Hormel Foods Corporation (NYSE:HRL) Q3 2018 Earnings Conference Call - Final Transcript

Aug 23, 2018 • 09:00 am ET


Hormel Foods Corporation (NYSE:HRL) Q3 2018 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Hormel Foods Third Quarter 2018 Earnings Release Conference Call. (Operator Instructions). As a reminder, this conference is being recorded Thursday, 23rd of August 2018.

I would now like to turn the conference over to Nathan Annis, Director of IR. Please go ahead.

Nathan Annis

Good morning. Welcome to the Hormel Foods conference call for the third quarter of fiscal 2018. We released our results this morning before the market opened around 6:30 a.m. Eastern. If you did not receive a copy of the release, you can find it on our website at hormelfoods.com under the Investors section.

On our call today is Jim Snee, Chairman of the Board, President, and CEO; and Jim Sheehan, SVP and CFO. Jim Snee will provide a review of each segment's performance for the quarter and our outlook for the remainder of 2018. Jim Sheehan will provide detailed financial results for the quarter and further assumptions relating to our 2018 outlook. The line will be open for questions following Jim Sheehan's remarks. (Operator Instructions).

Forward-Looking Cautionary Statements). Additionally, please note the company uses non-GAAP results to provide investors with a better understanding of the company's third quarter operating performance by excluding sales and volume impact of the acquisitions of Ceratti, Columbus Craft Meats, and Fontanini. Discussion on non-GAAP information is detailed in our press release located on our corporate website. Please note, during our call today, we will refer to these non-GAAP results as organic net sales and organic volume.

I will now turn the call over to Jim Snee.

Jim Snee

Thank you, Nathan. Good morning, everyone. We are pleased to report our team delivered record sales and earnings in the third quarter. Our company's long-term growth formula is anchored in building brands, innovation, strategic acquisitions, and achieving balance across our portfolio. We take a consistent, long-term approach to our business decisions and strategy.

Over the years, we have increased marketing investments in support of our brands. I am pleased to report those investments are paying off, with growth from both established brands, such as SPAM and Skippy, and with emerging brands, such as Natural Choice, Applegate, Jennie-O, Wholly Guacamole, and Herdez.

We are also delivering innovation to the marketplace at a faster cadence than ever before. Food service innovations, such as Bacon 1, Fire-Braised meats, and Austin Blues, continue to generate growth. Retail innovations, like Skippy PB bites, Herdez guacamole salsa, and Natural Choice snacks, are also making meaningful contributions to our results.

Our recent disciplined and strategic acquisitions expand our presence in areas where we are a market leader, such as deli and food service. While it is early, I am happy to report the Fontanini, Columbus, and Ceratti acquisitions are meeting our expectations. The final component of our long-term formula is balance. This is why we made the decision last week to divest the Fremont harvest facility, which when complete, will decrease our earnings volatility.

Our long-term strategy is sound and our