Hormel Foods Achieves Record Fourth Quarter And Full Year Results

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November 22, 2016

Austin, Minn.

Hormel Foods Corporation (NYSE: HRL) today reported record performance for the fiscal year 2016 fourth quarter and full year.

All comparisons are to the fourth quarter or full year of fiscal 2015. The fourth quarter and full year of 2016 contains an extra week as compared to the prior year. All earnings per share measures are adjusted to reflect the two-for-one stock split distributed on February 9, 2016.

SUMMARY

Fourth Quarter

• Record diluted earnings per share of $0.45, up 29 percent from 2015 GAAP EPS of $0.35; diluted EPS up 22 percent from non-GAAP¹ adjusted diluted EPS² of $0.37
• Record net earnings of $244 million, up 30 percent from 2015 GAAP net earnings of $187 million; net earnings up 22 percent from non-GAAP¹ adjusted net earnings² of $200 million

• Record dollar sales of $2.6 billion, up 9 percent; volume up 9 percent

• Refrigerated Foods operating profit up 51 percent; volume up 9 percent; dollar sales up 8 percent

• Jennie-O Turkey Store operating profit up 26 percent; volume up 32 percent; dollar sales up 29 percent

• Grocery Products operating profit up 5 percent; volume up 12 percent (sales of JUSTIN’S^® products contributed 2 percent to volume growth); dollar sales up 16 percent (sales of JUSTIN’S^® products contributed 6 percent to sales growth)

• International & Other operating profit down 16 percent; volume up 11 percent; dollar sales up 2 percent

• Specialty Foods operating profit down 10 percent as compared to 2015 GAAP operating profit; operating profit down 42 percent as compared to 2015 non-GAAP¹ adjusted segment operating profit²; volume down 29 percent; dollar sales down 20 percent

COMMENTARY

“We had a strong finish to fiscal 2016, achieving record earnings for the fourteenth consecutive quarter,” said Jim Snee, president and chief executive officer. “Three of our five business segments delivered sales, volume, and earnings growth, again demonstrating our balanced business model. Refrigerated Foods and Jennie-O Turkey Store both had excellent quarters with growth coming from value-added, branded products and improved market conditions. Grocery Products enjoyed a strong quarter aided by the inclusion of the JUSTIN’S^® specialty nut butter business in addition to strong results from SPAM^® luncheon meat and SKIPPY^® peanut butter,” Snee said.

“Specialty Foods sales declined, primarily due to the divestiture of Diamond Crystal Brands in May, while sales of MUSCLE MILK^® protein products were strong,” mentioned Snee. “Specialty Foods earnings decreased primarily due to increased advertising. Our International segment had a tough quarter as the team continues to work through challenging market conditions in China.”

“Fiscal 2017 will mark the 51^st consecutive year we have increased our dividend, an accomplishment few other companies can claim,” Snee said. “Effective in the new fiscal year the annual dividend will be $0.68 per share, a 17 percent increase.”

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About Hormel Foods – Inspired People. Inspired Food.™

Hormel Foods Corporation, based in Austin, Minn., is a global branded food company with over $9 billion in annual revenues across 75 countries worldwide. Its brands include SKIPPY^®, SPAM^®, Hormel^® Natural Choice^®, Applegate^®, Justin’s^®, Wholly Guacamole^®, Hormel^® Black Label^® and more than 30 other beloved brands. The company is a member of the S&P 500 Index and the S&P 500 Dividend Aristocrats, was named one of “The 100 Best Corporate Citizens” by Corporate Responsibility Magazine for the eighth year in a row, and has received numerous other awards and accolades for its corporate responsibility and community service efforts. In 2016, the company celebrated its 125th anniversary and announced its new vision for the future – Inspired People. Inspired Food.™ – focusing on its legacy of innovation. For more information, visit www.hormelfoods.com and http://2015csr.hormelfoods.com/.