Get All Access for FREEMarket News & Research,
Live Transcripts & Audio,
and a whole lot more…
$HRL's effective tax rate for 4Q15 rose to 35.2% from 34.1% last year, due to the impact of the goodwill impairment charge. For FY15, effective tax rate increased to 35% from 34.3% in the prior year, impacted by the unfavorable impact of the exit from international JV businesses. $HRL sees effective tax rate in FY16 of about 34%.
Food company $HRL has acquired Columbus Manufacturing, a meat and salami company, from Arbor Investments for about $850MM. The transaction is expected to be modestly accretive to Hormel’s earnings per share in fiscal 2018. The company, meanwhile, raised its fiscal 2018 sales guidance to $9.7-$10.1Bil, and earnings per share outlook to $1.62-$1.72.
$HRL's CapEx for 4Q17 totaled $103MM compared to $90MM last year. The company expects CapEx to be approx. $425MM in 2018. The higher level of capital is driven by the investment into additional capacity for high-margin products and projects to improve manufacturing efficiencies.
$HRL has named Glenn Leitch as EVP of Supply Chain. The company also announced that Steve Lykken has been named SVP, Hormel Foods and President, Jennie-O Turkey Store. Leitch is currently Group Vice President, Hormel Foods and President, Jennie-O Turkey Store while Lykken was most recently President of Applegate, a Hormel Foods company.
$HRL, a branded food company, said Jeffrey Ettinger will retire as Chairman of the Board. Jim Snee, CEO and President of Hormel Foods, will assume the post of Chairman of the Board on November 20, 2017. Snee Became the CEO in October 2016, after serving the company as President and COO since October 2015.
$HRL's Jennie-O Turkey store is under pressure due to low Turkey markets aand increased competition and expense. During 3Q17, the segment reported 20% drop in its earnings, while sales and volume dropped 9% and 7% respectively. This decrease was due to lower production levels.
$HRL does not plant to operate the newly acquired company,Fontanini Italian Meats and Sausages as an independent subsidiary, but plans to integrate it into Refrigerated Foods operations groups and the sales force into the foodservice division.
$HRL said it acquired Cidade do Sol, a value-added meats company in Brazil. The acquired company offers over 70 products under the brand name Ceratti. The purchase price was approx. $104MM. This acquisition marks the company's first entry into South America.
Food and meat products manufacturer $HRL reported a drop in its 3Q17 earnings to $182.5MM, or $0.34 per share, from $195.6MM, or $0.36 per share during 3Q16. The results reflect the divestiture of the Diamond Crystal Brands business and the Farmer John business. Revenues fell 4.1% YoY to $2.21Bil. Volume was down 9%.
Branded food company $HRL has appointed Lisa Selk as CEO of its sports nutrition subsidiary CytoSport. Previously, Selk worked as Marketing Director for a portfolio of brands at Hormel Foods. She joined the company in 1998 as a food scientist in the research and development department, and later held various leadership roles.
$HRL acquired Fontanini Italian Meats and Sausages, a branded foodservice business, from Capitol Wholesale Meats Inc. Fontanini will continue operations out of their facility in the Chicago metropolitan area and will report into the Refrigerated Foods segment. The transaction was structured as an asset sale with a purchase price of $425MM.
$HRL said that for 2Q17, three of the company's five segments reported earnings growth. Refrigerated Foods, International and Grocery Products grew earnings, while Specialty Products earnings were down 16%. For 2H17, $HRL expects percentage decline in earnings for Jennie-O Turkey Store to be in the high teen.
$HRL maintained its FY17 EPS guidance of $1.65-1.71, but expects the results at Jennie-O Turkey Store to push its full-year earnings toward the lower end of this range. The company expects the pressure on Jennie-O Turkey Store to continue for the remainder of the year given the oversupply in the turkey industry.