Hormel Foods Reports Fourth Quarter Results

All comparisons are to the fourth quarter or full year of fiscal 2010. All per share results reported here have been adjusted to give effect to the two-for-one stock split, which was effective February 1, 2011.

HIGHLIGHTS

Fourth Quarter

¨ All quarterly comparisons are based on a 13 week quarter in fiscal 2011, compared to a 14 week quarter in fiscal 2010

¨ Diluted EPS of $.43, down 4 percent from $.45 per share

¨ Segment operating profit decreased 5 percent

¨ Dollar sales of $2.1 billion, increased 2 percent; volume down 7 percent

¨ Grocery Products operating profit up 3 percent; volume down 6 percent; dollar sales down 2 percent

¨ Refrigerated Foods operating profit down 19 percent; volume down 8 percent; dollar sales up 1 percent

¨ Jennie-O Turkey Store operating profit up 4 percent; volume down 11 percent; dollar sales up 2 percent

¨ Specialty Foods operating profit up 12 percent; volume down 1 percent; dollar sales up 10 percent

¨ All Other operating profit up 3 percent; volume up 2 percent; dollar sales up 12 percent

Fiscal Year

¨ All annual comparisons are based on a 52 week fiscal year in 2011, compared to a 53 week fiscal year in 2010

¨ Record diluted EPS of $1.74, up 19 percent from diluted EPS of $1.46

¨ Segment operating profit up 13 percent

¨ Record dollar sales of $7.9 billion, up 9 percent; volume up 1 percent

¨ Grocery Products operating profit up 4 percent; volume flat; dollar sales up 2 percent

¨ Refrigerated Foods operating profit up 6 percent; volume down 1 percent; dollar sales up 10 percent

¨ Jennie-O Turkey Store operating profit up 43 percent; volume up 1 percent; dollar sales up 12 percent

¨ Specialty Foods operating profit down 5 percent; volume up 3 percent; dollar sales up 7 percent

¨ All Other operating profit up 39 percent; volume up 13 percent; dollar sales up 26 percent

The company reported fiscal 2011 fourth quarter net earnings of $117.3 million, down 3 percent from earnings of $121.1 million a year earlier. Diluted earnings per share for the quarter were $0.43, down 4 percent compared to $0.45 last year. Sales for the quarter were $2.1 billion, up 2 percent from the same period in fiscal 2010.

For the year ended October 30, 2011, net earnings were $474.2 million, up 16 percent from adjusted¹ net earnings of $409.0 million last year, and up 20 percent from U.S. GAAP net earnings of $395.6 million. Diluted net earnings per share were $1.74, up 15 percent from diluted adjusted¹ net earnings per share of $1.51 last year and up 19 percent from U.S. GAAP diluted earnings per share of $1.46. Sales for the year ended October 30, 2011, totaled $7.9 billion, up 9 percent from last year.

COMMENTARY

“I am proud of the team for finishing an outstanding year with a fourth quarter that met our expectations. For the quarter, we are pleased to have generated segment profit increases in four out of five segments and an overall net sales increase. Our tonnage was down in comparison with the 14 week quarter last year, but we held our own on volumes in the face of significant pricing actions,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.

“In looking at the full year, we delivered significant sales growth of 9 percent, ending the year at a record $7.9 billion, with all five segments registering increases. We also grew earnings per share by an excellent 19 percent, finishing at record earnings of $1.74 per share. We enjoyed a particularly strong performance by the Jennie-O Turkey Store team, and both our All Other (International) and Refrigerated Foods segments also generated nice profit increases for the year. We enhanced our support of our key HORMEL and JENNIE-O TURKEY STORE brands in fiscal 2011 with effective advertising campaigns, and added to the portfolio of our fast-growing MegaMex Foods joint venture through the acquisition of the WHOLLY GUACAMOLE line and other related products,” commented Ettinger.

“This morning we announced a $.09 per share increase to the annual dividend (or 17.6 percent), making the new dividend $.60 per share. This marks the 46th consecutive year in which we have increased our dividend, and further evidences our intention to deliver superior total returns to our shareholders,” stated Ettinger.

SEGMENT OPERATING HIGHLIGHTS – FOURTH QUARTER

Grocery Products (13% of Net Sales, 23% of Total Segment Operating Profit)

The Grocery Products segment profit increased 3 percent, due in part to improved results by the MegaMex Foods joint venture. Sales overall for the quarter were down 2 percent. The SPAM^® family of products and HORMEL^® Bacon Toppings showed solid sales growth in the quarter.

See explanation regarding adjusted earnings with table on page 4 of this release.

Refrigerated Foods (52% of Net Sales, 36% of Total Segment Operating Profit)

Refrigerated Foods segment profit declined 19 percent, as lower pork operating margins and higher commodity input costs negatively impacted results. Net sales for the quarter were up 1 percent, led byHORMEL^® convenience bacon and HORMEL^® CURE 81^® hams in the Meat Products group and HORMEL^® NATURAL CHOICE^® deli meats and pizza toppings in the Foodservice group.

Jennie-O Turkey Store (20% of Net Sales, 25% of Total Segment Operating Profit)

Jennie-O Turkey Store had a solid quarter, with segment profit up 4 percent and sales up 2 percent. The continued sales growth of value-added products and improved efficiencies throughout the supply chain and operations offset higher feed costs during the quarter.

Specialty Foods (11% of Net Sales, 11% of Total Segment Operating Profit)

The Specialty Foods segment posted operating profits 12 percent higher than last year on a 10 percent increase in sales. Sales mix improvements on bulk and nutritional items and higher sales of private label canned meats contributed to the improved results.

All Other (4% of Net Sales, 5% of Total Segment Operating Profit)

The All Other segment, which consists primarily of Hormel Foods International, posted segment profits that were 3 percent ahead of last year, and sales grew 12 percent. Results were primarily driven by stronger fresh pork exports.

General Corporate Expense

General corporate expenses were lower, driven principally by a reduction in the lower of cost or market inventory reserve.

OUTLOOK

“We expect to deliver sales and earnings growth in fiscal 2012, even amidst some difficult comparisons and less-than-favorable macro conditions. In particular, we are looking for our Grocery Products, Specialty Foods and All Other (International) units to drive profit growth in fiscal 2012, as our Refrigerated Foods and Jennie-O Turkey Store segments maintain their position against historically high results. We also anticipate the comparisons to be more difficult in the first half of the year, becoming more favorable later in the year. Taking all of the relevant factors into account, we are setting our 2012 guidance range at $1.79 to $1.89 per share,” remarked Ettinger.

DIVIDENDS

Effective November 15, 2011, the Company paid its 333^rd consecutive quarterly dividend, at the annual rate of $.51, marking the beginning of its 84^th consecutive year of dividends paid.

CONFERENCE CALL

A conference call will be webcast at 8:00 a.m. CT on Tuesday, November 22, 2011. Access is available at https://www.hormelfoods.com. If you do not have Internet access and want to listen to the call over the phone, the dial-in number is 877-941-8609 and the access code is 4482517. An audio replay is available by calling 800-406-7325 and entering access code 4482517. The audio replay will be available beginning at 10:30 a.m. CT on Tuesday, November 22, 2011, through 11:59 p.m. CT on December 6, 2011. The Webcast replay will be available at 10:30 a.m. CT, Tuesday, November 22, 2011, and archived for one year.

COMPARISON OF U.S. GAAP TO NON-GAAP FINANCIAL MEASUREMENTS

The non-GAAP adjusted financial measurements are provided to assist the investor in better understanding the Company’s operating performance by excluding the impact of certain non-recurring items affecting comparability. Non-GAAP measurements are not intended to be a substitute for U.S. GAAP measurements in analyzing financial performance. These non-GAAP measurements are not in accordance with any generally accepted accounting principles and may be different from non-GAAP measures used by other companies.

ADJUSTED EARNINGS

Adjusted net earnings for 2010 (a non-GAAP financial measurement) exclude one-time charges of $6.3 million ($0.02 per diluted share) relating to the closure of the Valley Fresh plant and an income tax charge of $7.1 million ($0.03 per diluted share) primarily due to the change in tax treatment of Medicare Part D reimbursements by health care laws enacted in the prior year. The table below shows the calculations to reconcile from adjusted earnings to U.S. GAAP earnings for 2010.

Statements Follow

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Segment Data

Fiscal 2011 Fourth Quarter Segment Operating Results (in Thousands)