Hormel Foods FY 4Q15 Earnings Call Notes

Hormel Foods (HRL) Jeffrey Ettinger on Q4 2015 Results

Revenues down 18% in turkey segment because of Avian flu volumes. Have not experienced any new outbreaks

“Jennie-O Turkey Store fourth quarter segment profit declined 23% on an 18% sales decrease. For the full year, operating profit was up 1% and sales decreased 2%. Results were impacted by high pathogen avian influenza as flocks lost earlier this year created large volume shortfalls in operations and sales. We have now completed the repopulation of all of our turkey barns. We’ve not experienced any new outbreaks thus far into the fall migration of wild birds.

Turkey prices remain at record highs due to industry shortages

“While we have been able to purchase some turkey meat to partially offset flock losses, turkey breast prices remain at a record high due to overall industry shortages.”

We were able to refill barns, but will not be back to normal volumes for two more quarters

“We were able to completely refill our barns, but as we talked about before, the primary turkey for most of our value-added items is our tom turkeys. It’s a 22-week market cycle and so we will not been fully back to normalized volumes throughout the earliest of second quarter of fiscal 2016. ”

We should be able to resume our marketing campaigns by second half of next year

“the team has done the best job they can with making sure that we have the product allocated fairly among our customers in terms of what is available. And then ultimately as Jim indicated, if everything continues to go well and we don’t have any further outbreaks, we should be in a position by second half of next year to renew our successful Make The Switch advertising campaign and restimulate growth for Jennie-O Turkey Store brand”