DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 3 Months Ended | |
Jan. 24, 2021 | Feb. 28, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 24, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-2402 | |
Entity Registrant Name | HORMEL FOODS CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 41-0319970 | |
Entity Address, Address Line One | 1 Hormel Place | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55912 | |
City Area Code | 507 | |
Local Phone Number | 437-5611 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | HRL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Smaller Reporting Company | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0000048465 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 540,148,249 | |
Common Stock Non-Voting | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 0 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Jan. 24, 2021 | Oct. 25, 2020 |
Current Assets | ||
Cash and Cash Equivalents | $ 1,751,541 | $ 1,714,309 |
Short-term Marketable Securities | 17,520 | 17,338 |
Accounts Receivable (Net of Allowance for Doubtful Accounts of $4,085 at January 24, 2021, and $4,012 at October 25, 2020) | 706,654 | 702,419 |
Inventories | 1,086,660 | 1,072,762 |
Income Taxes Receivable | 8,997 | 41,449 |
Prepaid Expenses | 21,356 | 18,349 |
Other Current Assets | 8,935 | 12,438 |
Total Current Assets | 3,601,663 | 3,579,063 |
Goodwill | 2,617,589 | 2,612,727 |
Other Intangibles | 1,073,455 | 1,076,285 |
Pension Assets | 189,852 | 183,232 |
Investments In and Receivables From Affiliates | 304,867 | 308,372 |
Other Assets | 272,239 | 250,382 |
Property, Plant and Equipment | ||
Land | 62,561 | 62,543 |
Buildings | 1,256,462 | 1,250,529 |
Equipment | 2,093,204 | 2,084,930 |
Construction in Progress | 389,477 | 369,453 |
Less: Allowance for Depreciation | (1,903,438) | (1,869,233) |
Net Property, Plant and Equipment | 1,898,265 | 1,898,222 |
Total Assets | 9,957,932 | 9,908,282 |
Current Liabilities | ||
Accounts Payable | 558,523 | 644,609 |
Accrued Expenses | 50,901 | 59,136 |
Accrued Workers Compensation | 28,643 | 25,070 |
Accrued Marketing Expenses | 133,042 | 108,502 |
Employee Related Expenses | 204,191 | 252,845 |
Taxes Payable | 45,897 | 22,480 |
Interest and Dividends Payable | 137,583 | 132,632 |
Current Maturities of Long-term Debt | 258,690 | 258,691 |
Total Current Liabilities | 1,417,469 | 1,503,965 |
Long-term Debt - Less Current Maturities | 1,043,050 | 1,044,936 |
Pension and Post-retirement Benefits | 555,220 | 552,878 |
Other Long-term Liabilities | 161,988 | 157,399 |
Deferred Income Taxes | 224,477 | 218,779 |
Shareholders' Investment | ||
Preferred Stock | 0 | 0 |
Additional Paid-in Capital | 298,988 | 289,554 |
Accumulated Other Comprehensive Loss | (360,869) | (395,250) |
Retained Earnings | 6,604,506 | 6,523,335 |
Hormel Foods Corporation Shareholders' Investment | 6,550,532 | 6,425,548 |
Noncontrolling Interest | 5,195 | 4,778 |
Total Shareholders' Investment | 6,555,727 | 6,430,326 |
Total Liabilities and Shareholders' Investment | 9,957,932 | 9,908,282 |
Common Stock Non-Voting | ||
Shareholders' Investment | ||
Common Stock | 0 | 0 |
Common Stock | ||
Shareholders' Investment | ||
Common Stock | $ 7,908 | $ 7,909 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (PARENTHETICAL) - USD ($) $ in Thousands | Jan. 24, 2021 | Oct. 25, 2020 |
Accounts Receivable, Allowance for Doubtful Accounts | $ 4,085 | $ 4,012 |
Preferred Stock, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Authorized Shares (in shares) | 160,000,000 | 160,000,000 |
Preferred Stock, Issued Shares (in shares) | 0 | 0 |
Common Stock, Non-voting | ||
Common Stock, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Authorized Shares (in shares) | 400,000,000 | 400,000,000 |
Common Stock, Issued Shares (in shares) | 0 | 0 |
Common Stock | ||
Common Stock, Par Value (in dollars per share) | $ 0.01465 | |
Common Stock, Authorized Shares (in shares) | 1,600,000,000 | 1,600,000,000 |
Common Stock, Issued Shares (in shares) | 539,796,305 | 539,887,092 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Income Statement [Abstract] | ||
Net Sales | $ 2,461,147 | $ 2,384,434 |
Cost of Products Sold | 2,010,977 | 1,916,014 |
Gross Profit | 450,170 | 468,421 |
Selling, General and Administrative | 196,380 | 195,521 |
Equity in Earnings of Affiliates | 14,228 | 7,588 |
Operating Income | 268,018 | 280,488 |
Other Income and Expense: | ||
Interest and Investment Income (Expense) | 17,291 | 13,251 |
Interest Expense | (8,227) | (3,577) |
Earnings Before Income Taxes | 277,082 | 290,162 |
Provision for Income Taxes | 54,687 | 47,209 |
Net Earnings | 222,395 | 242,953 |
Less: Net Earnings (Loss) Attributable to Noncontrolling Interest | 112 | 81 |
Net Earnings Attributable to Hormel Foods Corporation | $ 222,283 | $ 242,872 |
Net Earnings Per Share | ||
Basic (in dollars per share) | $ 0.41 | $ 0.45 |
Diluted (in dollars per share) | $ 0.41 | $ 0.45 |
Weighted-average Shares Outstanding | ||
Basic (in shares) | 539,913 | 535,075 |
Diluted (in shares) | 547,444 | 544,815 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net Earnings | $ 222,395 | $ 242,953 |
Other Comprehensive Income (Loss), Net of Tax: | ||
Foreign Currency Translation | 17,888 | 7,937 |
Pension and Other Benefits | 4,199 | 3,512 |
Deferred Hedging | 12,599 | (5,103) |
Total Other Comprehensive Income (Loss) | 34,686 | 6,346 |
Comprehensive Income | 257,081 | 249,299 |
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interest | 417 | 205 |
Comprehensive Income Attributable to Hormel Foods Corporation | $ 256,664 | $ 249,094 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | $ 6,430,326 | $ 5,925,535 |
Net Earnings | 222,395 | 242,953 |
Other Comprehensive Income (Loss) | 34,686 | 6,346 |
Purchases of Common Stock | (8,837) | 0 |
Stock-based Compensation Expense | 7,781 | 9,298 |
Exercise of Stock Options/Restricted Shares | 1,765 | 36,353 |
Shares Retired | 0 | 0 |
Declared Cash Dividends | (132,389) | (124,438) |
Ending balance | $ 6,555,727 | $ 6,096,045 |
Common Stock | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance (in shares) | 539,887 | 534,489 |
Beginning balance | $ 7,909 | $ 7,830 |
Stock-based Compensation Expense | ||
Exercise of Stock Options/Restricted Shares (in shares) | 108 | 2,926 |
Exercise of Stock Options/Restricted Shares | $ 2 | $ 43 |
Shares Retired (in shares) | (199) | |
Shares Retired | $ (3) | |
Ending balance (in shares) | 539,796 | 537,415 |
Ending balance | $ 7,908 | $ 7,873 |
Treasury Stock | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance (in shares) | 0 | 0 |
Beginning balance | $ 0 | $ 0 |
Purchases of Common Stock (in shares) | (199) | |
Purchases of Common Stock | $ (8,837) | |
Shares Retired (in shares) | (199) | |
Shares Retired | $ 8,837 | |
Ending balance (in shares) | 0 | 0 |
Ending balance | $ 0 | $ 0 |
Additional Paid-in Capital | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | 289,554 | 184,921 |
Stock-based Compensation Expense | 7,781 | 9,298 |
Exercise of Stock Options/Restricted Shares | 1,763 | 36,310 |
Shares Retired | (110) | |
Ending balance | 298,988 | 230,529 |
Retained Earnings | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | 6,523,335 | 6,128,207 |
Net Earnings | 222,283 | 242,872 |
Shares Retired | (8,724) | |
Declared Cash Dividends | (132,389) | (124,438) |
Ending balance | 6,604,506 | 6,246,641 |
Accumulated Other Comprehensive Income (Loss) | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | (395,250) | (399,500) |
Other Comprehensive Income (Loss) | 34,381 | 6,222 |
Ending balance | (360,869) | (393,278) |
Non- controlling Interest | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | 4,778 | 4,077 |
Net Earnings | 112 | 81 |
Other Comprehensive Income (Loss) | 305 | 124 |
Ending balance | $ 5,195 | $ 4,281 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT (PARENTHETICAL) - $ / shares | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Declared Cash Dividends (in dollars per share) | $ 0.2450 | $ 0.2325 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Operating Activities | ||
Net Earnings | $ 222,395 | $ 242,953 |
Adjustments to Reconcile to Net Cash Provided by Operating Activities: | ||
Depreciation | 41,395 | 41,194 |
Amortization | 9,648 | 8,135 |
Equity in Earnings of Affiliates | (14,228) | (7,588) |
Distributions Received from Equity Method Investees | 11,250 | 10,000 |
Provision for Deferred Income Taxes | 335 | 49 |
Loss (Gain) on Property/Equipment Sales and Plant Facilities | 1,388 | (23) |
Non-cash Investment Activities | (11,693) | (12,761) |
Stock-based Compensation Expense | 7,781 | 9,298 |
Changes in Operating Assets and Liabilities, Net of Acquisitions: | ||
Decrease (Increase) in Accounts Receivable | (3,444) | 11,492 |
Decrease (Increase) in Inventories | (11,876) | (14,915) |
Decrease (Increase) in Prepaid Expenses and Other Current Assets | 17,634 | (5,451) |
Increase (Decrease) in Pension and Post-retirement Benefits | 1,134 | 647 |
Increase (Decrease) in Accounts Payable and Accrued Expenses | (124,092) | (135,988) |
Increase (Decrease) in Net Income Taxes Payable | 58,059 | 41,376 |
Net Cash Provided by (Used in) Operating Activities | 205,686 | 188,418 |
Investing Activities | ||
Net (Purchase) Sale of Securities | (206) | (16) |
Purchases of Property and Equipment | (40,363) | (58,211) |
Proceeds from Sales of Property and Equipment | 1,461 | 1,114 |
Decrease (Increase) in Investments, Equity in Affiliates, and Other Assets | (1,149) | (4,509) |
Proceeds from Company-owned Life Insurance | 956 | 1,118 |
Net Cash Provided by (Used in) Investing Activities | (39,301) | (60,504) |
Financing Activities | ||
Repayments of Long-term Debt and Finance Leases | (2,165) | (2,019) |
Dividends Paid on Common Stock | (125,516) | (112,249) |
Share Repurchase | (8,837) | 0 |
Proceeds from Exercise of Stock Options | 1,765 | 36,353 |
Net Cash Provided by (Used in) Financing Activities | (134,754) | (77,915) |
Effect of Exchange Rate Changes on Cash | 5,600 | 1,519 |
Increase (Decrease) in Cash and Cash Equivalents | 37,232 | 51,518 |
Cash and Cash Equivalents at Beginning of Year | 1,714,309 | 672,901 |
Cash and Cash Equivalents at End of Quarter | $ 1,751,541 | $ 724,419 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jan. 24, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The accompanying unaudited consolidated financial statements of Hormel Foods Corporation (the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year. The Consolidated Statement of Financial Position at October 25, 2020, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 25, 2020. The significant accounting policies used in preparing these Consolidated Financial Statements are consistent with those described in Note A - Summary of Significant Accounting Policies to the Consolidated Financial Statements in the Form 10-K with the exception of new requirements adopted in the first quarter of fiscal 2021. The Company has considered the impact of COVID-19 and determined there have been no material changes in the Company’s Significant Accounting Policies, including estimates and assumptions, as disclosed in its Annual Report on Form 10-K for the fiscal year ended October 25, 2020. Rounding: Certain amounts in the Consolidated Financial Statements and associated notes may not foot due to rounding. All percentages have been calculated using unrounded amounts. Accounting Changes and Recent Accounting Pronouncements: New Accounting Pronouncements Adopted in Current Fiscal Year In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). The update provides guidance on the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The amendment replaces the current incurred loss impairment approach with a methodology to reflect expected credit losses and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The updated guidance is to be applied on a modified retrospective approach and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2021. The adoption did not have a material impact on the Company's consolidated financial statements, thus no cumulative-effect adjustment to retained earnings was necessary. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820) . The updated guidance requires entities to disclose changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Amendments in this guidance also require disclosure of transfers into and out of Level 3 of the fair value hierarchy, purchases and issues of Level 3 assets and liabilities, and clarify that the measurement uncertainty disclosure is as of the reporting date. The guidance removes requirements to disclose the amounts and reasons for transfers between Level 1 and Level 2, policy for timing between of transfers between levels, and the valuation processes for Level 3 fair value measurements. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2021 and adoption did not have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans (Topic 715) . The updated guidance requires additional disclosures of weighted-average interest crediting rates for cash balance plans and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation. Amendments in the guidance also clarify the requirement to disclose the projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets. The same disclosure is needed for the accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets. The guidance removes certain previous disclosure requirements no longer considered cost beneficial. The amendments are effective for fiscal years ending after December 15, 2020, with early adoption permitted. The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2021. The adoption did not impact the Company's interim disclosure and is not anticipated to have a material impact on the annual disclosure. New Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740) . The updated guidance simplifies the accounting for income taxes by removing certain exceptions in Topic 740 and clarifying and |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 3 Months Ended |
Jan. 24, 2021 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Acquisition: On March 2, 2020, the Company acquired the assets comprising the Sadler's Smokehouse business (Sadler's) for a final purchase price of $270.8 million. Sadler's is an authentic, pit-smoked meats business based in Henderson, Texas. This acquisition strengthens the Company's foodservice position and provides an opportunity to further extend the Sadler's product line into the retail and deli channels. The transaction was funded with cash on hand and accounted for as a business combination using the acquisition method. The Company completed an allocation of the fair value of the assets acquired utilizing third-party valuation appraisals during fiscal 2020. Operating results for this acquisition have been included in the Company's Consolidated Statements of Operations from the date of acquisition and are reflected in the Refrigerated Foods segment. Pro forma results are not material for inclusion. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Jan. 24, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill: The changes in the carrying amounts of goodwill for the thirteen weeks ended January 24, 2021, are: (in thousands) Grocery Refrigerated Jennie-O International Total Balance at October 25, 2020 $ 632,301 $ 1,607,005 $ 176,628 $ 196,793 $ 2,612,727 Foreign Currency Translation 4,863 4,863 Balance at January 24, 2021 $ 632,301 $ 1,607,005 $ 176,628 $ 201,656 $ 2,617,589 Intangible Assets: The carrying amounts for indefinite-lived intangible assets are: (in thousands) January 24, 2021 October 25, 2020 Brands/Tradenames/Trademarks $ 953,190 $ 953,190 Other Intangibles 184 184 Foreign Currency Translation (6,203) (6,923) Total $ 947,171 $ 946,452 The gross carrying amount and accumulated amortization for definite-lived intangible assets are: January 24, 2021 October 25, 2020 (in thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer Lists/Relationships $ 117,239 $ (48,303) $ 117,239 $ (45,996) Other Intangibles 60,241 (5,021) 60,631 (4,298) Tradenames/Trademarks 10,536 (4,053) 10,536 (3,518) Foreign Currency Translation — (4,354) — (4,760) Total $ 188,016 $ (61,732) $ 188,406 $ (58,572) Amortization expense was $4.0 million and $2.7 million for the thirteen weeks ended January 24, 2021 and January 26, 2020, respectively. Estimated annual amortization expense for the five fiscal years after October 25, 2020, is: (in thousands) 2021 $ 16,477 2022 16,037 2023 15,132 2024 13,048 2025 11,432 |
INVESTMENTS IN AND RECEIVABLES
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES | 3 Months Ended |
Jan. 24, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES | INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES The Company accounts for its majority-owned operations under the consolidation method. Investments in which the Company owns a minority interest, and for which there are no other indicators of control, are accounted for under the equity or cost method. These investments, along with any related receivables from affiliates, are included in the Consolidated Statements of Financial Position as Investments In and Receivables From Affiliates. Investments In and Receivables From Affiliates consist of: (in thousands) Segment % Owned January 24, 2021 October 25, 2020 MegaMex Foods, LLC Grocery Products 50% $ 214,974 $ 220,907 Other Joint Ventures International & Other Various (20-40%) 89,893 87,466 Total $ 304,867 $ 308,372 Equity in Earnings of Affiliates consists of: Thirteen Weeks Ended (in thousands) Segment January 24, 2021 January 26, 2020 MegaMex Foods, LLC Grocery Products $ 12,433 $ 9,461 Other Joint Ventures International & Other 1,794 (1,873) Total $ 14,228 $ 7,588 For the thirteen weeks ended January 24, 2021, $11.3 million of dividends were received from affiliates, compared to $10.0 million of dividends received for the thirteen weeks ended January 26, 2020. The Company recognized a basis difference of $21.3 million associated with the formation of MegaMex Foods, LLC, of which $11.7 million is remaining as of January 24, 2021. This difference is being amortized through Equity in Earnings of Affiliates. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Jan. 24, 2021 | |
Inventory, Net [Abstract] | |
INVENTORIES | INVENTORIES Principal components of inventories are: (in thousands) January 24, 2021 October 25, 2020 Finished Products $ 543,669 $ 546,070 Raw Materials and Work-in-Process 325,735 318,975 Operating Supplies 143,157 136,547 Maintenance Materials and Parts 74,099 71,170 Total $ 1,086,660 $ 1,072,762 |
DERIVATIVES AND HEDGING
DERIVATIVES AND HEDGING | 3 Months Ended |
Jan. 24, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING | DERIVATIVES AND HEDGING The Company uses hedging programs to manage price risk associated with commodity purchases. These programs utilize futures contracts to manage the Company’s exposure to price fluctuations in the commodities markets. The Company has determined its designated hedging programs to be highly effective in offsetting the changes in fair value or cash flows generated by the items hedged. Effectiveness testing is performed on a quarterly basis to ascertain a high level of effectiveness for cash flow and fair value hedging programs. Cash Flow Hedges: The Company designates corn and lean hog futures and options used to offset price fluctuations in the Company’s future direct grain and hog purchases as cash flow hedges. Effective gains or losses related to these cash flow hedges are reported in Accumulated Other Comprehensive Loss (AOCL) and reclassified into earnings, through Cost of Products Sold, in the period or periods in which the hedged transactions affect earnings. The Company typically does not hedge its grain exposure beyond the next two Fair Value Hedges: The Company designates the futures it uses to minimize the price risk assumed when fixed forward priced contracts are offered to the Company’s commodity suppliers as fair value hedges. The intent of the program is to make the forward priced commodities cost nearly the same as cash market purchases at the date of delivery. Changes in the fair value of the futures contracts, along with the gain or loss on the hedged purchase commitment, are marked-to-market through earnings and recorded on the Consolidated Statements of Financial Position as a Current Asset and Liability, respectively. Effective gains or losses related to these fair value hedges are recognized through Cost of Products Sold in the period or periods in which the hedged transactions affect earnings. Other Derivatives: The Company holds certain futures and options contract positions as part of a merchandising program and to manage the Company’s exposure to fluctuations in commodity markets. The Company has not applied hedge accounting to these positions. Activity related to derivatives not designated as hedges is immaterial to the consolidated financial statements. Volume: The Company's outstanding commodity futures and options contracts related to its hedging programs include: Volume Commodity Contracts January 24, 2021 October 25, 2020 Corn 30.7 million bushels 26.0 million bushels Lean Hogs 140.4 million pounds 153.7 million pounds Fair Value of Derivatives: The fair values of the Company’s derivative instruments are: Gross Fair Value (1) (in thousands) Location on Consolidated Statements of Financial Position January 24, 2021 October 25, 2020 Derivatives Designated as Hedges: Commodity Contracts Other Current Assets $ 9,372 $ (1,330) (1) Amounts represent the gross fair value of derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The amount or timing of cash collateral balances may impact the classification of the derivative in the Consolidated Statements of Financial Position. The gross asset position as of January 24, 2021 is offset by the obligation to return net cash collateral of $2.6 million contained within the master netting arrangement. The gross liability position as of October 25, 2020 is offset by the right to reclaim net cash collateral of $12.3 million. See Note I - Fair Value Measurements for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position. Fair Value Hedge - Assets (Liabilities): The carrying amounts of the Company's fair value hedge assets (liabilities) are: Location on Consolidated Statements of Financial Position Carrying Amount (1) of the Hedged Assets/(Liabilities) (in thousands) January 24, 2021 October 25, 2020 Accounts Payable $ 7,018 $ 4,269 (1) Amounts represent the carrying amount of fair value hedged assets and liabilities which are offset by other assets included in master netting arrangements described above. Accumulated Other Comprehensive Loss Impact: As of January 24, 2021, the Company included in Accumulated Other Comprehensive Loss hedging gains of $19.4 million (before tax) relating to its positions. The Company expects to recognize the majority of these gains over the next twelve months. The effect of Accumulated Other Comprehensive Loss for gains or losses (before tax) related to the Company's derivative instruments is as follows: Gain/(Loss) Recognized in AOCL (1) Location on Consolidated Statements of Operations Gain/(Loss) Reclassified from AOCL into Earnings (1) Thirteen Weeks Ended Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 January 24, 2021 January 26, 2020 Cash Flow Hedges: Commodity Contracts $ 16,552 $ (8,626) Cost of Products Sold $ (50) $ (1,875) (1) See Note H - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. Consolidated Statements of Operations Impact: The effect on the Consolidated Statements of Operations for gains or losses (before tax) related to the Company's derivative instruments is as follows: Cost of Products Sold Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Consolidated Statements of Operations $ 2,010,977 $ 1,916,014 Cash Flow Hedges - Commodity Contracts Gain (Loss) Reclassified from AOCL (50) (1,875) Fair Value Hedges - Commodity Contracts Gain (Loss) on Commodity Futures (1) (2,913) 3,186 Total Gain (Loss) Recognized in Earnings $ (2,963) $ 1,311 (1) Amounts represent gains or losses on commodity contracts designated as fair value hedges that were closed during the thirteen weeks ended January 24, 2021, and January 26, 2020, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis. |
PENSION AND OTHER POST-RETIREME
PENSION AND OTHER POST-RETIREMENT BENEFITS | 3 Months Ended |
Jan. 24, 2021 | |
Retirement Benefits [Abstract] | |
PENSION AND OTHER POST-RETIREMENT BENEFITS | PENSION AND OTHER POST-RETIREMENT BENEFITS Net periodic benefit cost for pension and other post-retirement benefit plans consists of: Pension Benefits Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Service Cost $ 9,107 $ 8,896 Interest Cost 12,362 13,410 Expected Return on Plan Assets (25,189) (25,321) Amortization of Prior Service Cost (367) (542) Recognized Actuarial Loss 5,578 5,596 Net Periodic Cost $ 1,491 $ 2,039 Post-retirement Benefits Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Service Cost $ 131 $ 195 Interest Cost 1,948 2,460 Amortization of Prior Service Cost (164) (663) Recognized Actuarial Loss 496 275 Net Periodic Cost $ 2,411 $ 2,267 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Jan. 24, 2021 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS Components of Accumulated Other Comprehensive Loss are: Thirteen Weeks Ended January 24, 2021 (in thousands) Foreign Pension & Hedging Deferred Gain (Loss) Accumulated Balance at October 25, 2020 $ (64,161) $ (333,178) $ 2,089 $ (395,250) Unrecognized Gains (Losses) Gross 17,583 — 16,552 34,135 Tax Effect — — (3,993) (3,993) Reclassification into Net Earnings Gross — 5,543 (1) 50 (2) 5,593 Tax Effect — (1,343) (10) (1,353) Net of Tax Amount 17,583 4,199 12,599 34,381 Balance at January 24, 2021 $ (46,578) $ (328,979) $ 14,688 $ (360,869) (1) Included in the computation of net periodic cost. See Note G - Pension and Other Post-Retirement Benefits for additional details. (2) Included in Cost of Products Sold in the Consolidated Statements of Operations. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Jan. 24, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Pursuant to the provisions of ASC 820, Fair Value Measurements and Disclosures (ASC 820), the Company measures certain assets and liabilities at fair value or discloses the fair value of certain assets and liabilities recorded at cost in the consolidated financial statements. Fair value is calculated as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). ASC 820 establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of three levels based on the inputs used in the valuation. The Company classifies assets and liabilities in their entirety based on the lowest level of input significant to the fair value measurement. The three levels are defined as follows: Level 1: Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable inputs, other than those included in Level 1, based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets. Level 3: Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances. The Company’s financial assets and liabilities carried at fair value on a recurring basis as of January 24, 2021, and October 25, 2020, and their level within the fair value hierarchy, are: Fair Value Measurements at January 24, 2021 (in thousands) Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets at Fair Value Cash and Cash Equivalents (1) $ 1,751,541 $ 1,750,458 $ 1,083 $ — Short-term Marketable Securities (2) 17,520 5,749 11,771 — Other Trading Securities (3) 192,705 — 192,705 — Commodity Derivatives (4) 6,763 6,763 — — Total Assets at Fair Value $ 1,968,529 $ 1,762,970 $ 205,559 $ — Liabilities at Fair Value Deferred Compensation (3) $ 68,714 $ — $ 68,714 $ — Total Liabilities at Fair Value $ 68,714 $ — $ 68,714 $ — Fair Value Measurements at October 25, 2020 (in thousands) Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets at Fair Value Cash and Cash Equivalents (1) $ 1,714,309 $ 1,713,098 $ 1,211 $ — Short-term Marketable Securities (2) 17,338 5,728 11,610 — Other Trading Securities (3) 173,114 — 173,114 — Commodity Derivatives (4) 10,950 10,950 — — Total Assets at Fair Value $ 1,915,711 $ 1,729,776 $ 185,935 $ — Liabilities at Fair Value Deferred Compensation (3) $ 65,154 $ — $ 65,154 $ — Total Liabilities at Fair Value $ 65,154 $ — $ 65,154 $ — The following methods and assumptions were used to estimate the fair value of the financial assets and liabilities above: (1) The Company’s cash equivalents considered Level 1 consist primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts, and have a maturity date of three months or less. Cash equivalents considered Level 2 are funds holding agency bonds or securities recognized at amortized cost. (2) The Company holds securities as part of a portfolio maintained to generate investment income and to provide cash for operations of the Company, if necessary. The portfolio is managed by a third party who is responsible for daily trading activities, and all assets within the portfolio are highly liquid. The cash, U.S. government securities, and money market funds rated AAA held by the portfolio are classified as Level 1. The current investment portfolio also includes corporate bonds and other asset backed securities for which there is an active, quoted market. Market prices are obtained from a variety of industry providers, large financial institutions, and other third-party sources to calculate a representative daily market value, and therefore, these securities are classified as Level 2. (3) The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred compensation plans. The funds held in the rabbi trust relate to the supplemental executive retirement plans and have been invested primarily in fixed income funds managed by a third party. The declared rate on these funds is set based on a formula using the yield of the general account investment portfolio supporting the fund, adjusted for expenses and other charges. The rate is guaranteed for one year at issue and may be reset annually on the policy anniversary, subject to a guaranteed minimum rate. As the value is based on adjusted market rates and the fixed rate is only reset on an annual basis, these funds are classified as Level 2. Under the deferred compensation plans, participants can defer certain types of compensation and elect to receive a return on the deferred amounts based on the changes in fair value of various investment options These funds are managed by a third-party insurance policy, the values of which represent their cash surrender value based on the fair value of the underlying investments in the account and include equity securities, money market accounts, bond funds or other portfolios for which there is an active quoted market. Therefore, these policies are classified as Level 2. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the I.R.S. applicable federal rates. These balances are also classified as Level 2. The funds held in the rabbi trust are included in Other Assets on the Consolidated Statements of Financial Position. The related deferred compensation liabilities are included in Other Long-term Liabilities on the Consolidated Statements of Financial Position with investment options generally mirroring those funds held by the rabbi trust. Therefore, the investments are classified as Level 2. Securities held by the trust are classified as trading securities. Unrealized gains and losses associated with these investments are included in the Company's earnings. During the thirteen weeks ended January 24, 2021, securities held by the trust generated gains of $11.8 million compared to gains of $5.2 million for the thirteen weeks ended January 26, 2020. (4) The Company’s commodity derivatives represent futures contracts and options used in its hedging or other programs to offset price fluctuations associated with purchases of corn and hogs, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available, and these contracts are classified as Level 1. All derivatives are reviewed for potential credit risk and risk of nonperformance. The net balance for each program is included in Other Current Assets or Accounts Payable, as appropriate, in the Consolidated Statements of Financial Position. As of January 24, 2021, the Company has recognized the obligation to return net cash collateral of $2.6 million from various counterparties (including cash of $11.1 million less $13.7 million of realized loss). As of October 25, 2020, the Company had recognized the right to reclaim net cash collateral of $12.3 million from various counterparties (including cash of $25.5 million less $13.2 million of realized loss). The Company’s financial assets and liabilities include accounts receivable, accounts payable, and other liabilities, for which carrying value approximates fair value. The Company does not carry its long-term debt at fair value in its Consolidated Statements of Financial Position. The fair value of long-term debt, utilizing discounted cash flows (Level 2), was $1,267.7 million as of January 24, 2021, and $1,238.8 million as of October 25, 2020. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 24, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's tax provision is determined using an estimated annual effective tax rate and adjusted for discrete taxable events that may occur during the quarter. The effects of tax legislation are recognized in the period in which the law is enacted. The deferred tax assets and liabilities are remeasured using enacted tax rates expected to apply to taxable income in the years the related temporary differences are anticipated to reverse. The Company's effective tax rate for the thirteen weeks ended January 24, 2021, was 19.7 percent compared to 16.3 percent for the corresponding period a year ago. The amount of unrecognized tax benefits, including interest and penalties, is recorded in Other Long-term Liabilities. If recognized as of January 24, 2021, and January 26, 2020, $28.3 million and $23.3 million, respectively, would impact the Company’s effective tax rate. The Company includes accrued interest and penalties related to uncertain tax positions in income tax expense. Interest and penalties included in income tax expense was immaterial for the thirteen weeks ended January 24, 2021, and January 26, 2020. The amount of accrued interest and penalties at January 24, 2021, and January 26, 2020, associated with unrecognized tax benefits was $7.3 million and $6.5 million, respectively. The Company is regularly audited by federal and state taxing authorities. The United States Internal Revenue Service (I.R.S.) concluded its examination of fiscal 2018 in the fourth quarter of fiscal 2020. The Company has elected to participate in the Compliance Assurance Process (CAP) for fiscal years through 2022. The objective of CAP is to contemporaneously work with the I.R.S. to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time. The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, dating back to 2015. While it is reasonably possible that one or more of these audits may be completed within the next 12 months and the related unrecognized tax benefits may change, based on the status of the examinations it is not possible to reasonably estimate the effect of any amount of such change to previously recorded uncertain tax positions. |
EARNINGS PER SHARE DATA
EARNINGS PER SHARE DATA | 3 Months Ended |
Jan. 24, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE DATA | EARNINGS PER SHARE DATA The reported net earnings attributable to the Company were used when computing basic and diluted earnings per share. The following table sets forth the shares used as the denominator for those computations: Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Basic Weighted-Average Shares Outstanding 539,913 535,075 Dilutive Potential Common Shares 7,531 9,740 Diluted Weighted-Average Shares Outstanding 547,444 544,815 Antidilutive Potential Common Shares 2,194 2,734 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Jan. 24, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company develops, processes, and distributes a wide array of food products in a variety of markets. The Company reports its results in the following four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market, along with the sale of nutritional and private label shelf-stable products to retail, foodservice, and industrial customers. This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture (MegaMex). The Refrigerated Foods segment consists primarily of the processing, marketing, and sale of branded and unbranded pork, beef, and poultry products for retail, foodservice, deli, and commercial customers. The Jennie-O Turkey Store segment consists primarily of the processing, marketing, and sale of branded and unbranded turkey products for retail, foodservice, and commercial customers. The International & Other segment includes Hormel Foods International which manufactures, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures and royalty arrangements. Intersegment sales are recorded at prices that approximate cost and are eliminated in the Consolidated Statements of Operations. The Company does not allocate deferred compensation, investment income, interest expense, or interest income to its segments when measuring performance. The Company also retains various other income and expenses at the corporate level. Equity in Earnings of Affiliates is included in segment profit; however, earnings attributable to the Company’s noncontrolling interests are excluded. These items are included below as Net Unallocated Expense and Noncontrolling Interest when reconciling to Earnings Before Income Taxes. Sales and operating profits for each of the Company’s reportable segments and reconciliation to Earnings Before Income Taxes are set forth below. The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the profit and other financial information shown below. Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Sales to Unaffiliated Customers Grocery Products $ 577,599 $ 540,626 Refrigerated Foods 1,367,077 1,351,790 Jennie-O Turkey Store 333,321 330,128 International & Other 183,150 161,890 Total $ 2,461,147 $ 2,384,434 Intersegment Sales Grocery Products $ — $ 7 Refrigerated Foods 5,957 5,803 Jennie-O Turkey Store 26,692 27,842 International & Other — — Total 32,650 33,652 Intersegment Elimination (32,650) (33,652) Total $ — $ — Net Sales Grocery Products $ 577,599 $ 540,633 Refrigerated Foods 1,373,034 1,357,593 Jennie-O Turkey Store 360,013 357,970 International & Other 183,150 161,890 Intersegment Elimination (32,650) (33,652) Total $ 2,461,147 $ 2,384,434 Segment Profit Grocery Products $ 92,202 $ 68,435 Refrigerated Foods 141,171 167,343 Jennie-O Turkey Store 26,940 38,551 International & Other 32,204 19,952 Total Segment Profit 292,517 294,280 Net Unallocated Expense 15,547 4,199 Noncontrolling Interest 112 81 Earnings Before Income Taxes $ 277,082 $ 290,162 Revenue has been disaggregated into the categories below to show how sales channels affect the nature, amount, timing, and uncertainty of revenue and cash flows. The amount of total revenues contributed by sales channel for the thirteen weeks are: Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 U.S. Retail $ 1,390,628 $ 1,226,430 U.S. Foodservice 586,336 709,106 U.S. Deli 279,259 260,638 International 204,924 188,260 Total $ 2,461,147 $ 2,384,434 The shift in revenues from the U.S. Foodservice to U.S. Retail channel in first quarter of fiscal 2021 was driven by the COVID-19 pandemic and subsequent restrictions. The Company’s products primarily consist of meat and other food products. The amount of total revenues contributed by classes of similar products are: Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Perishable $ 1,376,821 $ 1,400,195 Shelf-stable 523,936 450,704 Poultry 474,651 459,083 Miscellaneous 85,739 74,452 Total $ 2,461,147 $ 2,384,434 Perishable includes fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamole, and bacon (excluding Jennie-O Turkey Store products). Shelf-stable includes canned luncheon meats, nut butters, chilies, shelf-stable microwaveable meals, hash, stews, salsas, tortilla chips, and other items that do not require refrigeration. The Poultry category is composed primarily of Jennie-O Turkey Store products. The Miscellaneous category primarily consists of nutritional food products and supplements, dessert and drink mixes, and industrial gelatin products. The increase in Shelf-stable sales in the first quarter of fiscal 2021 was driven by consumer demand during the COVID-19 pandemic. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Jan. 24, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT On February 10, 2021, subsequent to the end of the first quarter, the Company announced that it has entered into a definitive agreement to acquire the Planters ® snack nuts portfolio from the Kraft Heinz Company. The proposed transaction is expected to close in calendar Q2 2021, subject to regulatory review and approval. The acquisition includes the Planters ® , NUT-rition ® , Planters ® Cheez Balls and Corn Nuts ® brands. The purchase price is $3.35 billion, subject to customary adjustments. The transaction is expected to provide a tax benefit valued at approximately $560 million. Planters ® is an iconic leading snack brand and this acquisition will allow the Company to significantly expand its presence in the growing snacking space. The Planters ® brand will complement the Company’s snacking portfolio and broaden the scope for future acquisitions in this space. The transaction is expected to be funded from the Company’s cash on hand and a combination of long- and short-term debt. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jan. 24, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited consolidated financial statements of Hormel Foods Corporation (the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year. |
Accounting Changes and Recent Accounting Pronouncements | Accounting Changes and Recent Accounting Pronouncements: New Accounting Pronouncements Adopted in Current Fiscal Year In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). The update provides guidance on the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The amendment replaces the current incurred loss impairment approach with a methodology to reflect expected credit losses and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The updated guidance is to be applied on a modified retrospective approach and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2021. The adoption did not have a material impact on the Company's consolidated financial statements, thus no cumulative-effect adjustment to retained earnings was necessary. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820) . The updated guidance requires entities to disclose changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Amendments in this guidance also require disclosure of transfers into and out of Level 3 of the fair value hierarchy, purchases and issues of Level 3 assets and liabilities, and clarify that the measurement uncertainty disclosure is as of the reporting date. The guidance removes requirements to disclose the amounts and reasons for transfers between Level 1 and Level 2, policy for timing between of transfers between levels, and the valuation processes for Level 3 fair value measurements. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2021 and adoption did not have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans (Topic 715) . The updated guidance requires additional disclosures of weighted-average interest crediting rates for cash balance plans and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation. Amendments in the guidance also clarify the requirement to disclose the projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets. The same disclosure is needed for the accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets. The guidance removes certain previous disclosure requirements no longer considered cost beneficial. The amendments are effective for fiscal years ending after December 15, 2020, with early adoption permitted. The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2021. The adoption did not impact the Company's interim disclosure and is not anticipated to have a material impact on the annual disclosure. New Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740) . The updated guidance simplifies the accounting for income taxes by removing certain exceptions in Topic 740 and clarifying and |
Fair Value Measurements | Pursuant to the provisions of ASC 820, Fair Value Measurements and Disclosures (ASC 820), the Company measures certain assets and liabilities at fair value or discloses the fair value of certain assets and liabilities recorded at cost in the consolidated financial statements. Fair value is calculated as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). ASC 820 establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of three levels based on the inputs used in the valuation. The Company classifies assets and liabilities in their entirety based on the lowest level of input significant to the fair value measurement. The three levels are defined as follows: Level 1: Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable inputs, other than those included in Level 1, based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets. Level 3: Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances. |
Segment Reporting | The Company develops, processes, and distributes a wide array of food products in a variety of markets. The Company reports its results in the following four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market, along with the sale of nutritional and private label shelf-stable products to retail, foodservice, and industrial customers. This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture (MegaMex). The Refrigerated Foods segment consists primarily of the processing, marketing, and sale of branded and unbranded pork, beef, and poultry products for retail, foodservice, deli, and commercial customers. The Jennie-O Turkey Store segment consists primarily of the processing, marketing, and sale of branded and unbranded turkey products for retail, foodservice, and commercial customers. The International & Other segment includes Hormel Foods International which manufactures, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures and royalty arrangements. Intersegment sales are recorded at prices that approximate cost and are eliminated in the Consolidated Statements of Operations. The Company does not allocate deferred compensation, investment income, interest expense, or interest income to its segments when measuring performance. The Company also retains various other income and expenses at the corporate level. Equity in Earnings of Affiliates is included in segment profit; however, earnings attributable to the Company’s noncontrolling interests are excluded. These items are included below as Net Unallocated Expense and Noncontrolling Interest when reconciling to Earnings Before Income Taxes. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Jan. 24, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amounts of goodwill for the thirteen weeks ended January 24, 2021, are: (in thousands) Grocery Refrigerated Jennie-O International Total Balance at October 25, 2020 $ 632,301 $ 1,607,005 $ 176,628 $ 196,793 $ 2,612,727 Foreign Currency Translation 4,863 4,863 Balance at January 24, 2021 $ 632,301 $ 1,607,005 $ 176,628 $ 201,656 $ 2,617,589 |
Schedule of carrying amounts for indefinite-lived intangible assets | The carrying amounts for indefinite-lived intangible assets are: (in thousands) January 24, 2021 October 25, 2020 Brands/Tradenames/Trademarks $ 953,190 $ 953,190 Other Intangibles 184 184 Foreign Currency Translation (6,203) (6,923) Total $ 947,171 $ 946,452 |
Schedule of gross carrying amount and accumulated amortization for definite-lived intangible assets | The gross carrying amount and accumulated amortization for definite-lived intangible assets are: January 24, 2021 October 25, 2020 (in thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer Lists/Relationships $ 117,239 $ (48,303) $ 117,239 $ (45,996) Other Intangibles 60,241 (5,021) 60,631 (4,298) Tradenames/Trademarks 10,536 (4,053) 10,536 (3,518) Foreign Currency Translation — (4,354) — (4,760) Total $ 188,016 $ (61,732) $ 188,406 $ (58,572) |
Schedule of estimated annual amortization expense | Estimated annual amortization expense for the five fiscal years after October 25, 2020, is: (in thousands) 2021 $ 16,477 2022 16,037 2023 15,132 2024 13,048 2025 11,432 |
INVESTMENTS IN AND RECEIVABLE_2
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES (Tables) | 3 Months Ended |
Jan. 24, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of investments in, receivables from, and equity in earnings of affiliates | Investments In and Receivables From Affiliates consist of: (in thousands) Segment % Owned January 24, 2021 October 25, 2020 MegaMex Foods, LLC Grocery Products 50% $ 214,974 $ 220,907 Other Joint Ventures International & Other Various (20-40%) 89,893 87,466 Total $ 304,867 $ 308,372 |
Schedule of equity in earnings of affiliates | Equity in Earnings of Affiliates consists of: Thirteen Weeks Ended (in thousands) Segment January 24, 2021 January 26, 2020 MegaMex Foods, LLC Grocery Products $ 12,433 $ 9,461 Other Joint Ventures International & Other 1,794 (1,873) Total $ 14,228 $ 7,588 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Jan. 24, 2021 | |
Inventory, Net [Abstract] | |
Principal components of inventories | Principal components of inventories are: (in thousands) January 24, 2021 October 25, 2020 Finished Products $ 543,669 $ 546,070 Raw Materials and Work-in-Process 325,735 318,975 Operating Supplies 143,157 136,547 Maintenance Materials and Parts 74,099 71,170 Total $ 1,086,660 $ 1,072,762 |
DERIVATIVES AND HEDGING (Tables
DERIVATIVES AND HEDGING (Tables) | 3 Months Ended |
Jan. 24, 2021 | |
Derivative [Line Items] | |
Schedule of fair values of derivative instruments | The fair values of the Company’s derivative instruments are: Gross Fair Value (1) (in thousands) Location on Consolidated Statements of Financial Position January 24, 2021 October 25, 2020 Derivatives Designated as Hedges: Commodity Contracts Other Current Assets $ 9,372 $ (1,330) (1) Amounts represent the gross fair value of derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The amount or timing of cash collateral balances may impact the classification of the derivative in the Consolidated Statements of Financial Position. The gross asset position as of January 24, 2021 is offset by the obligation to return net cash collateral of $2.6 million contained within the master netting arrangement. The gross liability position as of October 25, 2020 is offset by the right to reclaim net cash collateral of $12.3 million. See Note I - Fair Value Measurements for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position. |
Schedule of fair value hedge assets (liabilities) | The carrying amounts of the Company's fair value hedge assets (liabilities) are: Location on Consolidated Statements of Financial Position Carrying Amount (1) of the Hedged Assets/(Liabilities) (in thousands) January 24, 2021 October 25, 2020 Accounts Payable $ 7,018 $ 4,269 (1) Amounts represent the carrying amount of fair value hedged assets and liabilities which are offset by other assets included in master netting arrangements described above. |
Schedule of gains or losses (before tax) related to derivative instruments | The effect of Accumulated Other Comprehensive Loss for gains or losses (before tax) related to the Company's derivative instruments is as follows: Gain/(Loss) Recognized in AOCL (1) Location on Consolidated Statements of Operations Gain/(Loss) Reclassified from AOCL into Earnings (1) Thirteen Weeks Ended Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 January 24, 2021 January 26, 2020 Cash Flow Hedges: Commodity Contracts $ 16,552 $ (8,626) Cost of Products Sold $ (50) $ (1,875) (1) See Note H - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. Consolidated Statements of Operations Impact: The effect on the Consolidated Statements of Operations for gains or losses (before tax) related to the Company's derivative instruments is as follows: Cost of Products Sold Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Consolidated Statements of Operations $ 2,010,977 $ 1,916,014 Cash Flow Hedges - Commodity Contracts Gain (Loss) Reclassified from AOCL (50) (1,875) Fair Value Hedges - Commodity Contracts Gain (Loss) on Commodity Futures (1) (2,913) 3,186 Total Gain (Loss) Recognized in Earnings $ (2,963) $ 1,311 (1) Amounts represent gains or losses on commodity contracts designated as fair value hedges that were closed during the thirteen weeks ended January 24, 2021, and January 26, 2020, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis. |
Cash Flow Hedges | |
Derivative [Line Items] | |
Schedule of outstanding commodity futures contracts | The Company's outstanding commodity futures and options contracts related to its hedging programs include: Volume Commodity Contracts January 24, 2021 October 25, 2020 Corn 30.7 million bushels 26.0 million bushels Lean Hogs 140.4 million pounds 153.7 million pounds |
PENSION AND OTHER POST-RETIRE_2
PENSION AND OTHER POST-RETIREMENT BENEFITS (Tables) | 3 Months Ended |
Jan. 24, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic cost of defined benefit plans | Net periodic benefit cost for pension and other post-retirement benefit plans consists of: Pension Benefits Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Service Cost $ 9,107 $ 8,896 Interest Cost 12,362 13,410 Expected Return on Plan Assets (25,189) (25,321) Amortization of Prior Service Cost (367) (542) Recognized Actuarial Loss 5,578 5,596 Net Periodic Cost $ 1,491 $ 2,039 Post-retirement Benefits Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Service Cost $ 131 $ 195 Interest Cost 1,948 2,460 Amortization of Prior Service Cost (164) (663) Recognized Actuarial Loss 496 275 Net Periodic Cost $ 2,411 $ 2,267 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Jan. 24, 2021 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of components of accumulated other comprehensive loss | Components of Accumulated Other Comprehensive Loss are: Thirteen Weeks Ended January 24, 2021 (in thousands) Foreign Pension & Hedging Deferred Gain (Loss) Accumulated Balance at October 25, 2020 $ (64,161) $ (333,178) $ 2,089 $ (395,250) Unrecognized Gains (Losses) Gross 17,583 — 16,552 34,135 Tax Effect — — (3,993) (3,993) Reclassification into Net Earnings Gross — 5,543 (1) 50 (2) 5,593 Tax Effect — (1,343) (10) (1,353) Net of Tax Amount 17,583 4,199 12,599 34,381 Balance at January 24, 2021 $ (46,578) $ (328,979) $ 14,688 $ (360,869) (1) Included in the computation of net periodic cost. See Note G - Pension and Other Post-Retirement Benefits for additional details. (2) Included in Cost of Products Sold in the Consolidated Statements of Operations. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Jan. 24, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | The Company’s financial assets and liabilities carried at fair value on a recurring basis as of January 24, 2021, and October 25, 2020, and their level within the fair value hierarchy, are: Fair Value Measurements at January 24, 2021 (in thousands) Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets at Fair Value Cash and Cash Equivalents (1) $ 1,751,541 $ 1,750,458 $ 1,083 $ — Short-term Marketable Securities (2) 17,520 5,749 11,771 — Other Trading Securities (3) 192,705 — 192,705 — Commodity Derivatives (4) 6,763 6,763 — — Total Assets at Fair Value $ 1,968,529 $ 1,762,970 $ 205,559 $ — Liabilities at Fair Value Deferred Compensation (3) $ 68,714 $ — $ 68,714 $ — Total Liabilities at Fair Value $ 68,714 $ — $ 68,714 $ — Fair Value Measurements at October 25, 2020 (in thousands) Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets at Fair Value Cash and Cash Equivalents (1) $ 1,714,309 $ 1,713,098 $ 1,211 $ — Short-term Marketable Securities (2) 17,338 5,728 11,610 — Other Trading Securities (3) 173,114 — 173,114 — Commodity Derivatives (4) 10,950 10,950 — — Total Assets at Fair Value $ 1,915,711 $ 1,729,776 $ 185,935 $ — Liabilities at Fair Value Deferred Compensation (3) $ 65,154 $ — $ 65,154 $ — Total Liabilities at Fair Value $ 65,154 $ — $ 65,154 $ — The following methods and assumptions were used to estimate the fair value of the financial assets and liabilities above: (1) The Company’s cash equivalents considered Level 1 consist primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts, and have a maturity date of three months or less. Cash equivalents considered Level 2 are funds holding agency bonds or securities recognized at amortized cost. (2) The Company holds securities as part of a portfolio maintained to generate investment income and to provide cash for operations of the Company, if necessary. The portfolio is managed by a third party who is responsible for daily trading activities, and all assets within the portfolio are highly liquid. The cash, U.S. government securities, and money market funds rated AAA held by the portfolio are classified as Level 1. The current investment portfolio also includes corporate bonds and other asset backed securities for which there is an active, quoted market. Market prices are obtained from a variety of industry providers, large financial institutions, and other third-party sources to calculate a representative daily market value, and therefore, these securities are classified as Level 2. (3) The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred compensation plans. The funds held in the rabbi trust relate to the supplemental executive retirement plans and have been invested primarily in fixed income funds managed by a third party. The declared rate on these funds is set based on a formula using the yield of the general account investment portfolio supporting the fund, adjusted for expenses and other charges. The rate is guaranteed for one year at issue and may be reset annually on the policy anniversary, subject to a guaranteed minimum rate. As the value is based on adjusted market rates and the fixed rate is only reset on an annual basis, these funds are classified as Level 2. Under the deferred compensation plans, participants can defer certain types of compensation and elect to receive a return on the deferred amounts based on the changes in fair value of various investment options These funds are managed by a third-party insurance policy, the values of which represent their cash surrender value based on the fair value of the underlying investments in the account and include equity securities, money market accounts, bond funds or other portfolios for which there is an active quoted market. Therefore, these policies are classified as Level 2. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the I.R.S. applicable federal rates. These balances are also classified as Level 2. The funds held in the rabbi trust are included in Other Assets on the Consolidated Statements of Financial Position. The related deferred compensation liabilities are included in Other Long-term Liabilities on the Consolidated Statements of Financial Position with investment options generally mirroring those funds held by the rabbi trust. Therefore, the investments are classified as Level 2. Securities held by the trust are classified as trading securities. Unrealized gains and losses associated with these investments are included in the Company's earnings. During the thirteen weeks ended January 24, 2021, securities held by the trust generated gains of $11.8 million compared to gains of $5.2 million for the thirteen weeks ended January 26, 2020. (4) The Company’s commodity derivatives represent futures contracts and options used in its hedging or other programs to offset price fluctuations associated with purchases of corn and hogs, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available, and these contracts are classified as Level 1. All derivatives are reviewed for potential credit risk and risk of nonperformance. The net balance for each program is included in Other Current Assets or Accounts Payable, as appropriate, in the Consolidated Statements of Financial Position. As of January 24, 2021, the Company has recognized the obligation to return net cash collateral of $2.6 million from various counterparties (including cash of $11.1 million less $13.7 million of realized loss). As of October 25, 2020, the Company had recognized the right to reclaim net cash collateral of $12.3 million from various counterparties (including cash of $25.5 million less $13.2 million of realized loss). |
EARNINGS PER SHARE DATA (Tables
EARNINGS PER SHARE DATA (Tables) | 3 Months Ended |
Jan. 24, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of denominator for the computation of basic and diluted earnings per share | The following table sets forth the shares used as the denominator for those computations: Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Basic Weighted-Average Shares Outstanding 539,913 535,075 Dilutive Potential Common Shares 7,531 9,740 Diluted Weighted-Average Shares Outstanding 547,444 544,815 Antidilutive Potential Common Shares 2,194 2,734 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Jan. 24, 2021 | |
Segment Reporting [Abstract] | |
Schedule of sales and operating profits for each of the reportable segments and reconciliation to earnings before income taxes | Sales and operating profits for each of the Company’s reportable segments and reconciliation to Earnings Before Income Taxes are set forth below. The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the profit and other financial information shown below. Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Sales to Unaffiliated Customers Grocery Products $ 577,599 $ 540,626 Refrigerated Foods 1,367,077 1,351,790 Jennie-O Turkey Store 333,321 330,128 International & Other 183,150 161,890 Total $ 2,461,147 $ 2,384,434 Intersegment Sales Grocery Products $ — $ 7 Refrigerated Foods 5,957 5,803 Jennie-O Turkey Store 26,692 27,842 International & Other — — Total 32,650 33,652 Intersegment Elimination (32,650) (33,652) Total $ — $ — Net Sales Grocery Products $ 577,599 $ 540,633 Refrigerated Foods 1,373,034 1,357,593 Jennie-O Turkey Store 360,013 357,970 International & Other 183,150 161,890 Intersegment Elimination (32,650) (33,652) Total $ 2,461,147 $ 2,384,434 Segment Profit Grocery Products $ 92,202 $ 68,435 Refrigerated Foods 141,171 167,343 Jennie-O Turkey Store 26,940 38,551 International & Other 32,204 19,952 Total Segment Profit 292,517 294,280 Net Unallocated Expense 15,547 4,199 Noncontrolling Interest 112 81 Earnings Before Income Taxes $ 277,082 $ 290,162 |
Schedule of total revenues contributed by sales channels and classes of similar products | The amount of total revenues contributed by sales channel for the thirteen weeks are: Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 U.S. Retail $ 1,390,628 $ 1,226,430 U.S. Foodservice 586,336 709,106 U.S. Deli 279,259 260,638 International 204,924 188,260 Total $ 2,461,147 $ 2,384,434 Thirteen Weeks Ended (in thousands) January 24, 2021 January 26, 2020 Perishable $ 1,376,821 $ 1,400,195 Shelf-stable 523,936 450,704 Poultry 474,651 459,083 Miscellaneous 85,739 74,452 Total $ 2,461,147 $ 2,384,434 |
ACQUISITIONS AND DIVESTITURES -
ACQUISITIONS AND DIVESTITURES - Narrative (Details) $ in Millions | Mar. 02, 2020USD ($) |
Sadler's Smokehouse | |
ACQUISITIONS | |
Final purchase price | $ 270.8 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill Rollforward (Details) $ in Thousands | 3 Months Ended |
Jan. 24, 2021USD ($) | |
Changes in the carrying amount of goodwill | |
Balance at the beginning of the period | $ 2,612,727 |
Foreign Currency Translation | 4,863 |
Balance at the end of the period | 2,617,589 |
Grocery Products | |
Changes in the carrying amount of goodwill | |
Balance at the beginning of the period | 632,301 |
Foreign Currency Translation | |
Balance at the end of the period | 632,301 |
Refrigerated Foods | |
Changes in the carrying amount of goodwill | |
Balance at the beginning of the period | 1,607,005 |
Foreign Currency Translation | |
Balance at the end of the period | 1,607,005 |
Jennie-O Turkey Store | |
Changes in the carrying amount of goodwill | |
Balance at the beginning of the period | 176,628 |
Foreign Currency Translation | |
Balance at the end of the period | 176,628 |
International & Other | |
Changes in the carrying amount of goodwill | |
Balance at the beginning of the period | 196,793 |
Foreign Currency Translation | 4,863 |
Balance at the end of the period | $ 201,656 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jan. 24, 2021 | Oct. 25, 2020 |
Carrying amounts for indefinite-lived intangible assets | ||
Total | $ 947,171 | $ 946,452 |
Brands/Tradenames/Trademarks | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | 953,190 | 953,190 |
Other Intangibles | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | 184 | 184 |
Foreign Currency Translation | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | $ 6,203 | $ 6,923 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Definite Lived Intangibles Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 24, 2021 | Jan. 26, 2020 | Oct. 25, 2020 | |
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Gross Carrying Amount | $ 188,016 | $ 188,406 | |
Accumulated Amortization | (61,732) | (58,572) | |
Amortization expense | 4,000 | $ 2,700 | |
Estimated amortization expense | |||
2021 | 16,477 | ||
2022 | 16,037 | ||
2023 | 15,132 | ||
2024 | 13,048 | ||
2025 | 11,432 | ||
Customer Lists/Relationships | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Gross Carrying Amount | 117,239 | 117,239 | |
Accumulated Amortization | (48,303) | (45,996) | |
Other Intangibles | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Gross Carrying Amount | 60,241 | 60,631 | |
Accumulated Amortization | (5,021) | (4,298) | |
Tradenames/Trademarks | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Gross Carrying Amount | 10,536 | 10,536 | |
Accumulated Amortization | (4,053) | (3,518) | |
Foreign Currency Translation | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Gross Carrying Amount | 0 | 0 | |
Accumulated Amortization | $ (4,354) | $ (4,760) |
INVESTMENTS IN AND RECEIVABLE_3
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES - Schedule of Investments and Equity Information (Details) - USD ($) $ in Thousands | Jan. 24, 2021 | Oct. 25, 2020 |
Investments In and Receivables from Affiliates | ||
Total | $ 304,867 | $ 308,372 |
Minimum | ||
Investments In and Receivables from Affiliates | ||
% Owned | 20.00% | |
Maximum | ||
Investments In and Receivables from Affiliates | ||
% Owned | 40.00% | |
MegaMex Foods, LLC | ||
Investments In and Receivables from Affiliates | ||
% Owned | 50.00% | |
Total | $ 214,974 | 220,907 |
Other Joint Ventures | ||
Investments In and Receivables from Affiliates | ||
Total | $ 89,893 | $ 87,466 |
INVESTMENTS IN AND RECEIVABLE_4
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES - Schedule of Equity in Earnings of Affiliates (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Investments In and Receivables from Affiliates | ||
Total | $ 14,228 | $ 7,588 |
MegaMex Foods, LLC | ||
Investments In and Receivables from Affiliates | ||
Total | 12,433 | 9,461 |
Other Joint Ventures | ||
Investments In and Receivables from Affiliates | ||
Total | $ 1,794 | $ (1,873) |
INVESTMENTS IN AND RECEIVABLE_5
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 24, 2021 | Jan. 26, 2020 | Oct. 26, 2009 | |
Schedule of Equity Method Investments [Line Items] | |||
Dividends received from affiliates | $ 11.3 | $ 10 | |
MegaMex Foods, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Excess of investment over the underlying equity in net assets of the joint venture | $ 11.7 | $ 21.3 |
INVENTORIES - Components of Inv
INVENTORIES - Components of Inventories (Details) - USD ($) $ in Thousands | Jan. 24, 2021 | Oct. 25, 2020 |
Inventory, Net [Abstract] | ||
Finished Products | $ 543,669 | $ 546,070 |
Raw Materials and Work-in-Process | 325,735 | 318,975 |
Operating Supplies | 143,157 | 136,547 |
Maintenance Materials and Parts | 74,099 | 71,170 |
Total | $ 1,086,660 | $ 1,072,762 |
DERIVATIVES AND HEDGING - Narra
DERIVATIVES AND HEDGING - Narrative (Details) $ in Millions | 3 Months Ended |
Jan. 24, 2021USD ($) | |
Derivative [Line Items] | |
Hedging gains to be recognized within next twelve months | $ 19.4 |
Corn | |
Derivative [Line Items] | |
Maximum length of time to hedge exposure | 2 years |
Lean Hogs | |
Derivative [Line Items] | |
Maximum length of time to hedge exposure | 12 months |
DERIVATIVES AND HEDGING - Outst
DERIVATIVES AND HEDGING - Outstanding Contracts (Details) - Cash Flow Hedges lb in Millions, bu in Millions | 3 Months Ended | 12 Months Ended |
Jan. 24, 2021lbbu | Oct. 25, 2020lbbu | |
Corn | ||
Derivative [Line Items] | ||
Futures contracts, volume (in million bushels) | bu | 30.7 | 26 |
Lean Hogs | ||
Derivative [Line Items] | ||
Futures contracts, volume (in million pounds) | lb | 140.4 | 153.7 |
DERIVATIVES AND HEDGING - Fair
DERIVATIVES AND HEDGING - Fair Value of Derivatives (Details) - USD ($) $ in Thousands | Jan. 24, 2021 | Oct. 25, 2020 |
Derivatives fair value | ||
Cash owed, within master netting arrangement | $ 2,600 | |
Cash collateral, within master netting arrangement | $ 12,300 | |
Derivatives designated as hedges | Commodity Contracts | Other Current Assets | ||
Derivatives fair value | ||
Fair values of derivative instruments | $ 9,372 | $ (1,330) |
DERIVATIVES AND HEDGING - Fai_2
DERIVATIVES AND HEDGING - Fair Value Hedge Liabilities (Details) - USD ($) $ in Thousands | Jan. 24, 2021 | Oct. 25, 2020 |
Accounts Payable | ||
Derivatives fair value | ||
Carrying Amount of the Hedged Assets/(Liabilities) | $ 7,018 | $ 4,269 |
DERIVATIVES AND HEDGING - Gains
DERIVATIVES AND HEDGING - Gains and Losses (Details) - Cash Flow Hedges - Derivatives designated as hedges - Commodity Contracts - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Recognized in AOCL | $ 16,552 | $ (8,626) |
Gain/(Loss) Reclassified from AOCL into Earnings | (50) | (1,875) |
Cost of Products Sold | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Reclassified from AOCL into Earnings | $ (50) | $ (1,875) |
DERIVATIVES AND HEDGING - State
DERIVATIVES AND HEDGING - Statements of Operations Effect of Gains or Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Derivative [Line Items] | ||
Consolidated Statements of Operations | $ 2,010,977 | $ 1,916,014 |
Fair Value Hedges - Commodity Contracts | ||
Total Gain (Loss) Recognized in Earnings | (2,963) | 1,311 |
Derivatives designated as hedges | Cash Flow Hedges | Commodity Contracts | ||
Cash Flow Hedges - Commodity Contracts | ||
Gain (Loss) Reclassified from AOCL | (50) | (1,875) |
Derivatives designated as hedges | Fair Value Hedges | Commodity Contracts | ||
Fair Value Hedges - Commodity Contracts | ||
Gain (loss) on commodity futures | $ (2,913) | $ 3,186 |
PENSION AND OTHER POST-RETIRE_3
PENSION AND OTHER POST-RETIREMENT BENEFITS - Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Pension Benefits | ||
Net periodic cost of defined benefit plans | ||
Service Cost | $ 9,107 | $ 8,896 |
Interest Cost | 12,362 | 13,410 |
Expected Return on Plan Assets | (25,189) | (25,321) |
Amortization of Prior Service Cost | (367) | (542) |
Recognized Actuarial Loss | 5,578 | 5,596 |
Net Periodic Cost | 1,491 | 2,039 |
Post-retirement Benefits | ||
Net periodic cost of defined benefit plans | ||
Service Cost | 131 | 195 |
Interest Cost | 1,948 | 2,460 |
Amortization of Prior Service Cost | (164) | (663) |
Recognized Actuarial Loss | 496 | 275 |
Net Periodic Cost | $ 2,411 | $ 2,267 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Components of AOCL (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | $ 6,430,326 | $ 5,925,535 |
Reclassification into Net Earnings | ||
Total Other Comprehensive Income (Loss) | 34,686 | 6,346 |
Ending balance | 6,555,727 | 6,096,045 |
Accumulated Other Comprehensive Loss | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (395,250) | (399,500) |
Unrecognized Gains (Losses) | ||
Gross | 34,135 | |
Tax Effect | (3,993) | |
Reclassification into Net Earnings | ||
Gross | 5,593 | |
Tax Effect | (1,353) | |
Total Other Comprehensive Income (Loss) | 34,381 | 6,222 |
Ending balance | (360,869) | $ (393,278) |
Foreign Currency Translation | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (64,161) | |
Unrecognized Gains (Losses) | ||
Gross | 17,583 | |
Tax Effect | 0 | |
Reclassification into Net Earnings | ||
Gross | 0 | |
Tax Effect | 0 | |
Total Other Comprehensive Income (Loss) | 17,583 | |
Ending balance | (46,578) | |
Pension & Other Benefits | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (333,178) | |
Unrecognized Gains (Losses) | ||
Gross | 0 | |
Tax Effect | 0 | |
Reclassification into Net Earnings | ||
Gross | 5,543 | |
Tax Effect | (1,343) | |
Total Other Comprehensive Income (Loss) | 4,199 | |
Ending balance | (328,979) | |
Hedging Deferred Gain (Loss) | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | 2,089 | |
Unrecognized Gains (Losses) | ||
Gross | 16,552 | |
Tax Effect | (3,993) | |
Reclassification into Net Earnings | ||
Gross | 50 | |
Tax Effect | (10) | |
Total Other Comprehensive Income (Loss) | 12,599 | |
Ending balance | $ 14,688 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 24, 2021 | Jan. 26, 2020 | Oct. 25, 2020 | |
Right To Reclaim Net Cash Collateral, Commodity Derivatives [Abstract] | |||
Obligation to return net cash collateral | $ 2,600 | ||
Obligation to return net cash collateral, cash portion | 11,100 | ||
Recognized right to reclaim net cash collateral | $ 12,300 | ||
Right to reclaim cash, cash portion | 25,500 | ||
Realized losses on closed positions | 13,700 | 13,200 | |
Rabbi trust | |||
Right To Reclaim Net Cash Collateral, Commodity Derivatives [Abstract] | |||
Gain related to securities held by the trust | 11,800 | $ 5,200 | |
Recurring basis | |||
Assets at Fair Value | |||
Cash and Cash Equivalents | 1,751,541 | 1,714,309 | |
Short-term Marketable Securities | 17,520 | 17,338 | |
Other Trading Securities | 192,705 | 173,114 | |
Total Assets at Fair Value | 1,968,529 | 1,915,711 | |
Liabilities at Fair Value | |||
Deferred Compensation | 68,714 | 65,154 | |
Total Liabilities at Fair Value | 68,714 | 65,154 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Assets at Fair Value | |||
Cash and Cash Equivalents | 1,750,458 | 1,713,098 | |
Short-term Marketable Securities | 5,749 | 5,728 | |
Other Trading Securities | 0 | 0 | |
Total Assets at Fair Value | 1,762,970 | 1,729,776 | |
Liabilities at Fair Value | |||
Deferred Compensation | 0 | 0 | |
Total Liabilities at Fair Value | 0 | 0 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | |||
Assets at Fair Value | |||
Cash and Cash Equivalents | 1,083 | 1,211 | |
Short-term Marketable Securities | 11,771 | 11,610 | |
Other Trading Securities | 192,705 | 173,114 | |
Total Assets at Fair Value | 205,559 | 185,935 | |
Liabilities at Fair Value | |||
Deferred Compensation | 68,714 | 65,154 | |
Total Liabilities at Fair Value | 68,714 | 65,154 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | |||
Assets at Fair Value | |||
Cash and Cash Equivalents | 0 | 0 | |
Short-term Marketable Securities | 0 | 0 | |
Other Trading Securities | 0 | 0 | |
Total Assets at Fair Value | 0 | 0 | |
Liabilities at Fair Value | |||
Deferred Compensation | 0 | 0 | |
Total Liabilities at Fair Value | 0 | 0 | |
Recurring basis | Commodity Contracts | |||
Assets at Fair Value | |||
Commodity Derivatives | 6,763 | 10,950 | |
Recurring basis | Commodity Contracts | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Assets at Fair Value | |||
Commodity Derivatives | 6,763 | 10,950 | |
Recurring basis | Commodity Contracts | Significant Other Observable Inputs (Level 2) | |||
Assets at Fair Value | |||
Commodity Derivatives | 0 | 0 | |
Recurring basis | Commodity Contracts | Significant Unobservable Inputs (Level 3) | |||
Assets at Fair Value | |||
Commodity Derivatives | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | Jan. 24, 2021 | Oct. 25, 2020 |
Fair Value Disclosures [Abstract] | ||
Fair value of long-term debt, utilizing discounted cash flows (Level 2) | $ 1,267.7 | $ 1,238.8 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 19.70% | 16.30% |
Unrecognized tax benefits that would impact effective tax rate | $ 28.3 | $ 23.3 |
Accrued interest and penalties associated with unrecognized tax benefits | $ 7.3 | $ 6.5 |
EARNINGS PER SHARE DATA - Share
EARNINGS PER SHARE DATA - Shares Used as Denominator and Narrative (Details) - shares shares in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Earnings Per Share [Abstract] | ||
Basic Weighted-Average Shares Outstanding (in shares) | 539,913 | 535,075 |
Dilutive Potential Common Shares (in shares) | 7,531 | 9,740 |
Diluted Weighted-Average Shares Outstanding (in shares) | 547,444 | 544,815 |
Antidilutive Potential Common Shares (in shares) | 2,194 | 2,734 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 3 Months Ended |
Jan. 24, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable business segments | 4 |
SEGMENT REPORTING - Operating P
SEGMENT REPORTING - Operating Profit (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Operating profit and other financial information | ||
Net Sales | $ 2,461,147 | $ 2,384,434 |
Segment Profit | 268,018 | 280,488 |
Net Unallocated Expense | 15,547 | 4,199 |
Noncontrolling Interest | 112 | 81 |
Earnings Before Income Taxes | 277,082 | 290,162 |
Intersegment Elimination | ||
Operating profit and other financial information | ||
Net Sales | 32,650 | 33,652 |
Operating Segments | ||
Operating profit and other financial information | ||
Segment Profit | 292,517 | 294,280 |
Grocery Products | ||
Operating profit and other financial information | ||
Net Sales | 577,599 | 540,626 |
Grocery Products | Intersegment Elimination | ||
Operating profit and other financial information | ||
Net Sales | 0 | 7 |
Grocery Products | Operating Segments | ||
Operating profit and other financial information | ||
Net Sales | 577,599 | 540,633 |
Segment Profit | 92,202 | 68,435 |
Refrigerated Foods | ||
Operating profit and other financial information | ||
Net Sales | 1,367,077 | 1,351,790 |
Refrigerated Foods | Intersegment Elimination | ||
Operating profit and other financial information | ||
Net Sales | 5,957 | 5,803 |
Refrigerated Foods | Operating Segments | ||
Operating profit and other financial information | ||
Net Sales | 1,373,034 | 1,357,593 |
Segment Profit | 141,171 | 167,343 |
Jennie-O Turkey Store | ||
Operating profit and other financial information | ||
Net Sales | 333,321 | 330,128 |
Jennie-O Turkey Store | Intersegment Elimination | ||
Operating profit and other financial information | ||
Net Sales | 26,692 | 27,842 |
Jennie-O Turkey Store | Operating Segments | ||
Operating profit and other financial information | ||
Net Sales | 360,013 | 357,970 |
Segment Profit | 26,940 | 38,551 |
International & Other | ||
Operating profit and other financial information | ||
Net Sales | 183,150 | 161,890 |
International & Other | Intersegment Elimination | ||
Operating profit and other financial information | ||
Net Sales | 0 | 0 |
International & Other | Operating Segments | ||
Operating profit and other financial information | ||
Net Sales | 183,150 | 161,890 |
Segment Profit | $ 32,204 | $ 19,952 |
SEGMENT REPORTING - Disaggregat
SEGMENT REPORTING - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 24, 2021 | Jan. 26, 2020 | |
Revenue from External Customer [Line Items] | ||
Total | $ 2,461,147 | $ 2,384,434 |
Perishable | ||
Revenue from External Customer [Line Items] | ||
Total | 1,376,821 | 1,400,195 |
Shelf-stable | ||
Revenue from External Customer [Line Items] | ||
Total | 523,936 | 450,704 |
Poultry | ||
Revenue from External Customer [Line Items] | ||
Total | 474,651 | 459,083 |
Miscellaneous | ||
Revenue from External Customer [Line Items] | ||
Total | 85,739 | 74,452 |
U.S. Retail | ||
Revenue from External Customer [Line Items] | ||
Total | 1,390,628 | 1,226,430 |
U.S. Foodservice | ||
Revenue from External Customer [Line Items] | ||
Total | 586,336 | 709,106 |
U.S. Deli | ||
Revenue from External Customer [Line Items] | ||
Total | 279,259 | 260,638 |
International | ||
Revenue from External Customer [Line Items] | ||
Total | $ 204,924 | $ 188,260 |
SUBSEQUENT EVENT - Narrative (D
SUBSEQUENT EVENT - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2021 | Jan. 24, 2021 | Jan. 26, 2020 | |
Subsequent Event [Line Items] | |||
Expected tax benefit provided by transaction | $ (54,687) | $ (47,209) | |
Kraft Heinz Company | Planters Snack Nuts Portfolio | Subsequent Event | Forecast | |||
Subsequent Event [Line Items] | |||
Purchase price | $ 3,350,000 | ||
Expected tax benefit provided by transaction | $ 560,000 |