align with our company's growth strategies," said Jim Snee, Hormel's chief executive, in a statement.

Rising sales, volumes

Hormel has been pursuing a strategy of focusing on specialist and premium food production.

This year, Hormel bought an organic nut butter and snack company Justin's for $286m, while last year the company bought the organic meat company Applegate Farms for $775m.

On Tuesday Hormel reported net sales of $2.63bn, up 9.4% year-on-year, in line with analyst expectations, thanks to rising volumes.

The company reported diluted earnings per share of $0.45, in line with expectations.

Higher returns from the refrigerated foods brand, and the Jenny-O turkey brand, rose thanks to "growth coming from value-added, branded products and improved market conditions", said Mr Snee.

Chinese market sours

But the company struggled with a tougher market in China, where consumer demand has been weaker.

"Our international segment had a tough quarter as the team continues to work through challenging market conditions in China," Mr Snee said.

"High pork raw material costs and soft retail demand continue to weigh on the China meat business."

Sales in the speciality food declined due primarily to the divestiture of some brands this year, and earnings in the segment took a hit from higher advertising.

By William Clarke

Twitter Linkedin eCard
Related Stories

Dairy prices find calm at GDT, as investors await milk production signals

Skim milk prices correct their unexpected surge of the last session, while whole milk powder values avoid the tumble suggested by futures values

Extent of hedge funds' grain buying rings alarm bells, but in softs...

Hedge funds raise bullish positioning in grain futures and options to the highest in a year. But has selling in coffee and sugar primed prices for gains?

Hedge fund positions in numbers, for week to March 13

Markets extra lists the latest official data on hedge fund positions in ag commodity derivatives, and how they have changed week on week

Newspaper claims on US meat output 'attempt to disrupt UK-US trade'

US industry officials have hit back at claims in The Guardian newspaper over standards in US meat production
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069