Q2 2024 Hormel Foods Corp Earnings Call Transcript
Key Points
- Hormel Foods Corp (HRL) delivered a strong first half of the year with better-than-expected earnings and significant improvement in operating cash flows.
- The foodservice segment showed consistent growth, achieving volume and segment profit growth for the fourth consecutive quarter.
- International segment profitability improved significantly, with segment profit up almost 30% in the first half.
- The company made progress on strategic initiatives, including the Planters Snack Nuts business, which responded positively to brand-building and innovation efforts.
- Hormel Foods Corp (HRL) increased total points of distribution by 6% for flagship brands and 4% for rising brands, indicating strong retail performance.
- The Turkey business faced significant headwinds, negatively impacting the overall performance and expected to remain challenged for the rest of the fiscal year.
- The company experienced an unplanned production interruption at the Planters facility in Suffolk, Virginia, which is expected to impact third-quarter earnings.
- SG&A expenses increased due to higher employee-related expenses and costs associated with the transform and modernize initiatives.
- The retail segment faced a decline in volume, particularly impacted by lower sales across whole bird turkeys.
- Certain categories within the convenient meals and proteins vertical experienced softer demand and increased competition, affecting overall performance.
Good morning, ladies and gentlemen, and welcome to the Hormel Foods Corporation second-quarter earnings conference call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct the question-and-answer session. (Operator Instructions)
I would now like to turn the conference over to David Dahlstrom, Director of Investor Relations. Please go ahead.
Good morning. Welcome to the Hormel Foods conference call. For the second quarter of fiscal 2024. We released our results this morning before the market opened. A copy of the release can be found on our website at hormelfoods.com under the Investors section. On our call today is Jim Snee, Chairman of the Board, President and Chief Executive Officer; Jacinth Smiley, Executive Vice President and Chief Financial Officer; and Deanna Brady, Executive Vice President of the Retail segment.
Jim will review the company's second quarter results and give a perspective on the rest of fiscal 2024, Jacinth will
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