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Hormel Foods Management Discusses Q3 2012 Results - Earnings Call Transcript

Before we get started with the results of the quarter, I need to reference the Safe Harbor statement. Some of the comments made today will be forward-looking and are made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed in or implied by the statements we will be making. Among the factors that may affect the operating results of the company are fluctuations in the cost and availability of raw materials and market conditions for finished products. Please refer to the cautionary statements and risk factors on Pages 30 to 36 in the company's 10-Q for the quarter ended April 29, 2012, which was filed with the SEC on June 8, 2012, for more details. It can be accessed on our website. Now I'll turn the call over to Jeff.

Jeffrey M. Ettinger

Thank you, Kevin. Good morning, everyone. We are pleased to report record earnings and sales for the third quarter. Earnings for the quarter were $0.41 per share, up 14% from earnings of $0.36 a share a year ago. All 5 segments registered gains in segment profit. Total dollar sales topped $2 billion, an increase of 5% over a year ago on solid volume growth of 4%. I will now take you through each segment.

Our Grocery Products team delivered an operating profit increase of 32% and a dollar sales increase of 21% for the third quarter. You may recall that we began including Don Miguel sales in our Grocery Product segment results this past quarter. Sales for Grocery Products grew 3% excluding Don Miguel in the quarter. Among the contributors to sales growth in this segment were our SPAM family of products, Hormel Compleats microwave meals and our MegaMex portfolio.

For the SPAM family of products, our advertising campaign featuring Sir Can-A-Lot and the publicity around the 75th anniversary has contributed to the nice sales increase. We were pleased to see growth by our Hormel Compleats microwave meals in Q3. We are in the process of introducing additional new Compleats meals that feature cheesy pasta. We also introduced some other new microwavable items in the quarter, including SPAM meals and Hormel sandwich makers. These new items have performed well in limited markets so far.

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