In its third quarter earnings report, it recorded net sales of $2.3bn, down 3% while pretax earnings rose to $261m, up 1%.
Jim Snee, chairman of the board, president and chief executive officer, explained that the business had to adapt to changing market conditions. "We delivered earnings in line with our expectations this quarter as our experienced management team reacted quickly and appropriately to rapidly changing market conditions," he said. "Innovative branded product lines such as Hormel Bacon 1 cooked bacon, Hormel Fire Braised products, Skippy P.B. & Jelly Minis, and Herdez salsas all delivered strong sales growth.
"Our team also grew sales across many core brands such as SPAM, Dinty Moore, Mary Kitchen and Old Smokehouse.”
Snee said ASF affected input costs in its refrigerated division. "Double-digit earnings growth in Refrigerated Foods offset weaker results in Grocery Products," he said. "Refrigerated Foods effectively managed sales growth and profitability in the midst of volatile input costs caused by African Swine Fever.”
Its Jennie-O Turkey Store saw volume sales dip 4% and net sales drop 5%.
"The Jennie-O Turkey Store team is working diligently to regain lean ground turkey distribution following the two voluntary product recalls," Snee added. "Our International team made progress growing the SPAM and Skippy brands in China while US exports continue to be impacted by global trade uncertainty."
Snee said he expected ASF to cause more trouble to the international pork market.
"We are reaffirming our fiscal 2019 earnings guidance range," he said. "While we have yet to see sustained higher pork prices due to African Swine Fever, we have seen input cost volatility and are expecting further volatility.”
