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Hormel Foods (HRL)

Participants
Jim Snee President, Chief Executive Officer
Jim Sheehan Executive Vice President, Chief Financial Officer
Jacinth Smiley Group Vice President, Corporate Strategy
Nathan Annis Director, Investor Relations
Rupesh Parikh Oppenheimer
Tom Palmer JP Morgan
Adam Samuelson Goldman Sachs
Eric Larson Seaport Research Partners
Ben Bienvenu Stephens
Ben Theurer Barclays
Robert Moskow Credit Suisse
Ken Zaslow Bank of Montreal
Peter Galbo Bank of America
Michael Lavery Piper Sandler
Carson Barnes Consumer Edge Research
Call transcript
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Operator

Good morning everyone and welcome to the Hormel Foods fourth quarter 2021 earnings webcast. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. Please also note today’s event is being recorded. like Director the of I’d to call time, Annis, Nathan Investor this to conference turn over At Relations. Sir, please go ahead.

Nathan Annis

to of released Good the around X:XX before Welcome the conference opened Foods morning. Eastern. call the fourth market quarter results fiscal our We am XXXX. this morning Hormel for

Chief a provide Board, copy detailed Chairman not Jacinth XXXX. commentary call Financial current and the you the the Investor on President President On January the the Officer will company’s our on Snee can perspective of Jim fiscal at find and future Sheehan Jim and you outlook. did Vice review provide results becomes of fourth President Smiley, Smiley X. conditions of website Strategy. under operating If it Corporate on is quarter, Officer, Group of Executive hormelfoods.com Snee, Jacinth Jim XXXX today and the and receive a fiscal Officer; Executive and Financial Executive on commentary release, will on Vice our Jacinth financial Chief President and Jim provide section. Vice company’s Sheehan, a Chief and will

of to As Jacinth’s will fourth contained the quarter week compared XXXX remarks. a opened extra for fiscal reminder, an line The following XXXX. fiscal be questions

to analysts, a one please other one the follow-up. As question courtesy limit yourself with to

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a diluted better These include Discussion earnings non-GAAP Additionally, released the now adjusted turn in uses detailed call press note our performance. the please organic is of will company sales, measures corporate on understanding provide information with website. over volume, and our organic per share. located the company’s investors non-GAAP on Jim operating results I to to Snee. non-GAAP

Jim Snee

decades built for company last that Orion, you under this our four morning has Project congratulating this Jim Thank accounting the the want so retirement. tenure start decades guiding was on behind come. at will an to and over company of his year, end everyone. Sheehan his CFO his morning call. Nathan. finance, force Good retiring be calendar has to will benefit earnings I Jim and initiative as with organization. upcoming Jim the be a will technology world-class Jim by our

our a also Jim’s oversight Jim’s transform he Equally our was our made we of a puts as to growth impressive reshaping evolution contribution divestitures company. to company. behind acquisition the portfolio strategic our over helped For Columbus, a years, me billion Jim Planters. Fontanini, $X last and to in XX over Jim as predecessors. complete largest Justin’s, the and been has Sadler’s, trusted ever, of with my five many acquisitions, [ph], CFO, our Seracci years us the force of foundation was many including partner to on for future guiding solid

shareholders. $X to distribution in billion Additionally, our dividends overseen Jim of over has the

retirement Strategy. In her fortunate and sincere of to as of changing fiscal and education such for an as our was new of to exceeding President provides outstanding Group children incredibly in compliance. free key Jim international his record business well domestic our Most in achieved Hormel Jean. behind Foods billion program Jacinth. deep In sales game-changing in Jim Hormel voice results. addition accolades, $XX rapidly wish Vice for experience role. looking will the public is billion forward to leadership the both Pathways Jim be operating to difficult congratulations experience and him served and $XX members. and CFO a brings her line and college wife, both succeeds environment, sales have and outside she time. team My his broad team the delivered missed, recently, accounting Inspired We with our in has top we from which Jim Corporate along areas and Jacinth XXXX, I’m as Foods. and first wealth Jacinth Smiley corporate She finance, in

$XX.X For the growth. sales sales increased basis, organic an year, On were sales full billion, XX% representing XX%.

our excellent businesses. growth Our to every Diluted an share food over for double-digit the pricing and levels every strong go-to-market performance channel in of and posted XX% in a performance Adjusted sales increased earnings records. to had was I quarter and by channels We volume Volume by XX%. all posted commend balanced for for from and quarter sales value-added led strong pressure demand share mix. records, cash want $X.XX. growth, organic share, earnings the incredibly and This our X%. record pricing, $X.XX We per diluted line flow XX%, Sales organic per in segments all-time increased almost fourth diluted record the was business was further and in year gains grew operations. entire channels quarter and delivering to record by in each sales segment volume as numerous driven X% numerous earnings including and XXXX, better record impressive quarter. by of underpinned sales, actions a increased increased category. and our XX% top challenges. sales team increased every per spite supply and grew this fourth pre-pandemic fourth service chain Compared acceleration consecutive inflationary full of

followed XX%. was levels. quarter with of Our foods, service Jennie-O significant third of refrigerated pre-pandemic growth XX% Turkey Store, sales from XX% the across growth higher contributions This food second teams XX% broad-based quarter, and MegaMex. Strength and the than posted organization for quarter

saw institutions. also including a in and our university K-XX non-commercial and We strong recovery segments, college

the remains products. positioned perfectly is differentiated the needs today’s believe to with of well in meet service operators portfolio service pandemic. and during a value food service proposition I food food as function industry Our in as our our time-saving the growth labor dedication of our

channel equally have double-digit line distributor The growth. and and the brands many channels XX%. consecutive of strong all Retail, operator many Growth increased second increased Columbus, and our including and decades-long XX% with sales other performances We basis, and grown our from strengthening relationships. delivered international partners areas recovery, our growth. each were during Compleats, deli Retail Label, top partnerships impressive. numerous a On and more. of year Applegate, came sales both Black international deli Wholly, each Gatherings, our across Hormel Hormel portfolio, an of organic posted Spam, from

IRI, see trends spending our rate According at indicates takeaway remained elevated favorable, has metrics per to key very positive such to consumer brands on as our buy products consumer which retail. remained. for continue We for and trips buyer

trays, continued also meat, including chili. share Hormel categories, We Pepperoni, party grow to and in Hormel important Hormel luncheon Spam many Gatherings

team supply job chain Our has constant supply operating navigating and chain disruptions. excellent in an done one

strategic positions the these a actions maximize more their facilities, In to an of top the have impact implemented increasing An record results meet We filled, allowing total, product quarter bottom earnings of open Planters strong to starting and customers. line acceleration our in growth. more positive to simplified portfolio. continued a number being the XX% our our led to and demand fourth namely a are being line per share, in to earnings actions, From our also seen XXXX. a of perspective, us addition were we’re the compared throughput the of automation see $X.XX our increase business

improvement. and to remain started quarter we see raw said costs further. increased more the in freight, the supplies fourth took margins effect. key of We Pricing levels, promotional compared and in and quarters; as labor the quarter, third profitable mix year-ago material improved raw Indeed, all above contributed freight materials margins four expected prior to case improve in the all pricing effectiveness, rates, in a actions, in As improved however, segments. to sequentially relief to we actions

grocery to Turkey projects growth. profit capacity The products, such year few of profit the from future and to Looking leverage bacon, the our Simple and the segment A products, highlights sausage. pandemic following. recently pizza addition of nuts growth. refrigerated growth and generated able Mexican and for foods double-digit segments Spam Jennie-O plans contributions costs. seventh posted at Refrigerated we from brand profits growth, team feed include higher quarter grocery due each to sales in segments, the delivered Within and excellent the start declined announced Meals Notably, its growth. business. Planters portfolios expansion categories Store volume, the capacity for foods snack additional to was international numerous dry since strong delivered the consecutive record a toppings, support the

team international their a two last internationally. achieved strong supports earnings this plans all of The seventh consecutive to aggressively record of growth over businesses. the quarter from has with expand business years results generated Our momentum our

Lastly, in convenience space store and the fast especially Planters snacking channel. within made the a positive impact growing entertaining and

on were results outstanding this into and momentum intend to we quarter’s build going This XXXX.

company channels. has pork with past company to with across brands evolved a from and heavy retail deliberately the Foods focus turkey a numerous decade, food commodity-driven on branded Over Hormel a meat-centric, global leading

focus more on and today needs company food-forward Our ever the of operators. sharp our with consumers a is customers, than

As we continue fiscal begin evolution. XXXX, to plan our we

across will complete the integration the business of all full Planters First, we functions.

R&D fully our remaining to has acquiring be be and XXXX. at great launched work and where first our three strengthens teams They the in the brand in The months Seeing packaging, teams refreshing future will ago, this and in flavors, further me able branding two the we products which have the also integrated hard been working more even the of are on six confident developing quarter production about work and many expectations, innovative is quarter. which take a in ’XX. and this out also we successfully performing was first of fiscal be expect our conviction end in new our marketing, the financial of and to at potential Planters. continue From standpoint, that business sales, for scheduled will top trend Planters our the integrated innovation, been facilities the Since year. and facilities rolled coming are have of Planters to fourth of

actions the term similar executed branded growth, successful strategy the value-added have years. the and over lower products. to efforts refrigerated to we optimized we starts more Second, profitability, of and of better The commodity we is our improved our a aligned time, turkey from series in operators result result past are shift expect foods taking at XX earnings consumers will accelerating Store. is in transformation long portfolio with to to and volatility. Jennie-O needs these This that Turkey that actions changing also demand-oriented a Over customers, in

As Wilmer, Team we our a the transition other an is commodity plant of Value-added also close fiscal members in which result, supplement half levels. staffing items. into and facility, facilities. consolidated to numerous facility Minnesota in be Wilmer, will in This older, products located first produces inefficient Avenue larger which located plant will newer will Benson multiple XXXX. the will

parent continue Finally, to integrate into Foods organization. we functions will business the Hormel

to be past other portfolio, very important will competitive is we Hormel offerings. organization. successfully efforts so, our balanced including of protein, functions. to Natural accounting, continue serves to clear IT HR business and Orion, expertise we an turkey Columbus, and turkey looking to are in lean for want two Over through and Choice, company who integrated versatile to and for Applegate, broader to the addition and in advantages our the Jennie-O important will organization many years, model, the Turkey the that Hormel for vital doing our we I team is brands, into and services, to have diversify continue will play deep Jennie-O. Project By the bring consumers finance role high these

financial further We on and and quarter components will provide a first timing details call. update the our on

great the between The Nebraska. Jennie-O having optimizing are foods with $XXX year needs are signing This supply we our split XXXX. flexibility we the at making new and supply of we rationale of Fremont actions success plant will Turkey the the Planters, value-added sales five-year progress a the with taking closely our refrigerated impact agreement this start in material we evolved The initiatives XXXX, are and our businesses a agreement effective evolve evolve to we amount our million chain with at contract as additional sell. a our reduction international more in and supply agreement be provide supply our reducing the will chain, all for have are pork margins. selling operate Project is the continued to our not we commodity by but agreement Fremont, with low to matches group. new our fresh into within in segments. such volatility. supplier increases earnings calendar we in Hormel new diversifies The experience next Store, how the Orion, how chain we from should chain, pork supply we only and commodity further while progress at company of continue supply approximately our commodity raw beyond, simultaneously our year continuing one insights away Foods digital as and portfolio Finally, on and pork decreases Similar result made us very This sales, of of pork for pork

net between be share and fiscal between billion and XXXX, billion and expect share. diluted be $XX.X to to $X.XX $XX.X $X.XX at earnings for we per Looking per sales

long over Smiley growth outlook. all four to At growth. fiscal discuss to financial for growth in our guidance call key our business. time, goals excess expect this I We quarter. regarding to I confidence each to will with of our in provide relating and across information ability to term Jacinth turn delivering color strength drivers more Planters our of achieve will Sheehan XXXX Jim segments our have due segments the our organic the in

Jim Sheehan

of full full XX% million billion for as Diluted pressures. sales taxes a $X.XX, the full a year. share you from in per XX% $XX.X the last and XX% year year. for increase compared earnings finish was Organic earnings was fourth share X% the of fourth year The inflationary XX% year led $X.XX last year. increase per was XXXX. $XXX X% respectively. This record over contributed increased taxes to diluted increased full fiscal Adjusted for record. before before inclusion Planters Strong despite a $X.XX. to to last of compared investments was Good sales strong the contributed Earnings refrigerated, Planters for company and improvement. XX% Diluted year. earnings quarter. of to Earnings to year. compared morning. quarter sales achieved Advertising sales to year. cost growth Strong was for ongoing in Thank $X.X the the last share per increased and X.X% and the the sales quarter the a full X.X% billion results Jim. for year international, increased percentage disciplined SG&A management the and

margins the each products results the effective margins As negatively costs to of exit we anticipated, third operating In market including one-time The in demand expenses a margins. acquisition compared result basis the to with the strong a XX.X% interest disciplined all effective cash quarter of quarter quarter actions. Segment continued to earnings deal Planters XXXX, shortages, tax as Operating the rate and XX.X% expanded for last XX.X% fourth flow the unallocated year. quarter and resulting XXX points for in quarter pricing primarily for increased as from an record, last a of as was labor our from impacted year. fourth increased result increases conditions higher compared of cost year capital working XXXX inflation, expense. Planters in are the The improved management. was fourth indication strong Net segment. by and

dividend against consecutive Planters, challenging the invest allowing protection the We year, $X.XX XX per grow an numerous dynamics XXXrd provided flow navigated effective business November during rate quarterly in acquire we the cash consistent and at dividend. share. paid model projects, to business and balanced of Our complex our capital annual and us

X% year of marking consecutive increase a the XXth announced for also increases. XXXX, dividend We

$XX million. with company shares expenditures X.X EBITDA. for The XXX,XXX debt million. XXXX billion $XXX ended Capital repurchased were company the $X.X or XXXX, approximately in During times

and feed of as for XX past to elevated supported we we markets Although XX% markets. XX% overcame fourth great pork no a by strong quarter. for to I investment-grade in meat affecting continued until a in significantly Hormel, We company historically expect am Jim conditions indicate payments Labor team low shortages thigh but X.X feed the estimates USDA end pricing de-leveraging X% XXXX. dynamic personal to the conditions than of pork of are EBITDA prices thankful company well. rating industry greatest pork, have shareholders reached tenure egg time, latest my in flat pork testament the pork cold market with CFO. with quarter take and year turn environment. The fourth during all-time factor excellent second ago. remained our privilege leave of I’ll over prices last production model, my of incremental on as better to may brands, for the decrease flow as trim mandatory significant power, make strength a prices required in our historical evolution you prices the community, year, levels, our composite higher I hands anticipate as quarter my company low during I remain Market be were the of Jacinth maintaining the based lower Turkey soon get quarter. appreciate highs accomplishments debt to beef for impact committed to will I XXXX, remain great over expectations to the compared increased the XX% year repayments know strong. The I cold fourth in the my in The and Hog enjoyed of for years. Smiley. compared analyst interactions an career to negatively remain and of and fiscal to in note industry future. X months. results execute next shortages these year. opportunity We this as strong is beef, wish I strong the costs coming whole and costs levels. cash trim times and volatile historically down storage the this the fundamentals at meat turkey, input in in half were I quarter. to for pride turkey were and storage XX% operating compared over the XXXX The context for to performance from the higher the confidence team demand year poult call above averaged above is her challenging also At USDA reach will year. compared by In Feed continue a and to the the you higher and third Jennie-O. and XXXX. my Belly, and levels. the to averaged directors during support the last the the XXXX, delivered working provide cut-out our the fourth the quarter Jacinth know placements, board and with on and for to relatively and and to Jacinth, have Snee, teams’ last costs to ability markets to production. guidance the XXXX XXXX. Higher Supporting the an labor were and career a last pressed year overview On decline sets. from with further balanced

Jacinth Smiley

you for morning everyone. kind words. Thank your Jim Good

Hormel brands, look excited role call, you on company the community For meeting the stepping In for commitment strength, am a forward the its Officer focus innovative the communities. Financial is months. Chief have have stakeholders. and in Foods known I I analysts be into at and a to found has results-driven and employees Hormel at Foods, the coming its and time that company, weeks and all to the I I investment financial its for powerhouse been to

a we from generate new anticipate XXXX As Planters our impact established the and strategic at on we the growth full fiscal in regarding our demand business. driven to from pandemic, the for pricing and throughout Building products, have key to we above segments, the such long improved earnings made the Jim second announced half drivers investor sales bit year actions, categories and outlook. four during to and investments expect mentioned, of share production the momentum year our goals We capacity October. throughput, commentary continued allow XXXX me fiscal toppings we term in the our the as the for update contribution growth all key dry pizza of by sausage, elevated more

expect note in improvement to can that also is to between We rapid show margins It profitability quarter. fourth costs the raw throughout year, important to material changes quarters. the in similar experienced the dynamic we operating input shift

invest advertising, sales in to leading for platforms, In $XXX marketing capacity target and capabilities innovation. we continue industry-leading addition in company’s expansions in to to is strong increases brands earnings drive for will and generating growth, our XXXX The capital high and growth through expenditures strategic million.

our We during are scheduled demand the food to our expansion pepperoni capacity service growing open which newest quarter, the second in in to facility and to Omaha will businesses. a meet needed retail provide

beginning on family be of expansion We are XXXX. for work products in the to operational Spam scheduled also another

XX% technology efficiencies. In addition to we larger invest automation we drive to innovation, in savings savings, to goal are and achieved our Pivoting in and term long cost XXXX. projects, to projects continuing these

our and our innovation for labor for and as near from complexities process forward as product at impacts Herdez, term Jennie-O complex chain goals. a the higher Hormel shortages, in and to strong to our such to of environment. stated continuous and Little the the operating platforms consistently guidance retail, These disruptions. service XXXX costs, and want brands I about environment in the operating platforms innovation confidence We The going in Plants accounts Skippy, have Black improvement addition as give remain Justin’s, achieve food us is fiscal speak Happy initiatives moment to expected supply for our the Planters, brands channel. well Label

to have challenges ways, the dynamic industry. enhanced for environment. solving job business done in has an many this strategies our we our inherent excellent day-to-day team In entire our Our competency executing

members flexibility have partnerships to and the team maximizing elevated and to meet many leveraging in possible. to hire to shortages have our are that labor our increased We the effect throughput maintain strategies most our demand produce includes This and increase of to efforts wherever mitigate manufacturing items developed demand.

manage one raw and logistics disruptions. Our further partnerships actively us impact procurement, team to material chain network supply minimize inflation our supply allows chain to to supply continue the of and

We from will expanded network, capacity has for benefit logistics the which grocery refrigerated also product our added business. and both

these As actions, expect branded and improved term fill of a is branded, we businesses a value-added strategy, announcement transformation result our away commodity The to rate another long actively towards step businesses. efforts of global load stronger continuing the company. in factors shift our in from are evolution we XXXX. fiscal our Store Turkey Consistent become food to with Jennie-O

and to earnings our guidance $XX.X account, year our intentional more to has sales create mentioned, full guidance all billion setting a these strategic are Taking and sustainable diluted business to we at of expect profitable our as $X.XX per billion We XX.X actions model. better, $X.XX. share factors into and Jim at

this reflects be Avenue raw weeks. the guidance XX.X%. Additionally, XX Fiscal and material tax an rate pork agreement, facility XX.X% new XXXX will our supply closure, Benson between and effective

a communities against to that I starts the far. of in live to This company. with XXXX work. commitment As pleased an execute safety employer continues company Jim we to branded are our remaining choice thus we and uncommon. my as evolve am I we says strategic with and move firsthand food to company often in imperatives our have unwavering with seen forward and be beyond, the global that employee in time a

corporate certainly ESG our standpoint. by We’re purposeful an on taking embark to transform our challenge, our ambitious yet, which from XX is journey as actions XX most company responsibility important we

will Our world, experienced initiative this added and the team, be Orion am and call success. part with our gives us members Project XXXX to in the to and I tireless the progress of ability the the question continued deliver the time, and around to the for implement of chain growth portion turn At one I answer confidence over beyond. fiscal our Hormel made Operator supply its excited of be team management Foods in work the and to call.

Operator

comes question from with ahead go Our instructions] question. Parikh first today your Rupesh [Operator Oppenheimer. from Please

Rupesh Parikh

my well. retirement and for morning, on Jim Good congrats thanks as Sheehan, taking questions, your

Jim Sheehan

you Thank Rupesh.

Rupesh Parikh

and I pricing versus start, you front, anything, have point, the pricing at this on seen versus actions elasticity you I where so can have if guess on expectations to maybe you are just just played the guess guys guys your expectations. far us front? how curious point with pricing the different your remind Just out

Jim Snee

Rupesh. morning good Yes,

executed We grocery that well up another demand The journey, where been is seen we pre-pandemic. of our elasticity implemented, right we have have typically the in would held our pricing not the really in got has pricing being portfolio, products the now. across portfolio are entire round and really that we’ve in midst of

that’s ebbs and that in markets some it pricing round business. for we implemented seen do getting now. refrigerated we’re model right flows, additional closely, at have but another relief we’ve part in our any a don’t On commodity products, scheduled and grocery time pricing so have - that that’s side, point watching in of But the this

Rupesh Parikh

then incorporating terms of just in that there on of anything for question range $X.XX the about you cadence great, half or Is could maybe what maybe just I operating second guidance. you half growth, share a year, EPS for versus this year? and in for Okay, and on the to first follow-up $X.XX that this is was still latest Planters guys curious are accretion.

Jim Snee

we we question the fiscal part just to expecting in first range, are range, that on the in XXXX. were of we’re be the the and Well, still of is like high end

to As margins the the see you’re XXXX, going about earnings of you the as year. course throughout think really just and throughout improving business sales,

load Jacinth As and in chain that the in help expect fill continual her do supply comments, to have will factors. rates improvement mentioned with we

quarters. part organic just driven that growth ’XX, the were markets the in Our to chain. by we between really volatility in will can is or improvement. we It that large have shift The supply in on thing as be profits for, be lookout

Rupesh Parikh

Thank you. great. Okay,

Operator

with question comes from Morgan. questions. Please next ahead JP Our Tom from go Palmer your

Tom Palmer

your and the morning, for on over the Jim, your for Good and questions, years thank you congratulations thanks help retirement.

Jim Sheehan

you Thank Tom.

Tom Palmer

have the least a earlier past we begin are a they costs spot months, flow what the on what through P&L? the see, can From point at this couple do At costs bit lower were year. pork eased in than Feed these basis. costs

Jim Sheehan

I fourth some especially Tom, saw, end helped momentum our that near declining these the think of with prices. you quarter

today, an trim they to fourth to so the are in seen the the instance, belly, see you’re range, easing ease mid-XX in for $XX seen You’ve You’ve already. hogs advantage off, you’ve quarter seen certainly down averaged starting and

You see, can as saw fourth the to good position in I we near quarter I a first and think new quarter, in quarter start said, we’re into into pick the year. fourth go so the of the you momentum up end the that that as

Tom Palmer

On also? on the just feed side

Jim Sheehan

our locked we’ve know, you Well in costs. feed

be We’re and under corn market the current feed our of it’s next for--we’ve locked in market, about for will stabilized under so costs XX% our year.

good a have We feed handle on the costs.

has months. have the last obviously risk You for few but basis basis neutral fairly exists, always that the been

Tom Palmer

we year. starting quarter, to first segments? growth translates four so thank up talked in If all Okay, in growth you’ve so first Should to, segments look on that in follow see the the that should for all could quarter in just expect the essentially coming I you. we what about in earnings

Jim Snee

quarter, seeing Yes show the full moves to do in right in Tom, remarks, you XXXX, them the to going in starting on QX. we describing expect the we’re that up fairly and segments so obviously throughout are flat in his all prepared be to but do the year but have some markets growth year, is as to lower we markets we first average would, some over now Jim and expect

Jim Sheehan

Tom, we of quarter pick third improvement in And you look XXXX, half Planters see didn’t year, first up you have of you’ll the at until Planters remember as - the last year. so the the significant

Tom Palmer

Understood, thank you again.

Operator

comes Samuelson Our with Please Sachs. question from your Adam from next ahead question. Goldman go

Adam Samuelson

Good morning Yes, everyone. thank you.

little about decision just just question of Let margin on business actions forward, could on little corollary basis with how and hoping cash a course sales me congratulations, close this bit next help the everyone’s of more on My on moving is changes to over a us was on Jim maybe to is you XX these a maybe that the the associated structure bit potential the echo retirement. the Jennie-O, mix Snee, Jennie-O Jim, if the costs I months. first think color a the plant. to elaborate get and

Jim Snee

Sure, you we’re so report to Adam, back will be more detailed so give things you. first a getting that QX in is information we the just of described, the that come to on and thing, going some you to you

seen thinking the we’re chain to this, an big company, thing turkey to the about, is portfolio, think one it opportunity actions this that Project It’s of - not all away I segments, away different going of our our important different really evolution effort, supply our brands. right? many to first move thing. strategic whether is across We’ve in many going duplication continue resources our of Orion, of company was that’s from in these part be the

in supply honest flew a moving the with work about we’re so fully Jennie-O right proper it coming kind this recent parts business, today oversupply other achieve. to a commodity-driven is that’s dealing demand, underperformed to us, think information feel still the created and more the on significant a it’s when of a long for to a trying first more to with in a that our consumer-driven to be a like the but We’ll in volatility journey It situation this the That’s or years, done. lot you sure QX, ourselves, a evolution part. business also back is team’s step what effort really we’ve that of in not as second that’s move the sustainable lot to business step The make make we’re really thing lack for us be on Really, bigger growth been we’ve business. face towards and of through integrated with group chain. has is company. engine to more of announcement of from how more a There managed of supply-driven term a allows

Adam Samuelson

and you’d to to unable wage terms are chain. any of flavor volume. who of in on really costs, production you Was Just frame the color. for accept right, could release issues orders out, that operations and had a follow-up are Any your script. both impact called labor’s we just a get comments labor have wondering the the dimensionalize labor? some All the rates? customers the in just helpful you trying if and that’s on Is way because the on the where that to managing supply labor challenges press Then in it of

Jim Snee

Sure.

that added taken We’ve story. this structure, had maintain to entire competitive rates our hourly new become wage not wage to our and so rates, across has We’re costs. very we’ve plant and

sourcing the an some really improvement that that improvements but going staffing facilities for refrigerated key dramatic us The work and here has in sure labor labor not where we’ve product so seen be, becoming done the seen in have labor setting is to improvement. is rates. traditional of foods and we I creative understand we’re our to you’ve you to The so we’re do, and rates, rely We really about quarter pools, the up the that’s to nice have team rates, that we’ve our key of need levels get of plants pool labor a the going labor had, are are that into thing plants in seen make you then pool throughout just over on so say our two as it helpful you’re still football is we some we’ve other meaning for in in think to progressed to non-traditional being really always but more grocery larger and head it’s we’re importantly really better us, how even have going been more seen a improvement fourth general. XXXX. plants that Two our XXXX. have spike talking job helpful. in labor our plants to improvement seen staffing the not hump, employee-friendly, I’m idea

Adam Samuelson

all pass helpful I’ll really that’s color. right, All it on, thank you.

Operator

Eric Our with Please from Larson Seaport next your question go Research Partners. question. comes ahead from

Eric Larson

very morning the to I’m congrats. question - that year very in a congratulations everyone, good to it’s and coveted trim, Yes, last well - all executive Jim you. you My to your position costs and sure help, industry, congratulations etc. food of input down It’s earned, for your really thank my so bacon, comes Jacinth, and

Jacinth talked volatility think and year. and a can’t time the the seen the long I industry that about I uncommon, we’ve I’ve been this doing last in remember for

even could what to headwind tailwind be input lot for of how is reflect your pricing potentially ’XX? much of costs but Your volatility going is, in a or the a pork

Jim Snee

Well of Eric, it a really more is timing issue.

described, where if what You markets QX, react those and priced uncommon the to. are markets see we we and will prepared watch think have--we have market--if markets be in right that think become to the commodity about and volatile to happens, now I you so we we the if need again, and we’ll

remember pricing and executing that additional to thing about sustain. of other that many this, products taken is and will in very The that talked our price pricing so we’re the pricing and is we’ve all increase, large times, of that we’ve in midst grocery sticky, by the the

service, the is do we where organization, refrigerated the tailwind the one, food react year. of today, pricing I course accordingly will so the obviously more we’ll a think over On comment that But your side, closely for watching says both fair we sit that commodity, in volatility track retail and a just there. be it’s that we underlying the

Jim Sheehan

you costs over demand on between trends really take year, as the look about done hasn’t those term spikes you a the job The and volatility that markets, for faced out talked products pricing earnings the we’ve of timing, is with failed. quarters the remarkable of last just increased used, we’ve Yes depending the you word. into rising at before, been our but Eric, if and the can we’ve volatility, the the key move

I we’ve been effective. our think a it’s pricing, think great with very job done I

have and to that really hurt the products as effectively it are will you trend, to you have are or at we value of the you consumer price term that long We that marketplace. really a by volatility will Hormel over this long-term shows and the times trend, accepted the but look help times, able into at

great been success. it’s a think I

Eric Larson

that a on if a give just Jim, got new you us with annually. you that? the was for or might I you’ve be range of it on ’XX, about note, worth pork for sales negative, Okay, want rough delta Fremont, either to thanks. that, commodity contract million think What that positive $XXX disclosed just

Jim Sheehan

depends that know this day what Well Eric, you’ve it it been in on business enough long to is.

Eric Larson

Right.

Jim Sheehan

insignificant very business. it’s Overall, to the

eliminating of here. volatility talked whatever take the commodity gave be be--you profitable, time of lot it but bit would a so we’ll some will longer a of days but and that us so the never a in there’s the and we’ve We’ve that for it’s of for positive, lack to less the days success little a talked know, significant longer products, that less about product volatility performance negative, it’s and it’s the products. really is commodity it so long very about selling around long is, no company, fact small, of time the difference lift this XXXX no not Some in was

step needed which first old an a was facility over capital. facility, the that was turning of The Fremont lot

of and needs, products point we value-added Our get matched to always value-added amount evolution process. is this of product goal the so to was an our the where a took our

Eric Larson

thanks. Okay,

way industry’s industry should the half. Just coming we of kind in at round the second that. be until margins? year won’t second that take one and half pricing weeks, is industry, profit last on pricing think probably the that margins quick Mills, is effective, I it? now to impact at When new literally to--is pricing have going we’re the I’m look a of more Is the at follow-up. taken everybody we the it’s The assuming gross - several not food stabilization to from enough the at have look fiscal of others January How rounds packaged place new-news General the you it your seeing and around your any look effect X, that, full way and announced

Jim Snee

additional pricing sure being--again, earlier, aware to varies, I pricing as and so we’re far, the of make that retention. through there. we’re be take about But We second that things on this. all as really the described have warrant. timing it but losing for Eric, in Jim always the We all of a consumer market about quarter quarter really of GP so about to pricing it’s of ready this, Through we’ve couple conditions from the Yes, the portfolio. still effect, that very not think actions terms to of as we taken want think a said, consumers feel it good, second on

Operator

comes question question. go Ben Bienvenu Please next from ahead Our your from Stephens. with

Ben Bienvenu

opportunity might morning, terms and about as how in sustained the dynamics so? earned. labor Jim much of and and have you about labor you the the doing ask, about returns Enjoy environment you, automate, and how think tight want good Sheehan, can thanks, about thoughts business that the automate, that current automating and informed you think what do more further the in what exist think to has could by to well your achieve how you retirement, congrats. Hey, I you

Jim Snee

that’s projects think but a helpful, been have very incredibly our a automation would some In about to so both we our and been Omaha, labor of supply that how factor nice cost component, mentioned facility we automation into But it’s the part opportunities. forward. existing we’ve Mark maybe vehicles. looked the When our accelerated spectrum. of going go about part, boxing last that’s the about to more a of starting Coffey an opportunity be and loaders, got a going say those equation in as have in XX the in video and the in, update had number to started number did that do lot talked always wasn’t facilities packaging previous other about the one projects multiple to his really find opportunity examples for talked you’re the and the blueprint. ends facility, opportunities, automation across of transfer think then the think put about you we’ve It’s we’ve demonstrating very, recent other think have into we’ve we’ve I whether has to which more automated do we’ve factor racking, that figured but facilities, XX of months, with that I our placement, to the we over with but other how got where investor and in automation talked need chain that. Ben, a newer and that so it during job than built blueprint it, package forward of years, of Yes important got had that been we’ve facilities, is be able we place, out you in I as automation you in a

allocating a develop perspective, think about way an but isn’t organization believe make to there operations. focus we helping out we support even our never long done, is it resources to There’s in to engineering from automation our get still a we’ve we’re but that in go, need As to sure automation, that keen existing a there. us identifying not had very very, really organization our in to there engineering lot we are be before that work that and only of we yet,

Ben Bienvenu

I reset come back on a we in first consolidation know capacity details the more just of volume to have of rid off Jennie-O. for going of facility you margins unused this Okay, as or that actions, and kind this the the that base which quarter, volume by forward, of thank enhance you you you’ll existing should result, grow a these today? get related capacity to with and is that. you is mean in second question My but we taking understand of

Jim Snee

Ben, answer, both. is The

what think back is your to of facilities just the we’ll make really, Jennie-O so terms going those what the are network, fully going that integration be have think question, this lines, forward, second I see we supply we’re really that generate sure optimizing our optimizing to as of assets capacity facility, but make perhaps we our be able line to that truly important really in for growth business it’s have we you’re network we parent do in all traditionally about leveraging a about part one to sure then business. utilize when turkey in chain you, leveraging our in company we talking expansion. Hormel come it’s Through resources, the our employed bacon to opportunities of how into been a a the

Operator

Theurer Our go Barclays. next Please with comes question ahead Ben from from your question.

Ben Theurer

thanks morning taking for question. Good and my

Jim I well, up can all on the follow in quickly retirement. enjoy. wanted As you best Hope to Planters.

XXXX in coming but to into the you’re in from basically the look that products, a accretion down there some time guess give from integration seeing of be costs. how range, of still a point I of feeling been into the you’ve it is products? high accretive profitability on Planters quarter a grocery grocery clearly margin and perspective you But an basis to over said the you we year-over-year in was us end going think the was You if can closer

Jim Snee

that there, model our Ben, think through acquisition the high answer we is perform to at I that best end range. and range, that we’ve accretion the $X.XX the at we comments of expect gave to that you time $X.XX of was indicated

to business really far. so is in already operating and come, that has lot the able to opportunities channel, of two from part But doing innovation mix convenience a The thought talked well, facility, is still contribute right be meeting in other grocery excited really, service it, branding, of store and do have we in The everything integrations the that’s what behind and will about that mean, forward or it foods. a We do business future. so refrigerated itself expectations. then, there’s why what - which to the course terms been about food integrating we’re flavors, gone Of would I it the so going is we’re going our contributed products one are has our in smoothly.

Ben Theurer

my around Planters new within seeing the big innovation, remember some lot and you’re perfect. you’ve other question as a the Okay, more really snacking. follow-up is leverage with I to potential talked products, opportunity Then the of about creating product, in categories an

term and something frame? this you positive very opportunities continue operations, Have more the months going have would to seen to a first out turn you time with is existing you opportunities, that couple be on? to it of business think grow medium that you and in of of any at to incremental do the is If to look combine snacking take where

Jim Snee

there’s two parts Sure, that. so to

we conversations as with front, an to we as retail what the exactly snacking we expected and fruitful and that’s on regards are how that different, retailers approach On having organization, in side. category more retail the a

back store thing food service same is channel, went get the pizza. of for sandwiches convenience was in with having happening past, you when convenience everything or much the On operators. or the conversations food - we we’re did store In the to house the different

like that some our because that stores of been have section things filling Planters, blocking gaps, to just about distribution of in to tackling we forward. when opened remain knew what business. it for talk with we of follow optimistic we all did able us. Now, together this the we piecing that’s up going we’re and we’d terms get on and retail we to has convenience and the Those parts be us and now for other something as There portfolio. able Again, the well you new basic are with about acquisition why was so holds acquired Skippy done the start

Operator

next with go from from Moskow Suisse. question. ahead Robert comes Credit Our Please question your

Robert Moskow

wishes or in the belly talk hope you prices never your again. I question. have Hi, to Jim, best retirement. for about thanks trim ever

Jim Sheehan

get Come to the hoping about to in I It’s Rob! trim and on! up do, prices. favorite my talk morning thing belly

Robert Moskow

the then? know business, get the here from from so help then how should core guidance. assume Why reduce growth the to maybe about me I the retiring and quick had, you and just which don’t across If with XXXX. base then can a and take I $X.XX costs Hang acquisition much it are forecasting in are are out have suppose and Maybe accretion math you think it? integration much earnings to that I ’XX growth the earnings of I around! core follow-up. strip is trick I for extra I Planters, like your I business, would I the $X.XX for also that, on week, so, you the you the should guidance, reduce if

Jacinth Smiley

definitely in puts we of do explained that about then some comments we do Jim, the $X.XX, of top expect end to and piece and sales so all with We pull have we XXrd to earnings year. and is through is both before my takes, have As $X.XX Planters Jim piece we that’s that the out, so so range it. and segments growth and next prepared week would again our at for a $X.XX, gave

with as we get sits sales growth to established we that, it have vary, margin long quarter, goals you growth at but Certainly do really expect will growth think and new to see day. quarter especially of capacity showing on I about with investor term and range should about, and in the organic our throughout that year. it and earnings talked we from the really talked coming to

Jim Snee

so Rob, of $X.XX to that the had $X.XX, of mentioned put clarification, We’ve costs. another want into as a there’s your you deal that talked add I point only model. about other just as thing would $X.XX there you is

Robert Moskow

Okay.

pre-tax, or--? you have far? How XXXX year-to-date deal the Regarding million in so $XX much did costs,

Jim Sheehan

million issues. $XX closer of It’s the to in all when you take

Robert Moskow

it, Got okay.

say second up because just compromised pricing. commodity so margins because of that would your to of of the just flow-through? Okay. quarter mathematics sales sales with first be but have of the second kind there, will and will quarters, be the of in it also gains dramatically profit your strongest biggest I last I sales think first quarter, and fair Is you’d maybe quarter the growth in guess couple

Jacinth Smiley

It’s right? that again, it would from shift the commodity-driven, about year can then why growth quarter. we stress do and feel and something to just from adding. organic in what say is depends, is and any the good it need watch the so really at expecting, out of we’re we that for, continue that time, I volatility, guess full Planters to that both flip I so we that’s point quarter There piece to but being

Jim Snee

Planters, quarters on your of $XXX to to $XXX Rob, is be big million zero the in basically year year, be you’re going quarters. part two million which the against for full the will first but because correct, last assessment two that first have--a will

Robert Moskow

wishes. Best okay. Great,

Operator

ahead question question. next of Ken Our Bank Montreal. Zaslow comes from Please from with go your

Ken Zaslow

good Rob well of best in good as Jim, Hey, well, retirement. luck took joke and everyone. luck my morning It but your deserved. is

Jim Sheehan

Thank you Ken.

Ken Zaslow

last utilization much and you’ll think regain inhibited Let and over low your of year, has in ask, by labor margin majority the me structure rates a just been you XXXX? do that how

Jim Snee

in been the the that of it’s been and you having volatile we’re week, the sure or film sudden things freight supply, There there’s to on there chain idea costs, environment commodity is might lot week-to-week or one cost. you year, basis are about when that as those, that are ingredients that quantifiable but things all packaging of those aren’t easily this right that up probably examples we a those, react built all Ken, costs, to you’re of showing planned in to those costs, about other as impact a supply a and sourcing when crazy make have have costs you’re and think into looking a not now. see, source

I probably--I to it so mean, have head ’XX there’s it’ll year, starts and think the hoping forwards, more chain, normalcy just we those of able and capture supply happen moderate throughout XXXX. as throughout think we’ll that entire as impact, will be of and go the I into backwards or be to more just we’re away those less an

Ken Zaslow

your turkey? contextualize actions, last do margins? how question, be actions How about enhance questions. my your you your that about points, the your that it two basis leave Then will you structurally worth but actions, margin Okay. in think turkey industry, I’ll will talking with That XXX? based do XXX is on enhancement I’m not the turkey much

Jim Snee

Yes, thanks things Ken. there. Two

first The in we’ll commodity piece business, less terms We’ll of you I really away from said, driver expect volatility more and color be--like nature creating all of the through business a give to what of moving for can lot going years. that that [indiscernible] you come from in you five QX the that we’ve this back last seen over is forward. the

Ken Zaslow

Be Great, guys. thank you well.

Operator

comes America. with Galbo question Bank your next Our from question. ahead of Peter from Please go

Peter Galbo

in prices, wanted for keep from pork a is Thanks it supply I you the you that detail the that’s XX,XXX historically we the and to Just morning. on understand all any Hey hog XX,XXX of the because Jim to over question. now, new to I understand I’ll know guess kind it cuts taking prices good price, we’re the about cut-out of I there buying Jim day? Wholestone and if carcasses equivalent just just a us trim Jacinth, at that help contract, bit pork one still and at disclosed because I think time. you buy about day belly you’re contract, of costs. how or some only should the not same more new priced buying differently, a are think

Jim Sheehan

Sure Peter.

hams, products for take during basically value-added the wouldn’t we we take There’s instance just are we we that and allows that onto for production. pass season, would about item you us we’d example, out the It be demand, the bellies, obviously That that If so through items agree an of market, our sell parts to to think in multiple hams hams. ribs. certain trim high need it, take. but for

Peter Galbo

baseline And is use? that contract that the still to Has XX,XXX number is expanded? whatever a good the equivalent hogs was, or

Jim Sheehan

baseline. Sure, good yes, that’s a

our instance, would all the not--we off certain that their are lines, take of would take would we of that things types hogs, and trim, take other we we various of For we there cuts would their needed production, of critical negative. When if commodity we because passed may and margins, or I being about positive not take XX,XXX inputs, think that’s any of look a you just--you the we at it’s product said, know, whether as commodity through, them hogs. just they’re meat

Peter Galbo

thanks very Jim. much, it, Got

Operator

go from Michael with Our next Lavery question comes from question. Piper Sandler. Please your ahead

Michael Lavery

on pepperoni come? two Wanted expansion touch in in guess within the all piece, we the there’s question the Thank does really and you, outlook capacity the things. is impact morning. Jacinth. if might to the might congrats, echo second and I’ll maybe maybe the maybe delays, Jim, potentially fit of bigger just getting guidance, that good any would there count is One that - Should XQ does I when bump-up the on capacity for at welcome guidance--how what any half? just be? the in expansion sense XQ to how any

Jim Snee

that the no going now, we’re for We’ve QX about Michael, put we that half operational XXXX. second numbers up have plant indication in really the being We’re are going very, delays still meet plan right it our it the the to so quarter, is getting ramp-up we’ve ability confident very to of see in and to our any and into in modeled back got XXXX. thinking so there you’re running,

Michael Lavery

Okay, great.

margin side, and got turning certainly Fremont you’ve mix on more the are the on you’ve Just of the it from favorably. productivity, pricing lift costs new touched looks like some contract, some and

it weight? cost the pricing most in As you build margin that can you seeing? piece to the How out the maybe moderation, what’s Is your similar you’re are the piece, build think plan, about to just is critical? point we it they do the

Jim Snee

so you’re Michael, But exactly our raw material we was some when the the pricing ability key, through pricing right seen. is very is very, of What that get describing, here did declines of get benefit - important. to we’ve the we’ll the

demonstrated we’ve on market other able of able the record track of combination think we of of expect those expand which a be things. again. margins declines, It’s to a I these to to side being do both

Michael Lavery

Okay, great. Thanks so much.

Operator

comes question question. go Please from from Research. next Our Consumer Carson with your Barnes Edge ahead

Carson Barnes

for question. the thanks Morning,

and it terms you cost, hedged that XXXX? curious do how the thinking in what Do like in as risk feed of or where see the costs you’re about the wages? packaging you transportation you’re Just exposed. see are for most Just or as sounds It part. biggest most

Jim Snee

The risk, is Carson, biggest the volatility.

in caught is that you to our increases, have packaging XXXX, plan increases and already. Really, we in show some freight where that that We built year to biggest like we’ve know the saw volatility it that poses this year. going we continue from get X, is sit really as expect here to of to again our risk more perspective today volatility on in the is we December the quarter XXXX, thing, the quarter throughout so into it’s

Carson Barnes

the for question. Thanks sense. Makes

Operator

to we’ll over today’s any session. the Ladies with and I’d floor turn back conclude management for question and the like remarks. closing answer team to gentlemen, that

Jim Snee

clear I for we lot work the enviable globe, position. incredibly you safe I you business that wish and for lot great a It’s holiday thank happy company into all accident. this of this XXXX. great of and all work by day. head put have result a momentum didn’t Well, in around joining our am momentum members season, It’s in morning. happen has our team us thankful and This very this hard of as a that our a a we of have by

Operator

today’s that with gentlemen, call. joining. we’ll conference and do you conclude Ladies for We thank

disconnect now may your lines. You