Hormel Foods' 1st Quarter Fiscal 2023 Results Are Mixed

First quarter fiscal 2023 results were mixed for Hormel Foods.

The company transitioned to three operating segments in October 2022 — Retail, Foodservice, and International.

Jim Snee, chairman of the board, president and CEO of Hormel, stated that the operating environment at the start of fiscal 2023 was challenging.

"While many areas of the business performed ahead of last year, our results were disappointing and below our expectations, reflecting the persistent impact from inflationary pressures, supply chain inefficiencies, and lower-than-expected sales volumes across our business segments," he said.

Generally speaking, consumer and operator demand remains elevated in key categories. The company is at a balanced growth between volume and price across many areas of its portfolio.

"Specific to the first quarter, our top-line results were mixed. We continued to see strong demand for many of our center-store, refrigerated, Mexican and premium items at retail,” Snee said. “Likewise, solutions-based items in our Foodservice segment had another strong quarter, with volume growth in sliced meats.”

While these segments saw gains, there were planned volume declines in commodity pork, continued volume impacts across the company’s turkey supply chain, and lower sales of snack nuts. Snee added that its China team also faced difficult operating conditions throughout the quarter. 

Volume and net sales declined for each segment for this quarter due to lower fresh pork availability resulting from the company's new pork supply agreement, and lower turkey volumes due to the ongoing impacts of highly pathogenic avian influenza (HPAI) in the company's vertically integrated turkey supply chain.

For now, Hormel has plans to: amplify scale in snacking and entertaining; enhance growth of its ethnic and food forward lines; expand its leadership in foodservice; develop its global presence; and continue to transform the company.

Snee explained that means taking immediate action to combat inventory levels and warehousing costs, as well as execute strategies to drive improvement for the Planters business and the snack nuts category. Third, Hormel will continue to implement its new operating model, GoFWD, including capturing the synergies from fully integrating the Jennie-O Turkey Store business and standing up its Brand Fuel center of excellence.