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Hormel Foods Corp. based in Austin, Minnesota, had the highest quarterly net sales in its history, the company reported in a press release Thursday discussing its performance in the third quarter of fiscal 2021.
“This record performance demonstrates the strength of our brands and the ability of our team to successfully integrate the Planters® business, which is a remarkable achievement this quarter given the difficult operating conditions,” said Jim Snee, chairman, president and chief executive officer.
The Jennie-O Turkey Store, which also includes the Faribault location, increased volume by 9%. And while net sales rose 22%, profits fell 17%.
Jennie-O’s volume and net sales increased due to improved food service, shipping of whole birds and goods. Jennie-O Mager Ground Turkey sales rose due to pricing measures implemented in previous quarters and remain well above pre-pandemic levels. Segment profit was lower due to the impact of significantly higher feed costs and an increase in freight costs.
Strong sales growth in SPAM lunchtime meat, a rebound in food service exports, continued strong results in China and improved performance in Brazil reportedly resulted in record sales for the quarter. In addition to higher sales, the improvement in segment profit was driven by higher export margins for branded and fresh pork.
“We saw significant inflationary pressures during the quarter in almost all areas of our business, including raw materials, packaging, freight, labor and many other inputs,” said Snee. “We have implemented pricing measures on virtually every brand, which has been our main lever to offset this inflationary pressures. In addition, our experienced management team is taking numerous other strategic measures to offset cost increases, including optimizing promotional activities, improving the product mix and streamlining less efficient products in our portfolio. “
The future looks bright for Hormel, reported Snee.
“We expect to achieve record sales again in the fourth quarter and improve margins when additional pricing measures go into effect,” said Snee. “The combination of a balanced and diversified portfolio, numerous strategic investments and the inclusion of the Planters brand allows us to look to the future with great optimism.”
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