COVER
COVER - shares | 3 Months Ended | |
Jan. 28, 2024 | Feb. 25, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 28, 2024 | |
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 | 55912-3680 | |
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 | --10-27 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Common Stock $0.01465 par value | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 547,687,578 | |
Common Stock Nonvoting $0.01 par value | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Income Statement [Abstract] | ||
Net Sales | $ 2,996,911 | $ 2,970,992 |
Cost of Products Sold | 2,488,178 | 2,475,043 |
Gross Profit | 508,733 | 495,949 |
Selling, General, and Administrative | 240,386 | 222,056 |
Equity in Earnings of Affiliates | 16,091 | 15,559 |
Operating Income | 284,438 | 289,452 |
Interest and Investment Income | 19,434 | 10,096 |
Interest Expense | 18,326 | 18,347 |
Earnings Before Income Taxes | 285,547 | 281,201 |
Provision for Income Taxes | 66,818 | 63,551 |
Net Earnings | 218,729 | 217,651 |
Less: Net Earnings (Loss) Attributable to Noncontrolling Interest | (134) | (69) |
Net Earnings Attributable to Hormel Foods Corporation | $ 218,863 | $ 217,719 |
Net Earnings Per Share | ||
Basic (in dollars per share) | $ 0.40 | $ 0.40 |
Diluted (in dollars per share) | $ 0.40 | $ 0.40 |
Weighted-average Shares Outstanding | ||
Basic (in shares) | 547,020 | 546,384 |
Diluted (in shares) | 547,920 | 550,031 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net Earnings | $ 218,729 | $ 217,651 |
Other Comprehensive Income (Loss), Net of Tax: | ||
Foreign Currency Translation | 11,459 | 15,046 |
Pension and Other Benefits | 2,129 | 2,990 |
Derivatives and Hedging | 5,206 | (14,514) |
Equity Method Investments | 2,884 | 0 |
Total Other Comprehensive Income (Loss) | 21,678 | 3,522 |
Comprehensive Income | 240,407 | 221,173 |
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interest | 75 | 154 |
Comprehensive Income Attributable to Hormel Foods Corporation | $ 240,332 | $ 221,019 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 29, 2023 |
Assets | ||
Cash and Cash Equivalents | $ 963,212 | $ 736,532 |
Short-term Marketable Securities | 18,712 | 16,664 |
Accounts Receivable (Net of Allowance for Doubtful Accounts of $3,651 at January 28, 2024, and $3,557 at October 29, 2023) | 751,048 | 817,391 |
Inventories | 1,578,191 | 1,680,406 |
Prepaid Expenses and Other Current Assets | 56,001 | 46,256 |
Total Current Assets | 3,367,164 | 3,297,249 |
Goodwill | 4,931,257 | 4,928,464 |
Other Intangibles | 1,753,156 | 1,757,171 |
Pension Assets | 200,113 | 204,697 |
Investments in Affiliates | 728,146 | 725,121 |
Other Assets | 377,623 | 370,252 |
Property, Plant, and Equipment | ||
Land | 75,000 | 74,626 |
Buildings | 1,464,811 | 1,458,354 |
Equipment | 2,781,258 | 2,781,730 |
Construction in Progress | 215,086 | 195,665 |
Less: Allowance for Depreciation | (2,380,631) | (2,344,557) |
Net Property, Plant, and Equipment | 2,155,524 | 2,165,818 |
Total Assets | 13,512,983 | 13,448,772 |
Liabilities and Shareholders’ Investment | ||
Accounts Payable and Accrued Expenses | 744,116 | 823,076 |
Accrued Marketing Expenses | 101,928 | 87,452 |
Employee-related Expenses | 212,719 | 263,330 |
Interest and Dividends Payable | 162,452 | 172,178 |
Taxes Payable | 85,533 | 15,212 |
Current Maturities of Long-term Debt | 954,031 | 950,529 |
Total Current Liabilities | 2,260,779 | 2,311,776 |
Long-term Debt Less Current Maturities | 2,357,176 | 2,358,719 |
Pension and Post-retirement Benefits | 352,709 | 349,268 |
Deferred Income Taxes | 500,581 | 498,106 |
Other Long-term Liabilities | 193,172 | 191,917 |
Shareholders’ Investment | ||
Preferred Stock | 0 | 0 |
Additional Paid-in Capital | 529,715 | 506,179 |
Accumulated Other Comprehensive Loss | (250,783) | (272,252) |
Retained Earnings | 7,557,157 | 7,492,952 |
Hormel Foods Corporation Shareholders’ Investment | 7,844,111 | 7,734,885 |
Noncontrolling Interest | 4,455 | 4,100 |
Total Shareholders’ Investment | 7,848,566 | 7,738,985 |
Total Liabilities and Shareholders’ Investment | 13,512,983 | 13,448,772 |
Common Stock, Nonvoting | ||
Shareholders’ Investment | ||
Common Stock | 0 | 0 |
Common Stock | ||
Shareholders’ Investment | ||
Common Stock | $ 8,021 | $ 8,007 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION (PARENTHETICAL) - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 29, 2023 |
Accounts Receivable, Allowance for Doubtful Accounts | $ 3,651 | $ 3,557 |
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, Nonvoting | ||
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 | $ 0.01465 |
Common Stock, Authorized Shares (in shares) | 1,600,000,000 | 1,600,000,000 |
Common Stock, Issued Shares (in shares) | 547,595,988 | 546,599,420 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | $ 7,738,985 | $ 7,540,219 |
Net Earnings (Loss) | 218,729 | 217,651 |
Other Comprehensive Income (Loss) | 21,678 | 3,522 |
Contribution from Noncontrolling Interest | 280 | |
Stock-based Compensation Expense | 4,444 | 5,202 |
Exercise of Stock Options/Restricted Shares | 18,898 | 2,635 |
Declared Dividends | (154,449) | (150,236) |
Ending balance | $ 7,848,566 | $ 7,618,993 |
Common Stock | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance (in shares) | 546,599 | 546,237 |
Beginning balance | $ 8,007 | $ 8,002 |
Exercise of Stock Options/Restricted Shares (in shares) | 997 | 228 |
Exercise of Stock Options/Restricted Shares | $ 14 | $ 3 |
Ending balance (in shares) | 547,596 | 546,466 |
Ending balance | $ 8,021 | $ 8,006 |
Treasury Stock | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance (in shares) | 0 | 0 |
Beginning balance | $ 0 | $ 0 |
Ending balance (in shares) | 0 | 0 |
Ending balance | $ 0 | $ 0 |
Additional Paid-in Capital | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | 506,179 | 469,468 |
Stock-based Compensation Expense | 4,444 | 5,202 |
Exercise of Stock Options/Restricted Shares | 18,883 | 2,632 |
Declared Dividends | 209 | 169 |
Ending balance | 529,715 | 477,470 |
Retained Earnings | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | 7,492,952 | 7,313,374 |
Net Earnings (Loss) | 218,863 | 217,719 |
Declared Dividends | (154,658) | (150,405) |
Ending balance | 7,557,157 | 7,380,689 |
Accumulated Other Comprehensive Income (Loss) | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | (272,252) | (255,561) |
Other Comprehensive Income (Loss) | 21,469 | 3,300 |
Ending balance | (250,783) | (252,261) |
Non- controlling Interest | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | 4,100 | 4,936 |
Net Earnings (Loss) | (134) | (69) |
Other Comprehensive Income (Loss) | 209 | 222 |
Contribution from Noncontrolling Interest | 280 | |
Ending balance | $ 4,455 | $ 5,089 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT (PARENTHETICAL) - $ / shares | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Declared Dividends (in dollars per share) | $ 0.2825 | $ 0.2750 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Operating Activities | ||
Net Earnings | $ 218,729 | $ 217,651 |
Adjustments to Reconcile to Net Cash Provided by (Used in) Operating Activities: | ||
Depreciation and Amortization | 64,067 | 61,503 |
Equity in Earnings of Affiliates | (16,091) | (15,559) |
Distributions Received from Equity Method Investees | 15,731 | 3,652 |
Provision for Deferred Income Taxes | (179) | (311) |
Non-cash Investment Activities | (12,612) | (7,839) |
Stock-based Compensation Expense | 4,444 | 5,202 |
Operating Lease Cost | 8,675 | 5,187 |
Other Non-cash, Net | 5,814 | 1,707 |
Changes in Operating Assets and Liabilities: | ||
Decrease (Increase) in Accounts Receivable | 68,094 | 79,561 |
Decrease (Increase) in Inventories | 103,894 | (11,766) |
Decrease (Increase) in Prepaid Expenses and Other Assets | 1,533 | (34,538) |
Increase (Decrease) in Pension and Post-retirement Benefits | 10,756 | 10,710 |
Increase (Decrease) in Accounts Payable and Accrued Expenses | (132,229) | (171,368) |
Increase (Decrease) in Net Income Taxes Payable | 63,353 | 59,837 |
Net Cash Provided by (Used in) Operating Activities | 403,980 | 203,629 |
Investing Activities | ||
Net Sale (Purchase) of Securities | (964) | (833) |
Purchases of Property, Plant, and Equipment | (47,210) | (37,052) |
Proceeds from Sales of Property, Plant, and Equipment | 8 | 5,016 |
Proceeds from (Purchases of) Affiliates and Other Investments | 0 | (418,616) |
Proceeds from Company-owned Life Insurance | 11 | 16 |
Net Cash Provided by (Used in) Investing Activities | (48,154) | (451,469) |
Financing Activities | ||
Repayments of Long-term Debt and Finance Leases | (2,249) | (2,189) |
Dividends Paid on Common Stock | (150,294) | (142,017) |
Proceeds from Exercise of Stock Options | 18,898 | 2,635 |
Proceeds from Noncontrolling Interest | 280 | 0 |
Net Cash Provided by (Used in) Financing Activities | (133,365) | (141,570) |
Effect of Exchange Rate Changes on Cash | 4,218 | 7,093 |
Increase (Decrease) in Cash and Cash Equivalents | 226,680 | (382,318) |
Cash and Cash Equivalents at Beginning of Year | 736,532 | 982,107 |
Cash and Cash Equivalents at End of Period | $ 963,212 | $ 599,789 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jan. 28, 2024 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE A - 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 accounting principles generally accepted in the United States (U.S.) 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 certain information and footnotes required by U.S. generally accepted accounting principles (GAAP) for comprehensive 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 and cash flows for the interim period are not necessarily indicative of the results that may be expected for the full year. These statements should be reviewed in conjunction with the consolidated financial statements and associated notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 29, 2023. The significant accounting policies used in preparing these interim 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. The Company has 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 29, 2023. 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. Reclassifications: Certain reclassifications of previously reported amounts have been made to conform to the current year presentation. Amortization related to operating leases and debt issuance costs were reclassified from Amortization to separate line items within the operating activities section of the Consolidated Condensed Statements of Cash Flows. These reclassifications had no impact on the Consolidated Statements of Operations, Consolidated Condensed Statements of Financial Position, or the Increase (Decrease) in Cash and Cash Equivalents in the Consolidated Condensed Statements of Cash Flows. Accounting Changes and Recent Accounting Pronouncements: New Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The update is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (CODM), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The ASU also requires all annual disclosures currently required by Topic 280 to be included in interim periods. The update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and requires retrospective application to all prior periods presented in the financial statements. The Company is currently assessing the timing and impact of adopting the updated provisions. In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update is intended to enhance transparency and decision usefulness of income tax disclosures. This ASU updates income tax disclosure requirements by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. The update is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently assessing the timing and impact of adopting the updated provisions. Recently issued accounting standards or pronouncements not disclosed have been excluded as they are currently not relevant to the Company. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Jan. 28, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE B - GOODWILL AND INTANGIBLE ASSETS Goodwill: The change in the carrying amount of goodwill for the quarter ended January 28, 2024, is: In thousands Retail Foodservice International Total Balance at October 29, 2023 $ 2,916,796 $ 1,750,594 $ 261,074 $ 4,928,464 Foreign Currency Translation — — 2,793 2,793 Balance at January 28, 2024 $ 2,916,796 $ 1,750,594 $ 263,867 $ 4,931,257 Intangible Assets: The carrying amounts for indefinite-lived intangible assets are: In thousands January 28, 2024 October 29, 2023 Brands/Trade Names/Trademarks $ 1,636,807 $ 1,636,807 Other Intangibles 184 184 Foreign Currency Translation (5,523) (5,893) Total $ 1,631,468 $ 1,631,098 The gross carrying amount and accumulated amortization for definite-lived intangible assets are: January 28, 2024 October 29, 2023 In thousands Gross Carrying Accumulated Gross Carrying Accumulated Customer Lists/Relationships $ 168,239 $ (85,749) $ 168,239 $ (82,658) Other Intangibles 59,241 (16,919) 59,241 (15,857) Trade Names/Trademarks 6,210 (5,068) 6,540 (5,089) Foreign Currency Translation — (4,265) — (4,344) Total $ 233,690 $ (112,002) $ 234,020 $ (107,947) Amortization expense on intangible assets is as follows: Quarter Ended In thousands January 28, 2024 January 29, 2023 Amortization Expense $ 4,463 $ 4,607 Estimated annual amortization expense on intangible assets for the five fiscal years after October 29, 2023, is as follows: In thousands Amortization Expense 2024 $ 16,381 2025 14,681 2026 14,210 2027 13,940 2028 13,009 |
INVESTMENTS IN AFFILIATES
INVESTMENTS IN AFFILIATES | 3 Months Ended |
Jan. 28, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN AFFILIATES | NOTE C - INVESTMENTS IN AFFILIATES Equity in Earnings of Affiliates consists of: Quarter Ended In thousands % Owned January 28, 2024 January 29, 2023 MegaMex Foods, LLC (1) 50% $ 8,091 $ 13,681 Other Equity Method Investments (2) Various (20-50%) 8,000 1,878 Total Equity in Earnings of Affiliates $ 16,091 $ 15,559 (1) MegaMex, Foods, LLC, is reflected in the Retail Segment. (2) Other Equity Method Investments are primarily reflected in the International Segment but also include corporate venturing investments. Distributions received from equity method investees include: Quarter Ended In thousands January 28, 2024 January 29, 2023 Dividends $ 15,731 $ 3,652 On December 15, 2022, the Company purchased from various minority shareholders a 29% common stock interest in PT Garudafood Putra Putri Jaya Tbk (Garudafood), a food and beverage company in Indonesia. On April 12, 2023, the Company purchased additional shares increasing the ownership interest to 30%. This investment expands the Company’s presence in Southeast Asia and supports the global execution of the entertaining and snacking strategy. The Company has the ability to exercise significant influence, but not control, over Garudafood; therefore, the investment is accounted for under the equity method. The Company obtained its Garudafood interest for a purchase price of $425.8 million, including associated transaction costs. The transaction was funded using the Company’s cash on hand. Based on a third-party valuation, the Company’s basis difference between the fair value of the investment and proportionate share of the carrying value of Garudafood’s net assets is $324.8 million. The basis difference related to inventory, property, plant and equipment, and certain intangible assets is being amortized through Equity in Earnings of Affiliates over the associated useful lives. As of January 28, 2024, the remaining basis difference was $324.9 million, which includes the impact of foreign currency translation. Based on quoted market prices, the fair value of the common stock held in Garudafood was $279.4 million as of January 26, 2024. The Company recognized a basis difference of $21.3 million associated with the formation of MegaMex Foods, LLC, of which $9.1 million is remaining as of January 28, 2024. This difference is being amortized through Equity in Earnings of Affiliates. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Jan. 28, 2024 | |
Inventory, Net [Abstract] | |
INVENTORIES | NOTE D - INVENTORIES Principal components of inventories are: In thousands January 28, 2024 October 29, 2023 Finished Products $ 887,941 $ 954,432 Raw Materials and Work-in-Process 416,896 448,535 Operating Supplies 161,174 168,289 Maintenance Materials and Parts 112,181 109,151 Total Inventories $ 1,578,191 $ 1,680,406 |
DERIVATIVES AND HEDGING
DERIVATIVES AND HEDGING | 3 Months Ended |
Jan. 28, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING | NOTE E - DERIVATIVES AND HEDGING The Company uses hedging programs to manage risk associated with commodity purchases and interest rates. These programs utilize futures, swaps, and options contracts to manage the Company’s exposure to market fluctuations. 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. If the requirements of hedge accounting are no longer met, hedge accounting is discontinued immediately and any future changes to fair value are recorded directly through earnings. Cash Flow Commodity Hedges: The Company uses futures, swaps, and options contracts to offset price fluctuations in the Company's future purchases of grain, lean hogs, natural gas, and diesel fuel. These contracts are designated as cash flow hedges; therefore, 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 periods in which the hedged transactions affect earnings. The Company typically does not hedge its grain, natural gas, or diesel fuel exposure beyond the next two Fair Value Commodity 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 lean hog and grain suppliers as fair value hedges. The programs are intended 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 and the gain or loss on the hedged purchase commitment are marked-to-market through earnings and recorded on the Consolidated Condensed Statements of Financial Position as a Current Asset and Current Liability, respectively. Gains or losses related to these fair value hedges are recognized through Cost of Products Sold in the periods in which the hedged transactions affect earnings. Cash Flow Interest Rate Hedges: In the second quarter of fiscal 2021, the Company designated two separate interest rate locks as cash flow hedges to manage interest rate risk associated with the anticipated debt transactions required to fund the acquisition of the Planters ® snack nuts business. The total notional amount of the Company’s locks was $1.25 billion. In the third quarter of fiscal 2021, the associated unsecured senior notes were issued with a tenor of seven Fair Value Interest Rate Hedge: In the first quarter of fiscal 2022, the Company entered into an interest rate swap to protect against changes in the fair value of a portion of previously issued senior unsecured notes attributable to the change in the benchmark interest rate. The hedge specifically designated the last $450 million of the notes due June 2024 (the 2024 Notes). The Company terminated the swap in the fourth quarter of fiscal 2022. The loss related to the swap was recorded as a fair value hedging adjustment to the hedged debt and will be amortized through earnings over the remaining life of the debt. Other Derivatives: The Company holds certain futures and swap contracts to manage the Company’s exposure to fluctuations in grain and pork 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 contracts related to its commodity hedging programs include: In millions January 28, 2024 October 29, 2023 Corn 24.8 bushels 30.7 bushels Lean Hogs 158.2 pounds 144.2 pounds Natural Gas 3.5 MMBtu 3.0 MMBtu Diesel Fuel 0.3 gallons — gallons Fair Value of Derivatives: The gross fair values of the Company’s derivative instruments designated as hedges are: In thousands Location on Consolidated Condensed Statements of Financial Position January 28, 2024 October 29, 2023 Commodity Contracts (1) Other Current Assets $ (8,909) $ (13,233) (1) Amounts represent the gross fair value of commodity derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its commodity 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 commodity derivative on the Consolidated Condensed Statements of Financial Position. The gross liability position as of January 28, 2024, is offset by the right to reclaim net cash collateral of $24.5 million contained within the master netting arrangement. The gross liability position as of October 29, 2023, is offset by the right to reclaim net cash collateral of $32.2 million. See Note H - Fair Value Measurements for a discussion of these net amounts as reported on the Consolidated Condensed Statements of Financial Position. Fair Value Hedge - Assets (Liabilities): The carrying amount of the Company’s fair value hedged assets (liabilities) are: In thousands Location on Consolidated Condensed Statements of Financial Position January 28, 2024 October 29, 2023 Commodity Contracts Accounts Payable (1) $ (2,241) $ (4,914) Interest Rate Contracts Current Maturities of Long-term Debt (2) (445,673) (442,549) (1) Represents the carrying amount of fair value hedged assets and liabilities, which are offset by other assets included in master netting arrangements described above. (2) Represents the carrying amount of the hedged portion of the 2024 Notes. As of January 28, 2024, the carrying amount of the 2024 Notes included a cumulative fair value hedging adjustment of $4.3 million from discontinued hedges. Accumulated Other Comprehensive Loss Impact: As of January 28, 2024, the Company included in AOCL hedging losses (before tax) of $17.3 million on commodity contracts and gains (before tax) of $12.2 million related to interest rate settled positions. The Company expects to recognize the majority of the losses on commodity contracts over the next twelve months. Gains on interest rate contracts offset the hedged interest payments over the tenor of the associated debt instruments. The effect on AOCL for gains or losses (before tax) related to the Company's derivative instruments are: Gain/(Loss) Recognized in AOCL (1) Gain/(Loss) Reclassified from AOCL into Earnings (1) Location on Quarter Ended Quarter Ended In thousands January 28, 2024 January 29, 2023 January 28, 2024 January 29, 2023 Cash Flow Hedges Commodity Contracts $ (5,613) $ (8,390) $ (11,601) $ 10,859 Cost of Products Sold Excluded Component (2) 1,156 345 — — Interest Rate Contracts — — 247 247 Interest Expense (1) See Note G - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. (2) Represents the time value of commodity options excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in AOCL. 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 are: Quarter Ended In thousands January 28, 2024 January 29, 2023 Net Earnings Attributable to Hormel Foods Corporation $ 218,863 $ 217,719 Cash Flow Hedges - Commodity Contracts Gain (Loss) Reclassified from AOCL (11,601) 10,859 Amortization of Excluded Component from Options (1,156) (1,412) Fair Value Hedges - Commodity Contracts Gain (Loss) on Commodity Futures (1) 3,595 (3,022) Total Gain (Loss) on Commodity Contracts (2) (9,163) 6,425 Cash Flow Hedges - Interest Rate Contracts Gain (Loss) Reclassified from AOCL 247 247 Fair Value Hedge - Interest Rate Contracts Amortization of Loss Due to Discontinuance of Fair Value Hedge (3) (3,125) (3,125) Total Gain (Loss) on Interest Rate Contracts (4) (2,878) (2,878) Total Gain (Loss) Recognized in Earnings $ (12,040) $ 3,547 (1) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the quarter ended January 28, 2024, and January 29, 2023, 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. (2) Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold. (3) Represents the fair value hedging adjustment amortized through earnings. (4) Total Gain (Loss) on Interest Rate Contracts is recognized in earnings through Interest Expense. |
PENSION AND OTHER POST-RETIREME
PENSION AND OTHER POST-RETIREMENT BENEFITS | 3 Months Ended |
Jan. 28, 2024 | |
Retirement Benefits [Abstract] | |
PENSION AND OTHER POST-RETIREMENT BENEFITS | NOTE F - PENSION AND OTHER POST-RETIREMENT BENEFITS Net periodic cost for pension and other post-retirement benefit plans consists of: Pension Benefits Quarter Ended In thousands January 28, 2024 January 29, 2023 Service Cost $ 9,053 $ 8,902 Interest Cost 18,336 17,157 Expected Return on Plan Assets (19,377) (19,571) Amortization of Prior Service Cost (221) (460) Recognized Actuarial (Gain) Loss 3,316 3,325 Net Periodic Cost $ 11,107 $ 9,353 Post-retirement Benefits Quarter Ended In thousands January 28, 2024 January 29, 2023 Service Cost $ 41 $ 62 Interest Cost 2,896 3,014 Amortization of Prior Service Cost 2 2 Recognized Actuarial (Gain) Loss (317) (7) Net Periodic Cost $ 2,622 $ 3,070 Non-service cost components of net pension and post-retirement benefit cost are presented within Interest and Investment Income in the Consolidated Statements of Operations. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Jan. 28, 2024 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE G - ACCUMULATED OTHER COMPREHENSIVE LOSS Components of Accumulated Other Comprehensive Loss are as follows: In thousands Foreign Pension & Derivatives & Hedging Equity Accumulated Balance at October 29, 2023 $ (86,022) $ (183,993) $ (9,084) $ 6,847 $ (272,252) Unrecognized Gains (Losses) Gross 11,250 32 (4,457) 4,522 11,347 Tax Effect — — 1,074 — 1,074 Reclassification into Net Earnings Gross — 2,780 (1) 11,354 (2) (1,639) (3) 12,496 Tax Effect — (683) (2,765) — (3,448) Change Net of Tax 11,250 2,129 5,206 2,884 21,469 Balance at January 28, 2024 $ (74,772) $ (181,863) $ (3,877) $ 9,730 $ (250,783) (1) Included in computation of net periodic cost. See Note F - Pension and Other Post-Retirement Benefits for additional information. (2) Included in Cost of Products Sold and Interest Expense in the Consolidated Statements of Operations. See Note E - Derivatives and Hedging for additional information. (3) Included in Equity in Earnings of Affiliates in the Consolidated Statements of Operations. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Jan. 28, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE H - FAIR VALUE MEASUREMENTS Accounting guidance establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of the three levels below based on the inputs used in the valuation. 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 and their level within the fair value hierarchy are presented in the tables below. Fair Value Measurements at January 28, 2024 In thousands Total Fair Quoted Prices Significant Significant Assets at Fair Value Cash and Cash Equivalents (1) $ 963,212 $ 957,910 $ 5,302 $ — Short-term Marketable Securities (2) 18,712 3,459 15,253 — Other Trading Securities (3) 199,690 — 199,690 — Commodity Derivatives (4) 5,365 7,767 (2,402) — Total Assets at Fair Value $ 1,186,979 $ 969,136 $ 217,844 $ — Liabilities at Fair Value Deferred Compensation (3) $ 60,658 $ — $ 60,658 $ — Total Liabilities at Fair Value $ 60,658 $ — $ 60,658 $ — Fair Value Measurements at October 29, 2023 In thousands Total Fair Quoted Prices Significant Significant Assets at Fair Value Cash and Cash Equivalents (1) $ 736,532 $ 735,387 $ 1,145 $ — Short-term Marketable Securities (2) 16,664 2,499 14,164 — Other Trading Securities (3) 188,162 — 188,162 — Commodity Derivatives (4) 9,330 9,603 (273) — Total Assets at Fair Value $ 950,688 $ 747,489 $ 203,199 $ — Liabilities at Fair Value Deferred Compensation (3) $ 55,222 $ — $ 55,222 $ — Total Liabilities at Fair Value $ 55,222 $ — $ 55,222 $ — 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 majority of the funds held in the rabbi trust relate to 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 as 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 Company’s deferred compensation plans, participants can defer certain types of compensation and elect to receive a return based on the changes in fair value of various investment options, which include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percent of the U.S. Internal Revenue Service (IRS) applicable federal rates. These liabilities are classified as Level 2. The Company maintains funding in the rabbi trust generally mirroring the selections within the deferred compensation plans. 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. These policies are classified as Level 2. The rabbi trust is included in Other Assets and deferred compensation liabilities in Other Long-term Liabilities on the Consolidated Condensed Statements of Financial Position. Securities held by the rabbi trust are classified as trading securities. Unrealized gains and losses associated with these investments are included in the Company's earnings. During the quarter ended January 28, 2024, securities held by the rabbi trust generated gains of $11.5 million, compared to gains of $7.0 million for the quarter ended January 29, 2023. (4) The Company’s commodity derivatives represent futures, swaps, and options contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn, natural gas, diesel fuel, hogs, and pork, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures and options 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. The Company holds natural gas, diesel fuel, and pork swap contracts that are over-the-counter instruments classified as Level 2. The value of the natural gas and diesel fuel swap contracts is calculated using quoted prices from the New York Mercantile Exchange, and the value of the pork swap contracts are calculated using a futures implied USDA estimated pork cut-out value. All derivatives are reviewed for potential credit risk and risk of nonperformance. The net balance for commodity derivatives is included in Other Current Assets or Accounts Payable, as appropriate, on the Consolidated Condensed Statements of Financial Position. As of January 28, 2024, the Company has recognized the right to reclaim net cash collateral of $24.5 million from various counterparties (including cash of $22.3 million plus $2.2 million of realized gain). As of October 29, 2023, the Company had recognized the right to reclaim net cash collateral of $32.2 million from various counterparties (including cash of $42.6 million less $10.4 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 on the Consolidated Condensed Statements of Financial Position. The fair value of long-term debt, utilizing discounted cash flows (Level 2), was $2.8 billion as of January 28, 2024, and $2.7 billion as of October 29, 2023. See Note J - Long-Term Debt and Other Borrowing Arrangements for additional information. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jan. 28, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE I - COMMITMENTS AND CONTINGENCIES Except as described below, there were no material changes outside the ordinary course of business during the quarter ended January 28, 2024, to the contractual obligations and other commitments last disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 29, 2023. Legal Proceedings: The Company is a party to various legal proceedings related to the ongoing operation of its business, including claims both by and against the Company. At any time, such proceedings typically involve claims related to product liability, labeling, contracts, antitrust regulations, intellectual property, competition laws, employment practices, or other actions brought by employees, customers, consumers, competitors, or suppliers. The Company establishes accruals for its potential exposure, as appropriate, for claims against the Company when losses become probable and reasonably estimable. However, future developments or settlements are uncertain and may require the Company to change such accruals as proceedings progress. Resolution of any currently known matter, either individually or in the aggregate, is not expected to have a material effect on the Company’s financial condition, results of operations, or liquidity. Pork Antitrust Litigation Beginning in June 2018, a series of putative class action complaints were filed against the Company, as well as several other pork-processing companies and a benchmarking service called Agri Stats in the United States District Court for the District of Minnesota styled In re Pork Antitrust Litigation (the Pork Antitrust Civil Litigation). The plaintiffs allege, among other things, that beginning in January 2009, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of pork and pork products—including through the use of Agri Stats—in violation of federal antitrust laws. The complaints on behalf of the putative classes of indirect purchasers also include causes of action under various state unfair competition laws, consumer protection laws, and unjust enrichment common laws. The plaintiffs seek treble damages, injunctive relief, pre-and post-judgment interest, costs, and attorneys’ fees. Since the original filing, certain direct-action plaintiffs have opted out of class treatment and are proceeding with individual direct actions making similar claims, and others may do so in the future. The Company has not recorded any liability for these matters as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations. The Offices of the Attorney General in New Mexico and Alaska have filed complaints against the Company and certain of its pork subsidiaries, as well as several other pork processing companies and Agri Stats. The complaints are based on allegations similar to those asserted in the Pork Antitrust Civil Litigation and allege violations of state antitrust, unfair trade practice, and unjust enrichment laws based on allegations of conspiracies to exchange information and manipulate the supply of pork. The Company has not recorded any liability for these matters as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations. Turkey Antitrust Litigation Beginning in December 2019, a series of putative class action complaints were filed against the Company, as well as several other turkey-processing companies and a benchmarking service called Agri Stats, in the U.S. District Court for the Northern District of Illinois styled In re Turkey Antitrust Litigation . The plaintiffs allege, among other things, that from at least 2010 to 2017, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of turkey products—including through the use of Agri Stats—in violation of federal antitrust laws. The complaints on behalf of the putative classes of indirect purchasers also include causes of action under various state unfair competition laws, consumer protection laws, and unjust enrichment common laws. The plaintiffs seek treble damages, injunctive relief, pre-and post-judgment interest, costs, and attorneys’ fees. Since the original filing, certain direct-action plaintiffs have opted out of class treatment and are proceeding with individual direct actions making similar claims, and others may do so in the future. The Company has not recorded any liability for these matters as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations. Poultry Wages Antitrust Litigation In December 2019, a putative class of non-supervisory production and maintenance employees at poultry-processing plants in the continental United States filed an amended consolidated class action complaint against the Company and various other poultry processing companies in the United States District Court for the District of Maryland styled Jien, et al. v. Perdue Farms, Inc., et al . The plaintiffs allege that since 2009, the defendants directly and through a wage survey and benchmarking service exchanged information regarding compensation in an effort to depress and fix wages and benefits for employees at poultry-processing plants, feed mills, and hatcheries in violation of federal antitrust laws. The plaintiffs seek, among other things, treble monetary damages, punitive damages, restitution, and pre-and post-judgment interest, as well as declaratory and injunctive relief. In July 2022, the Court partially granted the Company’s motion to dismiss, and dismissed plaintiffs’ per se wage-fixing claim as to the Company. The Company has not recorded any liability for this matter as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations. Red Meat Wages Antitrust Litigation In November 2022, a putative class of non-supervisory production and maintenance employees at “red meat” processing plants in the continental United States filed a class action complaint against the Company and various other beef- and pork-processing companies in the United States District Court for the District of Colorado styled Brown, et al. v. JBS USA Food Co., et al . The plaintiffs allege that since 2014, the defendants directly and through a wage survey and benchmarking service exchanged information regarding compensation in an effort to depress and fix wages and benefits for employees at beef- and pork-processing plants in violation of federal antitrust laws. The plaintiffs seek, among other things, treble monetary damages, punitive damages, restitution, and pre-and post-judgment interest, as well as declaratory and injunctive relief. The Company has not recorded any liability for this matter as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations. |
LONG-TERM DEBT AND OTHER BORROW
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS | 3 Months Ended |
Jan. 28, 2024 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS | NOTE J - LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS Long-term Debt consists of: In thousands January 28, 2024 October 29, 2023 Senior Unsecured Notes, with Interest at 3.050% Interest Due Semi-annually through June 2051 Maturity Date $ 600,000 $ 600,000 Senior Unsecured Notes, with Interest at 1.800% Interest Due Semi-annually through June 2030 Maturity Date 1,000,000 1,000,000 Senior Unsecured Notes, with Interest at 1.700% Interest Due Semi-annually through June 2028 Maturity Date 750,000 750,000 Senior Unsecured Notes, with Interest at 0.650% Interest Due Semi-annually through June 2024 Maturity Date 950,000 950,000 Unamortized Discount on Senior Notes (6,832) (7,016) Unamortized Debt Issuance Costs (15,383) (16,278) Interest Rate Swap Liabilities (1) (4,327) (7,451) Finance Lease Liabilities 33,938 36,085 Other Financing Arrangements 3,811 3,908 Total 3,311,208 3,309,247 Less: Current Maturities of Long-term Debt 954,031 950,529 Long-term Debt Less Current Maturities $ 2,357,176 $ 2,358,719 (1) See Note E - Derivatives and Hedging for additional information. Senior Unsecured Notes: On June 3, 2021, the Company issued $950.0 million aggregate principal amount of its 0.650% notes due 2024 (2024 Notes), $750.0 million aggregate principal amount of its 1.700% notes due 2028 (2028 Notes), and $600.0 million aggregate principal amount of its 3.050% notes due 2051 (2051 Notes). The 2024 Notes may be redeemed in whole or in part one year after their issuance without penalty for early partial payments or full redemption. The 2028 Notes and 2051 Notes may be redeemed in whole or in part at any time at the applicable redemption price. Interest will accrue per annum at the stated rates with interest on the notes being paid semi-annually in arrears on June 3 and December 3 of each year, commencing December 3, 2021. Interest rate risk was hedged utilizing interest rate locks on the 2028 Notes and 2051 Notes. The Company lifted the hedges in conjunction with the issuance of these notes. See Note E - Derivatives and Hedging for additional information. If a change of control triggering event occurs, the Company must offer to purchase the notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. On June 11, 2020, the Company issued senior notes in an aggregate principal amount of $1.0 billion due 2030. The notes bear interest at a fixed rate of 1.800% per annum, with interest paid semi-annually in arrears on June 11 and December 11 of each year, commencing December 11, 2020. The notes may be redeemed in whole or in part at any time at the applicable redemption price set forth in the prospectus supplement. If a change of control triggering event occurs, the Company must offer to purchase the notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. Subsequent to the end of the first quarter of fiscal 2024, the Company's Board of Directors approved up to $500 million of new long-term financing which is intended, along with cash on hand, to pay the 2024 Notes upon maturity. Unsecured Revolving Credit Facility: On May 6, 2021, the Company entered into an unsecured revolving credit agreement with Wells Fargo Bank, National Association as administrative agent, swingline lender and issuing lender, U.S. Bank National Association, JPMorgan Chase Bank, N.A. and BofA Securities, Inc. as syndication agents and the lenders party thereto. The revolving credit agreement provides for an unsecured revolving credit facility with an aggregate principal commitment amount at any time outstanding of up to $750.0 million with an uncommitted increase option of an additional $375.0 million upon the satisfaction of certain conditions. On April 17, 2023, the Company entered into a first amendment (Amendment) to the Company’s $750.0 million revolving credit agreement. The Amendment provides for, among other things (i) the replacement of London Interbank Offered Rate (LIBOR) with Term Secured Overnight Financing Rate (SOFR) and Daily Simple Singapore Overnight Rate Average (SORA) for the Eurocurrency Rate for U.S. Dollars and Singapore Dollars, including applicable credit spread adjustments and relevant SOFR benchmark provisions, (ii) permitting two one-year extension options to be exercised at any anniversary, (iii) removing the change in debt ratings notice requirement, (iv) shortening the notice period requirements for Base Rate Loans to allow for same day notice, and (v) increasing the number of permitted interest periods from 8 to 15. The unsecured revolving line of credit bears interest, at the Company’s election, at either a Base Rate plus margin of 0.0% to 0.150% or the Adjusted Term SOFR, Adjusted Daily Simple Risk-Free Rate (RFR) or Eurocurrency Rate plus margin of 0.575% to 1.150% and a variable fee of 0.050% to 0.100% is paid for the availability of this credit line. Extensions of credit under the facility may be made in the form of revolving loans, swingline loans, and letters of credit. The lending commitments under the agreement are scheduled to expire on May 6, 2026, at which time the Company will be required to pay in full all obligations then outstanding. As of January 28, 2024, and October 29, 2023, the Company had no outstanding draws from this facility. Debt Covenants: The Company is required by certain covenants in its debt agreements to maintain specified levels of financial ratios and financial position. As of January 28, 2024, the Company was in compliance with all covenants. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 28, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE K - 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 quarter ended January 28, 2024, was 23.4% compared to 22.6% for the corresponding period a year ago. The Company benefited from the impact of certain discrete items and higher federal deductions in the prior year. Unrecognized tax benefits, including interest and penalties, are recorded in Other Long-term Liabilities. If recognized as of January 28, 2024, these benefits would impact the Company’s effective tax rate by $17.7 million compared to $18.2 million as of January 29, 2023. The Company includes accrued interest and penalties related to uncertain tax positions in Provision for Income Taxes, with immaterial losses included during the quarter ended January 28, 2024, and January 29, 2023. The amount of accrued interest and penalties associated with unrecognized tax benefits was $2.7 million at January 28, 2024, and $2.6 million at January 29, 2023. The Company is regularly audited by federal and state taxing authorities. The IRS concluded its examination of fiscal 2021 in the second quarter of fiscal 2023. The IRS placed the Company in the Bridge phase of the Compliance Assurance Process (CAP) for fiscal years 2020 and 2023. In this phase, the IRS will not accept any disclosures, conduct any reviews, or provide any assurances. The Company has elected to participate in CAP for fiscal years through 2025. The objective of CAP is to contemporaneously work with the IRS 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, as far back as 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. 28, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE DATA | NOTE L - EARNINGS PER SHARE DATA The reported net earnings attributable to the Company were used when computing basic and diluted earnings per share. Diluted earnings per share was calculated using the treasury stock method. The shares used as the denominator for those computations are as follows: Quarter Ended In thousands January 28, 2024 January 29, 2023 Basic Weighted-average Shares Outstanding 547,020 546,384 Dilutive Potential Common Shares 900 3,647 Diluted Weighted-average Shares Outstanding 547,920 550,031 Antidilutive Potential Common Shares 17,892 3,239 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Jan. 28, 2024 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE M - 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 three segments: Retail, Foodservice, and International, which is consistent with how the Company's chief operating decision maker (CODM) assesses performance and allocates resources. The Retail segment consists primarily of the processing, marketing, and sale of food products sold predominantly in the retail market. This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture. The Foodservice segment consists primarily of the processing, marketing, and sale of food and nutritional products for foodservice, convenience store, and commercial customers. The International segment processes, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures, equity method investments, and royalty arrangements. Intersegment sales are eliminated in consolidation and are not reviewed when evaluating segment performance. The Company does not allocate deferred compensation, expenses associated with the transformation and modernization initiative, 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 corporate venturing investments and noncontrolling interests are excluded. These items are included below as Net Unallocated Expense and Noncontrolling Interest when reconciling to Earnings Before Income Taxes. Financial measures for each of the Company’s reportable segments and reconciliation to consolidated 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. Quarter Ended In thousands January 28, 2024 January 29, 2023 Net Sales Retail $ 1,911,272 $ 1,957,797 Foodservice 913,087 834,750 International 172,552 178,445 Total Net Sales $ 2,996,911 $ 2,970,992 Segment Profit Retail $ 149,505 $ 154,677 Foodservice 150,164 136,442 International 20,031 19,905 Total Segment Profit 319,700 311,025 Net Unallocated Expense 34,020 29,755 Noncontrolling Interest (134) (69) Earnings Before Income Taxes $ 285,547 $ 281,201 The Company’s products primarily consist of meat and other food products. Total revenue contributed by classes of similar products are: Quarter Ended In thousands January 28, 2024 January 29, 2023 Perishable $ 2,106,571 $ 2,080,461 Shelf-stable 890,340 890,531 Total Net Sales $ 2,996,911 $ 2,970,992 Perishable includes fresh meats, frozen items, refrigerated meal solutions, bacon, sausages, hams, guacamole, and other items that require refrigeration. Shelf-stable includes canned luncheon meats, nut butters, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, nutritional food supplements, and other items that do not require refrigeration. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Pay vs Performance Disclosure | ||
Net Earnings Attributable to Hormel Foods Corporation | $ 218,863 | $ 217,719 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jan. 28, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jan. 28, 2024 | |
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 accounting principles generally accepted in the United States (U.S.) 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 certain information and footnotes required by U.S. generally accepted accounting principles (GAAP) for comprehensive 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 and cash flows for the interim period are not necessarily indicative of the results that may be expected for the full year. |
Reclassifications | Reclassifications: |
Accounting Changes and Recent Accounting Pronouncements | Accounting Changes and Recent Accounting Pronouncements: New Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The update is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (CODM), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The ASU also requires all annual disclosures currently required by Topic 280 to be included in interim periods. The update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and requires retrospective application to all prior periods presented in the financial statements. The Company is currently assessing the timing and impact of adopting the updated provisions. In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update is intended to enhance transparency and decision usefulness of income tax disclosures. This ASU updates income tax disclosure requirements by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. The update is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently assessing the timing and impact of adopting the updated provisions. Recently issued accounting standards or pronouncements not disclosed have been excluded as they are currently not relevant to the Company. |
Fair Value Measurements | Accounting guidance establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of the three levels below based on the inputs used in the valuation. 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 three segments: Retail, Foodservice, and International, which is consistent with how the Company's chief operating decision maker (CODM) assesses performance and allocates resources. The Retail segment consists primarily of the processing, marketing, and sale of food products sold predominantly in the retail market. This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture. The Foodservice segment consists primarily of the processing, marketing, and sale of food and nutritional products for foodservice, convenience store, and commercial customers. The International segment processes, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures, equity method investments, and royalty arrangements. Intersegment sales are eliminated in consolidation and are not reviewed when evaluating segment performance. The Company does not allocate deferred compensation, expenses associated with the transformation and modernization initiative, 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 corporate venturing investments and 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. 28, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill | The change in the carrying amount of goodwill for the quarter ended January 28, 2024, is: In thousands Retail Foodservice International Total Balance at October 29, 2023 $ 2,916,796 $ 1,750,594 $ 261,074 $ 4,928,464 Foreign Currency Translation — — 2,793 2,793 Balance at January 28, 2024 $ 2,916,796 $ 1,750,594 $ 263,867 $ 4,931,257 |
Schedule of carrying amounts for indefinite-lived intangible assets | The carrying amounts for indefinite-lived intangible assets are: In thousands January 28, 2024 October 29, 2023 Brands/Trade Names/Trademarks $ 1,636,807 $ 1,636,807 Other Intangibles 184 184 Foreign Currency Translation (5,523) (5,893) Total $ 1,631,468 $ 1,631,098 |
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 28, 2024 October 29, 2023 In thousands Gross Carrying Accumulated Gross Carrying Accumulated Customer Lists/Relationships $ 168,239 $ (85,749) $ 168,239 $ (82,658) Other Intangibles 59,241 (16,919) 59,241 (15,857) Trade Names/Trademarks 6,210 (5,068) 6,540 (5,089) Foreign Currency Translation — (4,265) — (4,344) Total $ 233,690 $ (112,002) $ 234,020 $ (107,947) |
Schedule of amortization expense | Amortization expense on intangible assets is as follows: Quarter Ended In thousands January 28, 2024 January 29, 2023 Amortization Expense $ 4,463 $ 4,607 |
Schedule of estimated annual amortization expense | Estimated annual amortization expense on intangible assets for the five fiscal years after October 29, 2023, is as follows: In thousands Amortization Expense 2024 $ 16,381 2025 14,681 2026 14,210 2027 13,940 2028 13,009 |
INVESTMENTS IN AFFILIATES (Tabl
INVESTMENTS IN AFFILIATES (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of equity in earnings of affiliates | Equity in Earnings of Affiliates consists of: Quarter Ended In thousands % Owned January 28, 2024 January 29, 2023 MegaMex Foods, LLC (1) 50% $ 8,091 $ 13,681 Other Equity Method Investments (2) Various (20-50%) 8,000 1,878 Total Equity in Earnings of Affiliates $ 16,091 $ 15,559 (1) MegaMex, Foods, LLC, is reflected in the Retail Segment. (2) Other Equity Method Investments are primarily reflected in the International Segment but also include corporate venturing investments. |
Schedule of distributions received from equity method investees | Distributions received from equity method investees include: Quarter Ended In thousands January 28, 2024 January 29, 2023 Dividends $ 15,731 $ 3,652 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
Inventory, Net [Abstract] | |
Schedule of principal components of inventories | Principal components of inventories are: In thousands January 28, 2024 October 29, 2023 Finished Products $ 887,941 $ 954,432 Raw Materials and Work-in-Process 416,896 448,535 Operating Supplies 161,174 168,289 Maintenance Materials and Parts 112,181 109,151 Total Inventories $ 1,578,191 $ 1,680,406 |
DERIVATIVES AND HEDGING (Tables
DERIVATIVES AND HEDGING (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
Derivative [Line Items] | |
Schedule of fair values of derivative instruments | The gross fair values of the Company’s derivative instruments designated as hedges are: In thousands Location on Consolidated Condensed Statements of Financial Position January 28, 2024 October 29, 2023 Commodity Contracts (1) Other Current Assets $ (8,909) $ (13,233) (1) Amounts represent the gross fair value of commodity derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its commodity 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 commodity derivative on the Consolidated Condensed Statements of Financial Position. The gross liability position as of January 28, 2024, is offset by the right to reclaim net cash collateral of $24.5 million contained within the master netting arrangement. The gross liability position as of October 29, 2023, is offset by the right to reclaim net cash collateral of $32.2 million. See Note H - Fair Value Measurements for a discussion of these net amounts as reported on the Consolidated Condensed Statements of Financial Position. |
Schedule of fair value hedge assets (liabilities) | The carrying amount of the Company’s fair value hedged assets (liabilities) are: In thousands Location on Consolidated Condensed Statements of Financial Position January 28, 2024 October 29, 2023 Commodity Contracts Accounts Payable (1) $ (2,241) $ (4,914) Interest Rate Contracts Current Maturities of Long-term Debt (2) (445,673) (442,549) (1) Represents the carrying amount of fair value hedged assets and liabilities, which are offset by other assets included in master netting arrangements described above. (2) Represents the carrying amount of the hedged portion of the 2024 Notes. As of January 28, 2024, the carrying amount of the 2024 Notes included a cumulative fair value hedging adjustment of $4.3 million from discontinued hedges. |
Schedule of gains or losses related to derivative instruments | The effect on AOCL for gains or losses (before tax) related to the Company's derivative instruments are: Gain/(Loss) Recognized in AOCL (1) Gain/(Loss) Reclassified from AOCL into Earnings (1) Location on Quarter Ended Quarter Ended In thousands January 28, 2024 January 29, 2023 January 28, 2024 January 29, 2023 Cash Flow Hedges Commodity Contracts $ (5,613) $ (8,390) $ (11,601) $ 10,859 Cost of Products Sold Excluded Component (2) 1,156 345 — — Interest Rate Contracts — — 247 247 Interest Expense (1) See Note G - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. (2) Represents the time value of commodity options excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in AOCL. 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 are: Quarter Ended In thousands January 28, 2024 January 29, 2023 Net Earnings Attributable to Hormel Foods Corporation $ 218,863 $ 217,719 Cash Flow Hedges - Commodity Contracts Gain (Loss) Reclassified from AOCL (11,601) 10,859 Amortization of Excluded Component from Options (1,156) (1,412) Fair Value Hedges - Commodity Contracts Gain (Loss) on Commodity Futures (1) 3,595 (3,022) Total Gain (Loss) on Commodity Contracts (2) (9,163) 6,425 Cash Flow Hedges - Interest Rate Contracts Gain (Loss) Reclassified from AOCL 247 247 Fair Value Hedge - Interest Rate Contracts Amortization of Loss Due to Discontinuance of Fair Value Hedge (3) (3,125) (3,125) Total Gain (Loss) on Interest Rate Contracts (4) (2,878) (2,878) Total Gain (Loss) Recognized in Earnings $ (12,040) $ 3,547 (1) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the quarter ended January 28, 2024, and January 29, 2023, 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. (2) Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold. (3) Represents the fair value hedging adjustment amortized through earnings. (4) Total Gain (Loss) on Interest Rate Contracts is recognized in earnings through Interest Expense. |
Cash Flow Hedges | |
Derivative [Line Items] | |
Schedule of outstanding commodity futures contracts | The Company's outstanding contracts related to its commodity hedging programs include: In millions January 28, 2024 October 29, 2023 Corn 24.8 bushels 30.7 bushels Lean Hogs 158.2 pounds 144.2 pounds Natural Gas 3.5 MMBtu 3.0 MMBtu Diesel Fuel 0.3 gallons — gallons |
PENSION AND OTHER POST-RETIRE_2
PENSION AND OTHER POST-RETIREMENT BENEFITS (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic cost of defined benefit plans | Net periodic cost for pension and other post-retirement benefit plans consists of: Pension Benefits Quarter Ended In thousands January 28, 2024 January 29, 2023 Service Cost $ 9,053 $ 8,902 Interest Cost 18,336 17,157 Expected Return on Plan Assets (19,377) (19,571) Amortization of Prior Service Cost (221) (460) Recognized Actuarial (Gain) Loss 3,316 3,325 Net Periodic Cost $ 11,107 $ 9,353 Post-retirement Benefits Quarter Ended In thousands January 28, 2024 January 29, 2023 Service Cost $ 41 $ 62 Interest Cost 2,896 3,014 Amortization of Prior Service Cost 2 2 Recognized Actuarial (Gain) Loss (317) (7) Net Periodic Cost $ 2,622 $ 3,070 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
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 as follows: In thousands Foreign Pension & Derivatives & Hedging Equity Accumulated Balance at October 29, 2023 $ (86,022) $ (183,993) $ (9,084) $ 6,847 $ (272,252) Unrecognized Gains (Losses) Gross 11,250 32 (4,457) 4,522 11,347 Tax Effect — — 1,074 — 1,074 Reclassification into Net Earnings Gross — 2,780 (1) 11,354 (2) (1,639) (3) 12,496 Tax Effect — (683) (2,765) — (3,448) Change Net of Tax 11,250 2,129 5,206 2,884 21,469 Balance at January 28, 2024 $ (74,772) $ (181,863) $ (3,877) $ 9,730 $ (250,783) (1) Included in computation of net periodic cost. See Note F - Pension and Other Post-Retirement Benefits for additional information. (2) Included in Cost of Products Sold and Interest Expense in the Consolidated Statements of Operations. See Note E - Derivatives and Hedging for additional information. (3) Included in Equity in Earnings of Affiliates in the Consolidated Statements of Operations. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities carried at fair value on a recurring basis | The Company’s financial assets and liabilities carried at fair value on a recurring basis and their level within the fair value hierarchy are presented in the tables below. Fair Value Measurements at January 28, 2024 In thousands Total Fair Quoted Prices Significant Significant Assets at Fair Value Cash and Cash Equivalents (1) $ 963,212 $ 957,910 $ 5,302 $ — Short-term Marketable Securities (2) 18,712 3,459 15,253 — Other Trading Securities (3) 199,690 — 199,690 — Commodity Derivatives (4) 5,365 7,767 (2,402) — Total Assets at Fair Value $ 1,186,979 $ 969,136 $ 217,844 $ — Liabilities at Fair Value Deferred Compensation (3) $ 60,658 $ — $ 60,658 $ — Total Liabilities at Fair Value $ 60,658 $ — $ 60,658 $ — Fair Value Measurements at October 29, 2023 In thousands Total Fair Quoted Prices Significant Significant Assets at Fair Value Cash and Cash Equivalents (1) $ 736,532 $ 735,387 $ 1,145 $ — Short-term Marketable Securities (2) 16,664 2,499 14,164 — Other Trading Securities (3) 188,162 — 188,162 — Commodity Derivatives (4) 9,330 9,603 (273) — Total Assets at Fair Value $ 950,688 $ 747,489 $ 203,199 $ — Liabilities at Fair Value Deferred Compensation (3) $ 55,222 $ — $ 55,222 $ — Total Liabilities at Fair Value $ 55,222 $ — $ 55,222 $ — 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 majority of the funds held in the rabbi trust relate to 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 as 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 Company’s deferred compensation plans, participants can defer certain types of compensation and elect to receive a return based on the changes in fair value of various investment options, which include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percent of the U.S. Internal Revenue Service (IRS) applicable federal rates. These liabilities are classified as Level 2. The Company maintains funding in the rabbi trust generally mirroring the selections within the deferred compensation plans. 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. These policies are classified as Level 2. The rabbi trust is included in Other Assets and deferred compensation liabilities in Other Long-term Liabilities on the Consolidated Condensed Statements of Financial Position. Securities held by the rabbi trust are classified as trading securities. Unrealized gains and losses associated with these investments are included in the Company's earnings. During the quarter ended January 28, 2024, securities held by the rabbi trust generated gains of $11.5 million, compared to gains of $7.0 million for the quarter ended January 29, 2023. (4) The Company’s commodity derivatives represent futures, swaps, and options contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn, natural gas, diesel fuel, hogs, and pork, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures and options 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. The Company holds natural gas, diesel fuel, and pork swap contracts that are over-the-counter instruments classified as Level 2. The value of the natural gas and diesel fuel swap contracts is calculated using quoted prices from the New York Mercantile Exchange, and the value of the pork swap contracts are calculated using a futures implied USDA estimated pork cut-out value. All derivatives are reviewed for potential credit risk and risk of nonperformance. The net balance for commodity derivatives is included in Other Current Assets or Accounts Payable, as appropriate, on the Consolidated Condensed Statements of Financial Position. As of January 28, 2024, the Company has recognized the right to reclaim net cash collateral of $24.5 million from various counterparties (including cash of $22.3 million plus $2.2 million of realized gain). As of October 29, 2023, the Company had recognized the right to reclaim net cash collateral of $32.2 million from various counterparties (including cash of $42.6 million less $10.4 million of realized loss). |
LONG-TERM DEBT AND OTHER BORR_2
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term Debt consists of: In thousands January 28, 2024 October 29, 2023 Senior Unsecured Notes, with Interest at 3.050% Interest Due Semi-annually through June 2051 Maturity Date $ 600,000 $ 600,000 Senior Unsecured Notes, with Interest at 1.800% Interest Due Semi-annually through June 2030 Maturity Date 1,000,000 1,000,000 Senior Unsecured Notes, with Interest at 1.700% Interest Due Semi-annually through June 2028 Maturity Date 750,000 750,000 Senior Unsecured Notes, with Interest at 0.650% Interest Due Semi-annually through June 2024 Maturity Date 950,000 950,000 Unamortized Discount on Senior Notes (6,832) (7,016) Unamortized Debt Issuance Costs (15,383) (16,278) Interest Rate Swap Liabilities (1) (4,327) (7,451) Finance Lease Liabilities 33,938 36,085 Other Financing Arrangements 3,811 3,908 Total 3,311,208 3,309,247 Less: Current Maturities of Long-term Debt 954,031 950,529 Long-term Debt Less Current Maturities $ 2,357,176 $ 2,358,719 (1) See Note E - Derivatives and Hedging for additional information. |
EARNINGS PER SHARE DATA (Tables
EARNINGS PER SHARE DATA (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of denominator for the computation of basic and diluted earnings per share | The shares used as the denominator for those computations are as follows: Quarter Ended In thousands January 28, 2024 January 29, 2023 Basic Weighted-average Shares Outstanding 547,020 546,384 Dilutive Potential Common Shares 900 3,647 Diluted Weighted-average Shares Outstanding 547,920 550,031 Antidilutive Potential Common Shares 17,892 3,239 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Jan. 28, 2024 | |
Segment Reporting [Abstract] | |
Schedule of sales and operating profits for each of the reportable segments and reconciliation to earnings before income taxes | Financial measures for each of the Company’s reportable segments and reconciliation to consolidated 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. Quarter Ended In thousands January 28, 2024 January 29, 2023 Net Sales Retail $ 1,911,272 $ 1,957,797 Foodservice 913,087 834,750 International 172,552 178,445 Total Net Sales $ 2,996,911 $ 2,970,992 Segment Profit Retail $ 149,505 $ 154,677 Foodservice 150,164 136,442 International 20,031 19,905 Total Segment Profit 319,700 311,025 Net Unallocated Expense 34,020 29,755 Noncontrolling Interest (134) (69) Earnings Before Income Taxes $ 285,547 $ 281,201 |
Schedule of total revenues contributed by sales channel | Total revenue contributed by classes of similar products are: Quarter Ended In thousands January 28, 2024 January 29, 2023 Perishable $ 2,106,571 $ 2,080,461 Shelf-stable 890,340 890,531 Total Net Sales $ 2,996,911 $ 2,970,992 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Changes in Carrying Amounts of Goodwill (Details) $ in Thousands | 3 Months Ended |
Jan. 28, 2024 USD ($) | |
Changes in the carrying amount of goodwill | |
Beginning Balance | $ 4,928,464 |
Foreign Currency Translation | 2,793 |
Ending Balance | 4,931,257 |
Retail | |
Changes in the carrying amount of goodwill | |
Beginning Balance | 2,916,796 |
Foreign Currency Translation | 0 |
Ending Balance | 2,916,796 |
Foodservice | |
Changes in the carrying amount of goodwill | |
Beginning Balance | 1,750,594 |
Foreign Currency Translation | 0 |
Ending Balance | 1,750,594 |
International | |
Changes in the carrying amount of goodwill | |
Beginning Balance | 261,074 |
Foreign Currency Translation | 2,793 |
Ending Balance | $ 263,867 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 29, 2023 |
Carrying amounts for indefinite-lived intangible assets | ||
Total | $ 1,631,468 | $ 1,631,098 |
Brands/Trade Names/Trademarks | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | 1,636,807 | 1,636,807 |
Other Intangibles | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | 184 | 184 |
Foreign Currency Translation | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | $ 5,523 | $ 5,893 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Definite Lived Intangibles Assets (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 29, 2023 |
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | $ 233,690 | $ 234,020 |
Accumulated Amortization | (112,002) | (107,947) |
Customer Lists/Relationships | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 168,239 | 168,239 |
Accumulated Amortization | (85,749) | (82,658) |
Other Intangibles | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 59,241 | 59,241 |
Accumulated Amortization | (16,919) | (15,857) |
Trade Names/Trademarks | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 6,210 | 6,540 |
Accumulated Amortization | (5,068) | (5,089) |
Foreign Currency Translation | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 0 | 0 |
Accumulated Amortization | $ (4,265) | $ (4,344) |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization Expense | $ 4,463 | $ 4,607 |
GOODWILL AND INTANGIBLE ASSET_6
GOODWILL AND INTANGIBLE ASSETS - Estimated Annual Amortization Expense (Details) $ in Thousands | Oct. 29, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 16,381 |
2025 | 14,681 |
2026 | 14,210 |
2027 | 13,940 |
2028 | $ 13,009 |
INVESTMENTS IN AFFILIATES - Sch
INVESTMENTS IN AFFILIATES - Schedule of Equity in Earnings of Affiliates (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Investments In and Receivables from Affiliates | ||
Total Equity in Earnings of Affiliates | $ 16,091 | $ 15,559 |
MegaMex Foods, LLC | ||
Investments In and Receivables from Affiliates | ||
% Owned | 50% | 50% |
Total Equity in Earnings of Affiliates | $ 8,091 | $ 13,681 |
Other Equity Method Investments | ||
Investments In and Receivables from Affiliates | ||
Total Equity in Earnings of Affiliates | $ 8,000 | $ 1,878 |
Other Equity Method Investments | Minimum | ||
Investments In and Receivables from Affiliates | ||
% Owned | 20% | 20% |
Other Equity Method Investments | Maximum | ||
Investments In and Receivables from Affiliates | ||
% Owned | 50% | 50% |
INVESTMENTS IN AFFILIATES - S_2
INVESTMENTS IN AFFILIATES - Schedule of Distributions Received from Equity Method Investees (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Investment, Affiliated Issuer | ||
Investments In and Receivables from Affiliates | ||
Dividends | $ 15,731 | $ 3,652 |
INVESTMENTS IN AFFILIATES - Nar
INVESTMENTS IN AFFILIATES - Narrative (Details) - USD ($) $ in Millions | Dec. 15, 2022 | Jan. 28, 2024 | Jan. 26, 2024 | Apr. 12, 2023 | Jan. 29, 2023 | Oct. 26, 2009 |
Garudafood | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 29% | 30% | ||||
Purchase price | $ 425.8 | |||||
Basis difference between fair value and carrying value of investment | $ 324.8 | $ 324.9 | ||||
Fair value | $ 279.4 | |||||
MegaMex Foods, LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50% | 50% | ||||
Basis difference between fair value and carrying value of investment | $ 9.1 | $ 21.3 |
INVENTORIES - Schedule of Princ
INVENTORIES - Schedule of Principal Components of Inventories (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 29, 2023 |
Inventory, Net [Abstract] | ||
Finished Products | $ 887,941 | $ 954,432 |
Raw Materials and Work-in-Process | 416,896 | 448,535 |
Operating Supplies | 161,174 | 168,289 |
Maintenance Materials and Parts | 112,181 | 109,151 |
Total Inventories | $ 1,578,191 | $ 1,680,406 |
DERIVATIVES AND HEDGING - Narra
DERIVATIVES AND HEDGING - Narrative (Details) $ in Millions | 3 Months Ended | |||
Jan. 28, 2024 USD ($) | Jul. 25, 2021 | Jan. 30, 2022 USD ($) | Apr. 25, 2021 USD ($) derivative | |
Commodity Contracts | ||||
Derivative [Line Items] | ||||
Hedging gains (losses) to be recognized within next twelve months | $ (17.3) | |||
Natural Gas | ||||
Derivative [Line Items] | ||||
Maximum length of time to hedge exposure | 2 years | |||
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 | |||
Interest Rate Locks | Derivatives designated as hedges | Cash Flow Hedges | ||||
Derivative [Line Items] | ||||
Number of hedging instruments | derivative | 2 | |||
Total notional amount of hedging | $ 1,250 | |||
Interest Rate Locks | Derivatives designated as hedges | Cash Flow Hedges | Minimum | ||||
Derivative [Line Items] | ||||
Tenor of hedging contracts | 7 years | |||
Interest Rate Locks | Derivatives designated as hedges | Cash Flow Hedges | Maximum | ||||
Derivative [Line Items] | ||||
Tenor of hedging contracts | 30 years | |||
Interest Rate Swap | Derivatives designated as hedges | Fair Value Hedges | ||||
Derivative [Line Items] | ||||
Total notional amount of hedging | $ 450 | |||
Interest Rate Contracts | ||||
Derivative [Line Items] | ||||
Hedging gains (losses) to be recognized within next twelve months | $ 12.2 |
DERIVATIVES AND HEDGING - Outst
DERIVATIVES AND HEDGING - Outstanding Commodity Future Contracts (Details) - Cash Flow Hedges - Derivatives designated as hedges lb in Millions, gal in Millions, bu in Millions, MMBTU in Millions | 3 Months Ended | 12 Months Ended |
Jan. 28, 2024 MMBTU lb gal bu | Oct. 29, 2023 MMBTU lb bu gal | |
Corn | ||
Derivative [Line Items] | ||
Futures contracts, volume (in bushels) | bu | 24.8 | 30.7 |
Futures contracts, volume (in gallons) | bu | 24.8 | 30.7 |
Lean Hogs | ||
Derivative [Line Items] | ||
Futures contracts, mass (in pounds) | lb | 158.2 | 144.2 |
Natural Gas | ||
Derivative [Line Items] | ||
Futures contracts, energy (in MMBTu) | MMBTU | 3.5 | 3 |
Diesel Fuel | ||
Derivative [Line Items] | ||
Futures contracts, volume (in bushels) | gal | 0.3 | 0 |
Futures contracts, volume (in gallons) | gal | 0.3 | 0 |
DERIVATIVES AND HEDGING - Fair
DERIVATIVES AND HEDGING - Fair Value of Derivatives (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 29, 2023 |
Derivatives fair value | ||
Right to reclaim net cash collateral | $ 24,500 | $ 32,200 |
Derivatives designated as hedges | Cash Flow Hedges | Commodity Contracts | Other Current Assets | ||
Derivatives fair value | ||
Gross fair value | $ (8,909) | $ (13,233) |
DERIVATIVES AND HEDGING - Fai_2
DERIVATIVES AND HEDGING - Fair Value Hedge Assets (Liabilities) (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 29, 2023 |
Derivatives fair value | ||
Cumulative basis adjustment of carrying amount of hedged portion of 2024 Notes | $ 4,327 | $ 7,451 |
Fair Value Hedges | Commodity Contracts | Accounts Payable | ||
Derivatives fair value | ||
Carrying amount of fair value hedged assets (liabilities) | (2,241) | (4,914) |
Fair Value Hedges | Interest Rate Contracts | Current Maturities of Long-term Debt | ||
Derivatives fair value | ||
Carrying amount of fair value hedged assets (liabilities) | $ (445,673) | $ (442,549) |
DERIVATIVES AND HEDGING - Effec
DERIVATIVES AND HEDGING - Effects on Accumulated Other Comprehensive Gains and Losses (Before Tax) of Derivative Instruments (Details) - Derivatives designated as hedges - Cash Flow Hedges - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Commodity Contracts | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Reclassified from AOCL into Earnings | $ (11,601) | $ 10,859 |
Interest Rate Contracts | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Reclassified from AOCL into Earnings | 247 | 247 |
Cost of Products Sold | Commodity Contracts | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Recognized in AOCL | (5,613) | (8,390) |
Gain/(Loss) Reclassified from AOCL into Earnings | (11,601) | 10,859 |
Cost of Products Sold | Corn Options | ||
Derivative instruments gains or losses (before tax) | ||
Excluded Component | 1,156 | 345 |
Excluded Component | 0 | 0 |
Interest Expense | Interest Rate Contracts | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Recognized in AOCL | 0 | 0 |
Gain/(Loss) Reclassified from AOCL into Earnings | $ 247 | $ 247 |
DERIVATIVES AND HEDGING - Conso
DERIVATIVES AND HEDGING - Consolidated Condensed Statements of Operations Impact of Gains or Losses on Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Derivative [Line Items] | ||
Net Earnings Attributable to Hormel Foods Corporation | $ 218,863 | $ 217,719 |
Fair Value Hedges | ||
Total Gain (Loss) Recognized in Earnings | (12,040) | 3,547 |
Derivatives designated as hedges | Commodity Contracts | ||
Fair Value Hedges | ||
Total Gain (Loss) Recognized in Earnings | (9,163) | 6,425 |
Derivatives designated as hedges | Interest Rate Contracts | ||
Fair Value Hedges | ||
Total Gain (Loss) Recognized in Earnings | (2,878) | (2,878) |
Derivatives designated as hedges | Cash Flow Hedges | Commodity Contracts | ||
Cash Flow Hedges | ||
Gain (Loss) Reclassified from AOCL | (11,601) | 10,859 |
Amortization of Excluded Component from Options | (1,156) | (1,412) |
Derivatives designated as hedges | Cash Flow Hedges | Interest Rate Contracts | ||
Cash Flow Hedges | ||
Gain (Loss) Reclassified from AOCL | 247 | 247 |
Derivatives designated as hedges | Fair Value Hedges | Commodity Contracts | ||
Fair Value Hedges | ||
Gain (loss) on Commodity Futures and Interest Rate Swap | 3,595 | (3,022) |
Derivatives designated as hedges | Fair Value Hedges | Interest Rate Contracts | ||
Fair Value Hedges | ||
Amortization of Loss Due to Discontinuance of Fair Value Hedge | $ (3,125) | $ (3,125) |
PENSION AND OTHER POST-RETIRE_3
PENSION AND OTHER POST-RETIREMENT BENEFITS - Schedule of Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Net periodic cost of defined benefit plans | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Investment Income | Interest and Investment Income |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Excluding Service Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Investment Income | Interest and Investment Income |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Investment Income | Interest and Investment Income |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Investment Income | Interest and Investment Income |
Pension Benefits | ||
Net periodic cost of defined benefit plans | ||
Service Cost | $ 9,053 | $ 8,902 |
Interest Cost | 18,336 | 17,157 |
Expected Return on Plan Assets | (19,377) | (19,571) |
Amortization of Prior Service Cost | (221) | (460) |
Recognized Actuarial (Gain) Loss | 3,316 | 3,325 |
Net Periodic Cost | 11,107 | 9,353 |
Post-retirement Benefits | ||
Net periodic cost of defined benefit plans | ||
Service Cost | 41 | 62 |
Interest Cost | 2,896 | 3,014 |
Amortization of Prior Service Cost | 2 | 2 |
Recognized Actuarial (Gain) Loss | (317) | (7) |
Net Periodic Cost | $ 2,622 | $ 3,070 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Components (Details) $ in Thousands | 3 Months Ended |
Jan. 28, 2024 USD ($) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | $ 7,734,885 |
Unrecognized Gains (Losses) | |
Gross | 11,347 |
Tax Effect | 1,074 |
Reclassification into Net Earnings | |
Gross | 12,496 |
Tax Effect | (3,448) |
Change Net of Tax | 21,469 |
Ending Balance | 7,844,111 |
Accumulated Other Comprehensive Loss | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (272,252) |
Reclassification into Net Earnings | |
Ending Balance | (250,783) |
Foreign Currency Translation | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (86,022) |
Unrecognized Gains (Losses) | |
Gross | 11,250 |
Tax Effect | 0 |
Reclassification into Net Earnings | |
Gross | 0 |
Tax Effect | 0 |
Change Net of Tax | 11,250 |
Ending Balance | (74,772) |
Pension & Other Benefits | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (183,993) |
Unrecognized Gains (Losses) | |
Gross | 32 |
Tax Effect | 0 |
Reclassification into Net Earnings | |
Gross | 2,780 |
Tax Effect | (683) |
Change Net of Tax | 2,129 |
Ending Balance | (181,863) |
Derivatives & Hedging | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (9,084) |
Unrecognized Gains (Losses) | |
Gross | (4,457) |
Tax Effect | 1,074 |
Reclassification into Net Earnings | |
Gross | 11,354 |
Tax Effect | (2,765) |
Change Net of Tax | 5,206 |
Ending Balance | (3,877) |
Equity Method Investments | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | 6,847 |
Unrecognized Gains (Losses) | |
Gross | 4,522 |
Tax Effect | 0 |
Reclassification into Net Earnings | |
Gross | (1,639) |
Tax Effect | 0 |
Change Net of Tax | 2,884 |
Ending Balance | $ 9,730 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Assets and Liabilities Carried at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 28, 2024 | Jan. 29, 2023 | Oct. 29, 2023 | |
Assets at Fair Value | |||
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets | |
Right To Reclaim Net Cash Collateral, Commodity Derivatives [Abstract] | |||
Right to reclaim net cash collateral | $ 24,500 | $ 32,200 | |
Right to reclaim cash, cash portion | 22,300 | ||
Realized gain (loss) on closed positions | 2,200 | (10,400) | |
Obligation to return net cash collateral, cash portion | 42,600 | ||
Rabbi trust | |||
Right To Reclaim Net Cash Collateral, Commodity Derivatives [Abstract] | |||
Gains (losses) related to securities held by the trust | 11,500 | $ 7,000 | |
Recurring basis | |||
Assets at Fair Value | |||
Cash and Cash Equivalents | 963,212 | 736,532 | |
Short-term Marketable Securities | 18,712 | 16,664 | |
Other Trading Securities | 199,690 | 188,162 | |
Commodity Derivatives | 5,365 | 9,330 | |
Total Assets at Fair Value | 1,186,979 | 950,688 | |
Liabilities at Fair Value | |||
Deferred Compensation | 60,658 | 55,222 | |
Total Liabilities at Fair Value | 60,658 | 55,222 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Assets at Fair Value | |||
Cash and Cash Equivalents | 957,910 | 735,387 | |
Short-term Marketable Securities | 3,459 | 2,499 | |
Other Trading Securities | 0 | 0 | |
Commodity Derivatives | 7,767 | 9,603 | |
Total Assets at Fair Value | 969,136 | 747,489 | |
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 | 5,302 | 1,145 | |
Short-term Marketable Securities | 15,253 | 14,164 | |
Other Trading Securities | 199,690 | 188,162 | |
Commodity Derivatives | (2,402) | (273) | |
Total Assets at Fair Value | 217,844 | 203,199 | |
Liabilities at Fair Value | |||
Deferred Compensation | 60,658 | 55,222 | |
Total Liabilities at Fair Value | 60,658 | 55,222 | |
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 | |
Commodity Derivatives | 0 | 0 | |
Total Assets at Fair Value | 0 | 0 | |
Liabilities at Fair Value | |||
Deferred Compensation | 0 | 0 | |
Total Liabilities at Fair Value | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Billions | Jan. 28, 2024 | Oct. 29, 2023 |
Fair Value Disclosures [Abstract] | ||
Fair value of long-term debt, utilizing discounted cash flows (Level 2) | $ 2.8 | $ 2.7 |
LONG-TERM DEBT AND OTHER BORR_3
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Jan. 28, 2024 | Oct. 29, 2023 | Jun. 03, 2021 | Jun. 11, 2020 |
Debt Instrument [Line Items] | ||||
Unamortized Debt Issuance Costs | $ (15,383) | $ (16,278) | ||
Interest Rate Swap Liabilities | (4,327) | (7,451) | ||
Finance Lease Liabilities | 33,938 | 36,085 | ||
Other Financing Arrangements | 3,811 | 3,908 | ||
Total | 3,311,208 | 3,309,247 | ||
Less: Current Maturities of Long-term Debt | 954,031 | 950,529 | ||
Long-term Debt Less Current Maturities | 2,357,176 | 2,358,719 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized Discount on Senior Notes | $ (6,832) | (7,016) | ||
Senior Notes | Senior Unsecured Notes, with Interest at 3.050% Interest Due Semi-annually through June 2051 Maturity Date | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.05% | 3.05% | ||
Senior Notes | $ 600,000 | 600,000 | ||
Senior Notes | Senior Unsecured Notes, with Interest at 1.800% Interest Due Semi-annually through June 2030 Maturity Date | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 1.80% | 1.80% | ||
Senior Notes | $ 1,000,000 | 1,000,000 | ||
Senior Notes | Senior Unsecured Notes, with Interest at 1.700% Interest Due Semi-annually through June 2028 Maturity Date | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 1.70% | 1.70% | ||
Senior Notes | $ 750,000 | 750,000 | ||
Senior Notes | Senior Unsecured Notes, with Interest at 0.650% Interest Due Semi-annually through June 2024 Maturity Date | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 0.65% | 0.65% | ||
Senior Notes | $ 950,000 | $ 950,000 |
LONG-TERM DEBT AND OTHER BORR_4
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS - Narrative (Details) | Apr. 17, 2023 interest_period extension_option | Jun. 03, 2021 USD ($) | May 06, 2021 USD ($) | Jun. 11, 2020 USD ($) | Feb. 29, 2024 USD ($) | Jan. 28, 2024 USD ($) | Oct. 29, 2023 USD ($) | Apr. 16, 2023 interest_period |
Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Approved long-term financing (up to) | $ 500,000,000 | |||||||
Senior Notes | 2024 Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount of debt issued | $ 950,000,000 | |||||||
Interest rate | 0.65% | 0.65% | ||||||
Period to redeem in whole or in part after the issuance date | 1 year | |||||||
Redemption price, percentage | 101% | |||||||
Senior Notes | 2028 Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount of debt issued | $ 750,000,000 | |||||||
Interest rate | 1.70% | 1.70% | ||||||
Redemption price, percentage | 101% | |||||||
Senior Notes | 2051 Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount of debt issued | $ 600,000,000 | |||||||
Interest rate | 3.05% | 3.05% | ||||||
Redemption price, percentage | 101% | |||||||
Senior Notes | Senior Unsecured Notes Due June 2030 | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount of debt issued | $ 1,000,000,000 | |||||||
Interest rate | 1.80% | 1.80% | ||||||
Redemption price, percentage | 101% | |||||||
Credit Facility | Unsecured Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing capacity under credit facility | $ 750,000,000 | |||||||
Additional uncommitted option under credit facility | $ 375,000,000 | |||||||
Number of extension options | extension_option | 2 | |||||||
Extension option, period | 1 year | |||||||
Number of permitted interest periods | interest_period | 15 | 8 | ||||||
Amount outstanding under credit facility | $ 0 | $ 0 | ||||||
Credit Facility | Unsecured Revolving Credit Facility | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable fee percentage for availability of line of credit | 0.05% | |||||||
Credit Facility | Unsecured Revolving Credit Facility | Minimum | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin over interest rate percentage | 0% | |||||||
Credit Facility | Unsecured Revolving Credit Facility | Minimum | Eurocurrency rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin over interest rate percentage | 0.575% | |||||||
Credit Facility | Unsecured Revolving Credit Facility | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable fee percentage for availability of line of credit | 0.10% | |||||||
Credit Facility | Unsecured Revolving Credit Facility | Maximum | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin over interest rate percentage | 0.15% | |||||||
Credit Facility | Unsecured Revolving Credit Facility | Maximum | Eurocurrency rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Margin over interest rate percentage | 1.15% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 23.40% | 22.60% |
Unrecognized tax benefits that would impact effective tax rate | $ 17.7 | $ 18.2 |
Accrued interest and penalties associated with unrecognized tax benefits | $ 2.7 | $ 2.6 |
EARNINGS PER SHARE DATA - Share
EARNINGS PER SHARE DATA - Shares Used as Denominator (Details) - shares shares in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Earnings Per Share [Abstract] | ||
Basic Weighted-average Shares Outstanding (in shares) | 547,020 | 546,384 |
Dilutive Potential Common Shares (in shares) | 900 | 3,647 |
Diluted Weighted-average Shares Outstanding (in shares) | 547,920 | 550,031 |
Antidilutive Potential Common Shares (in shares) | 17,892 | 3,239 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 3 Months Ended |
Jan. 28, 2024 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
SEGMENT REPORTING - Sales and O
SEGMENT REPORTING - Sales and Operating Profits for Each Reportable and Reconciliation to Earnings Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Operating profit and other financial information | ||
Total Net Sales | $ 2,996,911 | $ 2,970,992 |
Segment Profit | 284,438 | 289,452 |
Net Unallocated Expense | 34,020 | 29,755 |
Noncontrolling Interest | (134) | (69) |
Earnings Before Income Taxes | 285,547 | 281,201 |
Retail | ||
Operating profit and other financial information | ||
Total Net Sales | 1,911,272 | 1,957,797 |
Foodservice | ||
Operating profit and other financial information | ||
Total Net Sales | 913,087 | 834,750 |
International | ||
Operating profit and other financial information | ||
Total Net Sales | 172,552 | 178,445 |
Operating Segments | ||
Operating profit and other financial information | ||
Segment Profit | 319,700 | 311,025 |
Operating Segments | Retail | ||
Operating profit and other financial information | ||
Segment Profit | 149,505 | 154,677 |
Operating Segments | Foodservice | ||
Operating profit and other financial information | ||
Segment Profit | 150,164 | 136,442 |
Operating Segments | International | ||
Operating profit and other financial information | ||
Segment Profit | $ 20,031 | $ 19,905 |
SEGMENT REPORTING - Revenue Con
SEGMENT REPORTING - Revenue Contributed by Sales Channel (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 28, 2024 | Jan. 29, 2023 | |
Revenue from External Customer [Line Items] | ||
Total Net Sales | $ 2,996,911 | $ 2,970,992 |
Perishable | ||
Revenue from External Customer [Line Items] | ||
Total Net Sales | 2,106,571 | 2,080,461 |
Shelf-stable | ||
Revenue from External Customer [Line Items] | ||
Total Net Sales | $ 890,340 | $ 890,531 |