SEGMENT OPERATING HIGHLIGHTS – FOURTH QUARTER
Grocery Products (16% of Net Sales, 26% of Total Segment Operating Profit) The Grocery Products segment profit increased 22 percent, led by strong sales of the SPAM® family of products and the portfolio of products within our MegaMex Foods joint venture. Sales for the quarter were up 21 percent, with contributions by the aforementioned products and HORMEL® chili.
Refrigerated Foods (49% of Net Sales, 30% of Total Segment Operating Profit) Refrigerated Foods segment profit declined 12 percent, as strong results in our value-added businesses were not able to fully offset lower pork operating margins and losses in our live hog operations. Sales for the quarter were down 3 percent, due to lower commodity meat prices. Value-added products grew in the quarter, led by HORMEL® pepperoni and party trays in the Meat Products group and HORMEL® NATURAL CHOICE® deli meats in the Foodservice group.
Jennie-O Turkey Store (20% of Net Sales, 26% of Total Segment Operating Profit) Jennie-O Turkey Store had another solid quarter, with segment profit up 5 percent. The continued sales growth of value-added products and an improved product mix offset higher feed costs during the quarter. Sales for the quarter increased 5 percent, led by sales of JENNIE-O TURKEY STORE® fresh tray pack, turkey bacon and turkey burgers.Specialty Foods (11% of Net Sales, 12% of Total Segment Operating Profit) The Specialty Foods segment posted operating profits 8 percent higher than last year on a 7 percent increase in sales. Higher sales of private label canned meats contributed to the improved results. All Other (4% of Net Sales, 6% of Total Segment Operating Profit) The All Other segment, which consists primarily of Hormel Foods International, posted segment profits that were 24 percent ahead of last year, while sales grew 1 percent. Strong export sales to Canada and improved margins in the SPAM® family of products contributed to the results. General Corporate Expense General corporate expenses were lower, driven principally by a reduction in the lower of cost or market inventory reserve and lower employee related costs. OUTLOOK "We expect to deliver sales and earnings growth in fiscal 2013. In particular, we are looking for our Refrigerated Foods, Grocery Products, Specialty Foods and All Other (International) segments to drive profit growth in fiscal 2013, as our Jennie-O Turkey Store segment goes up against higher grain costs and historically high results. We plan on making additional cuts to both our turkey and pork harvest levels during fiscal 2013, to reduce our exposure to volatile commodity markets. Taking all of the relevant factors into account, we are setting our 2013 guidance range at $1.90 to $2.00 per share," remarked Ettinger.