EXECUTIVE SUMMARY - FISCAL 2022
Record net sales of
Operating income of
Operating margin of 10.5% compared to 9.9% last year and compared to adjusted operating margin1 of 10.2% last year
Pretax earnings of
Effective tax rate of 21.7% compared to 19.3% last year
Diluted earnings per share of
Cash flow from operations of
EXECUTIVE SUMMARY - FOURTH QUARTER
Net sales of
Operating income of
Operating margin of 11.2% compared to 10.4% last year
Pretax earnings of
Effective tax rate of 21.7% compared to 20.0% last year
Diluted earnings per share of
Cash flow from operations of
EXECUTIVE COMMENTARY
'We achieved all-time record sales and double-digit profit growth in fiscal 2022,' said
'In the fourth quarter, our team delivered diluted earnings per share comparable with record results last year, which included an additional week of sales,' Snee said. 'These results further demonstrate that our brands remain healthy, and the strategic investments we have made are enabling growth. Organic volume and organic net sales growth were led by our center-store grocery portfolio as well as another solid performance from our foodservice businesses. We saw volume and sales2 growth from many retail brands and products in market, including
STRATEGIC EVOLUTION - GoFWD
The company transitioned to three operating segments - Retail, Foodservice and International - and began operating under the new model on
Adopting a new organizational design, management structures and accountabilities;
Continuing the work to fully integrate
Standing up the
'The deliberate and thoughtful steps we have taken thus far are all about creating the
Changes to the company's operating segments have no impact on historical consolidated results of operations, financial position or cash flows. The company will provide recast financial information for fiscal years 2021 and 2022 in
FISCAL 2023 GUIDANCE
'We enter the new fiscal year well-positioned in the retail, foodservice and international channels, and expect to drive top-line growth,' Snee said. 'We believe higher levels of brand investment, increased production capacity and our initial GoFWD actions further support this expectation. We anticipate earnings growth to be driven by our Foodservice and International segments, and improvements across the supply chain.'
'We expect to operate in a volatile, complex and high-cost environment again in fiscal 2023,' Snee said. 'We have benefited from our balanced business model, which is not heavily dependent on any one channel, protein, input or product category. Our long-term strategy to meet consumers where they want to eat, with a broad portfolio of trusted brands and products, will continue to be a key differentiator for our business, helping to drive growth for our customers and operators.'
FISCAL 2023 OUTLOOK* COMPARISON VS FISCAL 2022
Net Sales $12.6 -$12.9 billion +1 - 3%
Diluted Earnings per Share$1.83 -$1.93 +1 - 6%
Effective Tax Rate 21.0 - 23.0% 21.7%
Depreciation and Amortization~$285 million +8%
Capital Expenditures~$350 million +25%
The company's guidance reflects the estimated impact of higher pension expense and higher feed costs for the turkey business.
DIVIDENDS
'Last week, we announced the 57th consecutive yearly increase to our annual dividend to
Effective
CHANNEL HIGHLIGHTS - FISCAL 2022
Net sales growth for the year was driven by the company's
NET SALES PERCENT CHANGE (%) FOURTH QUARTER FISCAL YEAR
U.S. Retail (6) 7
U.S. Foodservice (1) 20
International (10) (7)
Total Net Sales Percent Change (%) (5) 9
SEGMENT HIGHLIGHTS - FOURTH QUARTER
Note: The fourth quarter of fiscal 2022 reflects one fewer week compared to the prior year.
Volume down 19%; organic volume1 down 13%
Net sales down 7%; organic net sales1 comparable to last year
Segment profit down 15%
Products such as Hormel Natural Choice meats,
Grocery Products
Volume down 4%; organic volume1 up 4%
Net sales up 3%; organic net sales1 up 11%
Segment profit down 8%
Net sales increased due to strong demand for SKIPPY peanut butter and the impact of pricing actions across the Mexican and simple-meals portfolios. Organic volume and net sales gains were led by the SPAM, SKIPPY, WHOLLY, Herdez and Dinty Moore brands. Segment profit declined, as pricing actions did not offset the impact from continued inflationary pressures.
Volume down 32%; organic volume1 down 27%
Net sales down 15%; organic net sales1 down 8%
Segment profit up 149%
As anticipated, volume and sales declined as a result of the supply impacts on the company's vertically integrated supply chain from highly pathogenic avian influenza (HPAI). Segment profit growth was primarily due to higher commodity prices and improved value-added mix.
International & Other
Volume comparable to last year; organic volume1 up 8%
Net sales down 2%; organic net sales1 up 6%
Segment profit down 4%
Volume and net sales growth from the SPAM and SKIPPY brands and the multinational businesses were offset by lower fresh pork and refrigerated export sales. Fresh pork sales declined as a result of the company's new pork supply agreement. Segment profit growth in
SELECTED FINANCIAL DETAILS - FISCAL 2022
Income Statement
Operating margin for the full year was 10.5%. This compares to 9.9% and 10.2% on an adjusted basis1 for the previous year. The company continued to be negatively impacted by broad-based inflationary pressures and announced numerous pricing actions throughout the year to combat these pressures.
Selling, general and administrative expenses as a percentage of net sales were 7.1%. This compares to 7.5% and 7.2% on an adjusted basis1 last year. The decline is a result of record net sales and disciplined cost management.
Advertising investments were
The effective tax rate was 21.7% compared to 19.3% last year. Last year's rate included the benefit of one-time state tax discrete items.
Cash Flow Statement
Cash flow from operations was
Dividends paid to shareholders were a record
Capital expenditures were
The company did not repurchase shares during fiscal 2022. The company has the capacity to repurchase approximately 4 million shares under its current authorization.
Depreciation and amortization expense for the full year was
Balance Sheet
The company is in a strong financial position with ample liquidity, a conservative level of debt and consistent cash flows.
Cash on hand increased to
Total long-term debt is
PRESENTATION
A conference call will be webcast at
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