Hormel Foods Corp HRL
Q1 2011 Earnings Call Transcript

Transcript Call Date 02/22/2011

Operator: Good afternoon. If everyone could find their seats as quickly as possible, I'd like to get the next presentation started. To that end, we're delighted to have with us Jeff Ettinger, the Chairman, CEO and President of Hormel Foods; as well as Jody Ferragen, Executive Vice President and Chief Financial Officer; and Kevin Jones, the Director of Investor Relations.

It's fair to say since taking over the helm Jeff has transformed Hormel from the protein company that everyone would like to be, which is how I thought it was always described to a food company with results that most competitors would like to have over the last two or three years.

With strong performance in both Refrigerated Foods and Jennie-O Turkey Store especially, it's left them with the solid base for growth in the future, something, we're looking forward to hearing about today.

So, Jeff take it away.

Jeffrey M. Ettinger - Chairman, President and CEO: We certainly are going to provide some forward-looking statement this afternoon, but before we do that, we want to start with the hearing now, this morning was earnings announcement morning for our first quarter of 2011 and we're very pleased that our team was able to deliver an outstanding quarter.

We saw a sales increase of 11% with all five operating segments registering year-over-year gains for the quarter. As you can see from tonnage comparison, we had a certain amount of volume increase. The remainder of the increase in net sales will be attributable to pricing and to enhance mix of the products.

On an earnings per share basis, at $0.55 per share, we registered 34% increase for the quarter, again very strong results. All of these numbers are post-split, our shareholders approved the split of our stock back on January 31 and that was enacted in the market on Valentine's Day.

Jody is going to speak to these results. We're going to have this via combined forward-looking and strategic session and also give you a little bit of deeper color about our quarter. Before, I turn it over to Jody I do want to mention our new guidance that was included in the release this morning.

We had started the year at a guidance range of $1.55 to $1.60 per share. Our new guidance range effective today is $1.62 to $1.68 and generating this range of balancing the fact that we definitely see significant momentum in our business, not only that we have such outstanding sales results this quarter, but clearly in 2010, we had very strong sales results through our portfolio, but we are also very mindful of the inflation headwinds that every speaker today has talked to and this certainly will affect our business as well.

With that, I'm going to turn the program over for sometime here to Jody Feragen, Chief Financial Officer.

Jody H. Feragen - EVP and CFO: Thank you, Jeff. It's certainly nice to be in Florida when you come from cold and snowy Minnesota, but it's also nice to be here on a day that we announced record earnings and record sales through our first quarter.

Those sales were really driven by the results at our Jennie-O Turkey Store say were really exceptional results, segment profit up 122% versus last year. Those profits were positively impacted by higher commodity meat prices, continued operational and efficiency gains in their supply chain, increased value-added sale and favorable hedge position.

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