Hormel Foods smoothing out supply chain constraints
By Keith Nunes, Food Business News
AUSTIN, MINN. – Hormel Foods Corp. has been hampered by supply chain constraints for much of the pandemic. Completed initiatives have unlocked capacity and given the company the opportunity to fully meet demand.
“We continue to strike a balance between the consumer demand we are seeing and our supply chain's ability to meet that demand,” said James P. Snee, chairman, president and chief executive officer, during a Feb. 18 conference call to discuss quarterly results. “We increased production levels this quarter through a combination of improving efficiencies, bringing on new capacity and further leveraging our strategic supply chain partners. We expect this steady improvement to continue throughout the year. We have been successful in a nu
The added capacity pushed first-quarter sales higher but pressured the bottom line. Net income for the quarter ended Jan. 24 totaled $222 million, equal to 41˘ per share on the common stock, down 9% from $243 million, or 45˘ per share, in the same period a year ago.
Quarterly sales rose 3% to $2.5 billion.
Refrigerated Foods, Hormel’s largest business unit, saw sales rise 1% to $1.4 billion, but operating profit decline 16% to $141 million. Strong retail and deli sales growth overcame sales declines in foodservice, according to the company. But the lower foodservice sales combined with a decrease in commodity profits and incremental supply chain costs related to COVID-19 pressured segment operating profit.
Grocery Products sales rose 7% during the quarter to $578 million and operating profit surged 35% to $92 million...