COVER
COVER - shares | 3 Months Ended | |
Jan. 30, 2022 | Mar. 06, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-2402 | |
Entity Registrant Name | HORMEL FOODS CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 41-0319970 | |
Entity Address, Address Line One | 1 Hormel Place | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55912 | |
City Area Code | 507 | |
Local Phone Number | 437-5611 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | HRL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Smaller Reporting Company | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0000048465 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-30 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Common Stock $.1465 par value | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 544,997,610 | |
Common Stock Non-Voting $.01 par value | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 30, 2022 | Jan. 24, 2021 | |
Income Statement [Abstract] | ||
Net Sales | $ 3,044,358 | $ 2,461,147 |
Cost of Products Sold | 2,505,610 | 2,010,977 |
Gross Profit | 538,749 | 450,170 |
Selling, General and Administrative | 225,972 | 196,380 |
Equity in Earnings of Affiliates | 6,898 | 14,228 |
Operating Income | 319,675 | 268,018 |
Other Income and Expense: | ||
Interest and Investment Income | 3,869 | 17,291 |
Interest Expense | (14,640) | (8,227) |
Earnings Before Income Taxes | 308,904 | 277,082 |
Provision for Income Taxes | 69,194 | 54,687 |
Net Earnings | 239,710 | 222,395 |
Less: Net Earnings (Loss) Attributable to Noncontrolling Interest | 139 | 112 |
Net Earnings Attributable to Hormel Foods Corporation | $ 239,571 | $ 222,283 |
Net Earnings Per Share | ||
Basic (in dollars per share) | $ 0.44 | $ 0.41 |
Diluted (in dollars per share) | $ 0.44 | $ 0.41 |
Weighted-average Shares Outstanding | ||
Basic (in shares) | 542,680 | 539,913 |
Diluted (in shares) | 547,928 | 547,444 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 30, 2022 | Jan. 24, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net Earnings | $ 239,710 | $ 222,395 |
Other Comprehensive Income (Loss), Net of Tax: | ||
Foreign Currency Translation | 925 | 17,888 |
Pension and Other Benefits | 2,535 | 4,199 |
Deferred Hedging | 8,404 | 12,599 |
Total Other Comprehensive Income (Loss) | 11,864 | 34,686 |
Comprehensive Income | 251,574 | 257,081 |
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interest | 258 | 417 |
Comprehensive Income Attributable to Hormel Foods Corporation | $ 251,316 | $ 256,664 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Jan. 30, 2022 | Oct. 31, 2021 |
Current Assets | ||
Cash and Cash Equivalents | $ 824,434 | $ 613,530 |
Short-term Marketable Securities | 22,194 | 21,162 |
Accounts Receivable (Net of Allowance for Doubtful Accounts of $3,739 at January 30, 2022, and $4,033 at October 31, 2021) | 812,706 | 895,719 |
Inventories | 1,385,705 | 1,369,198 |
Taxes Receivable | 7,699 | 8,293 |
Prepaid Expenses and Other Current Assets | 40,614 | 39,914 |
Total Current Assets | 3,093,350 | 2,947,816 |
Goodwill | 4,928,139 | 4,929,102 |
Other Intangibles | 1,817,165 | 1,822,273 |
Pension Assets | 296,450 | 289,096 |
Investments In and Receivables from Affiliates | 286,493 | 299,019 |
Other Assets | 303,577 | 299,907 |
Property, Plant and Equipment | ||
Land | 74,992 | 72,133 |
Buildings | 1,339,344 | 1,332,881 |
Equipment | 2,473,366 | 2,415,063 |
Construction in Progress | 282,656 | 316,455 |
Less: Allowance for Depreciation | (2,068,524) | (2,027,414) |
Net Property, Plant and Equipment | 2,101,835 | 2,109,117 |
Total Assets | 12,827,009 | 12,696,329 |
Current Liabilities | ||
Accounts Payable and Accrued Expenses | 799,368 | 844,502 |
Accrued Marketing Expenses | 149,628 | 114,746 |
Employee Related Expenses | 214,350 | 269,327 |
Taxes Payable | 89,134 | 23,520 |
Interest and Dividends Payable | 154,024 | 154,803 |
Current Maturities of Long-term Debt | 8,829 | 8,756 |
Total Current Liabilities | 1,415,334 | 1,415,654 |
Long-term Debt Less Current Maturities | 3,309,150 | 3,315,147 |
Pension and Post-retirement Benefits | 547,779 | 546,362 |
Other Long-term Liabilities | 166,906 | 162,623 |
Deferred Income Taxes | 281,515 | 278,183 |
Shareholders' Investment | ||
Preferred Stock | 0 | 0 |
Additional Paid-in Capital | 377,708 | 360,336 |
Accumulated Other Comprehensive Loss | (265,524) | (277,269) |
Retained Earnings | 6,980,451 | 6,881,870 |
Hormel Foods Corporation Shareholders' Investment | 7,100,589 | 6,972,883 |
Noncontrolling Interest | 5,736 | 5,478 |
Total Shareholders' Investment | 7,106,325 | 6,978,360 |
Total Liabilities and Shareholders' Investment | 12,827,009 | 12,696,329 |
Common Stock Non-Voting | ||
Shareholders' Investment | ||
Common Stock | 0 | 0 |
Common Stock | ||
Shareholders' Investment | ||
Common Stock | $ 7,955 | $ 7,946 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION (PARENTHETICAL) - USD ($) $ in Thousands | Jan. 30, 2022 | Oct. 31, 2021 |
Accounts Receivable, Allowance for Doubtful Accounts | $ 3,739 | $ 4,033 |
Preferred Stock, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Authorized Shares (in shares) | 160,000,000 | 160,000,000 |
Preferred Stock, Issued Shares (in shares) | 0 | 0 |
Common Stock Non-Voting | ||
Common Stock, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Authorized Shares (in shares) | 400,000,000 | 400,000,000 |
Common Stock, Issued Shares (in shares) | 0 | 0 |
Common Stock | ||
Common Stock, Par Value (in dollars per share) | $ 0.01465 | $ 0.01465 |
Common Stock, Authorized Shares (in shares) | 1,600,000,000 | 1,600,000,000 |
Common Stock, Issued Shares (in shares) | 543,011,868 | 542,412,403 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 30, 2022 | Jan. 24, 2021 | |
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | $ 6,978,360 | $ 6,430,326 |
Net Earnings | 239,710 | 222,395 |
Other Comprehensive Income (Loss) | 11,864 | 34,686 |
Purchases of Common Stock | (8,837) | |
Stock-based Compensation Expense | 6,328 | 7,781 |
Exercise of Stock Options/Restricted Shares | 11,053 | 1,765 |
Shares Retired | 0 | |
Declared Cash Dividends | (140,990) | (132,389) |
Ending balance | $ 7,106,325 | $ 6,555,727 |
Common Stock | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance (in shares) | 542,412 | 539,887 |
Beginning balance | $ 7,946 | $ 7,909 |
Exercise of Stock Options/Restricted Shares (in shares) | 599 | 108 |
Exercise of Stock Options/Restricted Shares | $ 9 | $ 2 |
Shares Retired (in shares) | (199) | |
Shares Retired | $ (3) | |
Ending balance (in shares) | 543,012 | 539,796 |
Ending balance | $ 7,955 | $ 7,908 |
Treasury Stock | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance (in shares) | 0 | 0 |
Beginning balance | $ 0 | $ 0 |
Purchases of Common Stock (in shares) | (199) | |
Purchases of Common Stock | $ (8,837) | |
Shares Retired (in shares) | 199 | |
Shares Retired | $ 8,837 | |
Ending balance (in shares) | 0 | 0 |
Ending balance | $ 0 | $ 0 |
Additional Paid-in Capital | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | 360,336 | 289,554 |
Stock-based Compensation Expense | 6,328 | 7,781 |
Exercise of Stock Options/Restricted Shares | 11,044 | 1,763 |
Shares Retired | (110) | |
Ending balance | 377,708 | 298,988 |
Retained Earnings | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | 6,881,870 | 6,523,335 |
Net Earnings | 239,571 | 222,283 |
Shares Retired | (8,724) | |
Declared Cash Dividends | (140,990) | (132,389) |
Ending balance | 6,980,451 | 6,604,506 |
Accumulated Other Comprehensive Income (Loss) | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | (277,269) | (395,250) |
Other Comprehensive Income (Loss) | 11,745 | 34,381 |
Ending balance | (265,524) | (360,869) |
Non- controlling Interest | ||
Increase (Decrease) in Shareholders' Investment | ||
Beginning balance | 5,478 | 4,778 |
Net Earnings | 139 | 112 |
Other Comprehensive Income (Loss) | 119 | 305 |
Ending balance | $ 5,736 | $ 5,195 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT (PARENTHETICAL) - $ / shares | 3 Months Ended | |
Jan. 30, 2022 | Jan. 24, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Declared Cash Dividends (in dollars per share) | $ 0.2600 | $ 0.2450 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 30, 2022 | Jan. 24, 2021 | |
Operating Activities | ||
Net Earnings | $ 239,710 | $ 222,395 |
Adjustments to Reconcile to Net Cash Provided by Operating Activities: | ||
Depreciation | 52,406 | 41,395 |
Amortization | 11,874 | 9,648 |
Equity in Earnings of Affiliates | (6,898) | (14,228) |
Distributions Received from Equity Method Investees | 18,039 | 11,250 |
Provision for Deferred Income Taxes | 366 | 335 |
Loss (Gain) on Property/Equipment Sales and Plant Facilities | 1,593 | 1,388 |
Non-cash Investment Activities | 5,956 | (11,693) |
Stock-based Compensation Expense | 6,328 | 7,781 |
Changes in Operating Assets and Liabilities, Net of Acquisitions: | ||
Decrease (Increase) in Accounts Receivable | 85,079 | (3,444) |
Decrease (Increase) in Inventories | (16,251) | (11,876) |
Decrease (Increase) in Prepaid Expenses and Other Current Assets | 10,143 | 17,634 |
Increase (Decrease) in Pension and Post-retirement Benefits | (2,533) | 1,134 |
Increase (Decrease) in Accounts Payable and Accrued Expenses | (85,554) | (124,092) |
Increase (Decrease) in Net Income Taxes Payable | 63,498 | 58,059 |
Net Cash Provided by (Used in) Operating Activities | 383,756 | 205,686 |
Investing Activities | ||
Net (Purchase) Sale of Securities | (1,611) | (206) |
Purchases of Property and Equipment | (49,747) | (40,363) |
Proceeds from Sales of Property and Equipment | 388 | 1,461 |
Decrease (Increase) in Investments, Equity in Affiliates, and Other Assets | 1,290 | (1,149) |
Proceeds from Company-owned Life Insurance | 0 | 956 |
Net Cash Provided by (Used in) Investing Activities | (49,680) | (39,301) |
Financing Activities | ||
Repayments of Long-term Debt and Finance Leases | (2,163) | (2,165) |
Dividends Paid on Common Stock | (132,909) | (125,516) |
Share Repurchase | 0 | (8,837) |
Proceeds from Exercise of Stock Options | 11,053 | 1,765 |
Net Cash Provided by (Used in) Financing Activities | (124,019) | (134,754) |
Effect of Exchange Rate Changes on Cash | 846 | 5,600 |
Increase (Decrease) in Cash and Cash Equivalents | 210,904 | 37,232 |
Cash and Cash Equivalents at Beginning of Year | 613,530 | 1,714,309 |
Cash and Cash Equivalents at End of Quarter | $ 824,434 | $ 1,751,541 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jan. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The accompanying unaudited consolidated financial statements of Hormel Foods Corporation (the Company) have been prepared in accordance with accounting principles generally accepted in the United States 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 generally accepted accounting principles 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 footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2021. The significant accounting policies used in preparing these Consolidated Financial Statements are consistent with those described in Note A - Summary of Significant Accounting Policies to the Consolidated Financial Statements in the Form 10-K with the exception of new requirements adopted in the first quarter of fiscal 2022. The Company has considered the impact of COVID-19 and determined there have been no material changes in the Company’s significant accounting policies, including estimates and assumptions, as disclosed in its Annual Report on Form 10-K for the fiscal year ended October 31, 2021. Fiscal Year: The Company’s fiscal year ends on the last Sunday in October. Fiscal 2022 consists of 52 weeks. Fiscal 2021 consisted of 53 weeks with the additional week occurring in the fourth quarter. 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. Accounting Changes and Recent Accounting Pronouncements: New Accounting Pronouncements Adopted in Current Fiscal Year In December 2019, the FASB issued ASU 2019-12, Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740) . The updated guidance simplifies the accounting for income taxes by removing certain exceptions in Topic 740 and clarifying and amending existing guidance. The amendments are effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2022 and adoption did not have a material impact on its consolidated financial statements. New Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). The guidance provides optional expedients and exceptions to account for contracts, hedging relationships, and other transactions that reference London Interbank Referenced Rate (LIBOR) or another reference rate expected to be discontinued. The optional guidance can be applied from March 12, 2020 through December 31, 2022. The Company is currently assessing the impact the updated provisions will have on the consolidated financial statements. |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 3 Months Ended |
Jan. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES Acquisitions: On June 7, 2021, the Company acquired the Planters ® snack nuts business from The Kraft Heinz Company. The acquisition includes the Planters ® , NUT-rition ® , and Corn Nuts ® brands. The final purchase price, including working capital adjustments, was $3.4 billion. The transaction was funded with the Company’s cash on hand and from the issuance of long-term debt. Planters ® is an iconic snack brand and this acquisition significantly expands the Company's presence, and should broaden the scope for future acquisitions, in the growing snacking space. Operating results for this acquisition have been included in the Company's Consolidated Statements of Operations from the date of acquisition and are reflected in the Grocery Products, Refrigerated Foods, and International & Other segments. The acquisition contributed $271.8 million of net sales during the first quarter of fiscal 2022. As the acquisition has been integrated within the Company's existing operations, post-acquisition net income is not discernible. The acquisition was accounted for as a business combination using the acquisition method. The Company determined the acquisition date fair values of the assets acquired using independent appraisals. The Company completed purchase accounting allocations in the fourth quarter of fiscal 2021. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Jan. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill: The changes in the carrying amounts of goodwill for the quarter ended January 30, 2022, are: in thousands Grocery Refrigerated Jennie-O International Total Balance at October 31, 2021 $ 2,398,354 $ 2,094,421 $ 176,628 $ 259,699 $ 4,929,102 Foreign Currency Translation — — — (962) (962) Balance at January 30, 2022 $ 2,398,354 $ 2,094,421 $ 176,628 $ 258,737 $ 4,928,139 Intangible Assets: The carrying amounts for indefinite-lived intangible assets are: in thousands January 30, 2022 October 31, 2021 Brands/Tradenames/Trademarks $ 1,665,190 $ 1,665,190 Other Intangibles 184 184 Foreign Currency Translation (6,857) (6,646) Total $ 1,658,517 $ 1,658,728 The gross carrying amount and accumulated amortization for definite-lived intangible assets are: January 30, 2022 October 31, 2021 in thousands Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer Lists/Relationships $ 168,239 $ (60,092) $ 168,239 $ (56,882) Other Intangibles 59,241 (8,418) 60,241 (8,356) Tradenames/Trademarks 10,536 (6,237) 10,536 (5,700) Foreign Currency Translation — (4,620) — (4,534) Total $ 238,016 $ (79,368) $ 239,016 $ (75,471) Amortization expense was $4.8 million for the quarter ended January 30, 2022, compared to $4.0 million for the quarter ended January 24, 2021. Estimated annual amortization expense for the five fiscal years after October 31, 2021, is as follows: in thousands Amortization Expense 2022 $ 19,244 2023 18,351 2024 16,352 2025 14,627 2026 14,170 |
INVESTMENTS IN AND RECEIVABLES
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES | 3 Months Ended |
Jan. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES | INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES The Company accounts for its majority-owned operations under the consolidation method. Investments in which the Company owns a minority interest and for which there are no other indicators of control are accounted for under the equity or cost method. These investments, along with any related receivables from affiliates, are included in the Consolidated Condensed Statements of Financial Position as Investments In and Receivables From Affiliates. Investments In and Receivables From Affiliates consist of: in thousands Segment % Owned January 30, 2022 October 31, 2021 MegaMex Foods, LLC Grocery Products 50% $ 197,935 $ 205,413 Other Joint Ventures International & Other Various (20-40%) 88,558 93,606 Total $ 286,493 $ 299,019 Equity in Earnings of Affiliates consists of: Quarter Ended in thousands Segment January 30, 2022 January 24, 2021 MegaMex Foods, LLC Grocery Products $ 6,995 $ 12,433 Other Joint Ventures International & Other (97) 1,794 Total $ 6,898 $ 14,228 For the quarter ended January 30, 2022, $18.0 million of dividends were received from affiliates, compared to $11.3 million of dividends received for the quarter ended January 24, 2021. The Company recognized a basis difference of $21.3 million associated with the formation of MegaMex Foods, LLC, of which $10.8 million is remaining as of January 30, 2022. This difference is being amortized through Equity in Earnings of Affiliates. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Jan. 30, 2022 | |
Inventory, Net [Abstract] | |
INVENTORIES | INVENTORIES Principal components of inventories are: in thousands January 30, 2022 October 31, 2021 Finished Products $ 700,026 $ 725,115 Raw Materials and Work-in-Process 416,013 395,403 Operating Supplies 181,608 163,416 Maintenance Materials and Parts 88,057 85,264 Total $ 1,385,705 $ 1,369,198 |
DERIVATIVES AND HEDGING
DERIVATIVES AND HEDGING | 3 Months Ended |
Jan. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING | DERIVATIVES AND HEDGING The Company uses hedging programs to manage price risk associated with commodity purchases 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. Cash Flow Commodity Hedges: The Company designates grain and lean hog futures, swaps, and options used to offset price fluctuations in the Company’s future direct grain and hog purchases as cash flow hedges. Effective gains or losses related to these cash flow hedges are reported in Accumulated Other Comprehensive Loss (AOCL) and reclassified into earnings, through Cost of Products Sold, in the periods in which the hedged transactions affect earnings. The Company typically does not hedge its grain 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 commodity suppliers as fair value hedges. The intent of the program is to make the forward priced commodities cost nearly the same as cash market purchases at the date of delivery. Changes in the fair value of the futures contracts, along with the gain or loss on the hedged purchase commitment, are marked-to-market through earnings and recorded on the Consolidated Condensed Statements of Financial Position as a Current Asset and Current Liability, respectively. Effective 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 designates the last $450 million of the notes due June 2024 (the “2024 Notes”). The swap compounds quarterly and settles semi-annually with gains and losses recognized in earnings through interest expense. Mark-to-market changes in the fair value of the interest rate swap and hedged debt are also recognized as interest expense. Other Derivatives: The Company holds certain futures contract positions as part of a merchandising program and to manage the Company’s exposure to fluctuations in commodity markets. The Company has not applied hedge accounting to these positions. Activity related to derivatives not designated as hedges is immaterial to the consolidated financial statements. Volume: The Company's outstanding contracts related to its commodity hedging programs include: Volume Commodity Contracts January 30, 2022 October 31, 2021 Corn 34.0 million bushels 33.1 million bushels Lean Hogs 132.6 million pounds 120.0 million pounds Fair Value of Derivatives: The fair values of the Company’s derivative instruments designated as hedges are: Gross Fair Value in thousands Location on Consolidated Condensed Statements of Financial Position January 30, 2022 October 31, 2021 Derivatives Designated as Hedges: Commodity Contracts (1) Other Current Assets $ 27,819 $ 21,798 Interest Rate Contracts Interest and Dividends Payable (4,949) — (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 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 in the Consolidated Condensed Statements of Financial Position. The gross asset position as of January 30, 2022 is offset by the obligation to return net cash collateral of $16.8 million contained within the master netting arrangement. The gross asset position as of October 31, 2021 is offset by the obligation to return net cash collateral of $10.8 million. See Note I - Fair Value Measurements for a discussion of these net amounts as reported in 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: Carrying Amount of Hedged in thousands Location on Consolidated Condensed Statements of Financial Position January 30, 2022 October 31, 2021 Fair Value Hedges: Commodity Contracts Accounts Payable (1) $ 8,262 $ 3,432 Interest Rate Contracts Long-term Debt - Less Current Maturities (2) (445,051) — (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 30, 2022, a cumulative basis adjustment of $4.9 million has been included in the carrying amount. Accumulated Other Comprehensive Loss Impact: As of January 30, 2022, the Company included in AOCL hedging gains (before tax) of $43.3 million on commodity contracts and $14.2 million related to interest rate settled positions. The Company expects to recognize the majority of the gains on commodity contracts over the next twelve months. Gains on interest rate contracts offset the hedged interest payments over the tenor of the debt instruments. The effect of 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 Consolidated Statements of Operations Quarter Ended Quarter Ended in thousands January 30, 2022 January 24, 2021 January 30, 2022 January 24, 2021 Cash Flow Hedges: Commodity Contracts $ 20,279 $ 16,552 $ 7,746 $ (50) Cost of Products Sold Excluded Component (2) (1,172) — — — Interest Rate Contracts — — 247 — Interest Expense (1) See Note H - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. (2) Represents the time value of corn 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: Consolidated Statements of Operations Impact Quarter Ended in thousands January 30, 2022 January 24, 2021 Net Earnings Attributable to Hormel Foods Corporation $ 239,571 $ 222,283 Cash Flow Hedges - Commodity Contracts Gain (Loss) Reclassified from AOCL 7,746 (50) Amortization of Excluded Component from Options (825) — Fair Value Hedges - Commodity Contracts Gain (Loss) on Commodity Futures (1) (3,650) (2,913) Total Gain (Loss) on Commodity Contracts (2) $ 3,271 $ (2,963) Cash Flow Hedges - Interest Rate Locks Amortization of Gain on Interest Rate Locks 247 — Fair Value Hedge - Interest Rate Swap Gain (Loss) on Interest Rate Swap 792 — Total Gain on Interest Rate Contracts (3) $ 1,039 $ — Total Gain (Loss) Recognized in Earnings $ 4,310 $ (2,963) (1) Amounts represent gains or losses on commodity contracts designated as fair value hedges that were closed during the thirteen weeks ended January 30, 2022, 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) 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. 30, 2022 | |
Retirement Benefits [Abstract] | |
PENSION AND OTHER POST-RETIREMENT BENEFITS | PENSION AND OTHER POST-RETIREMENT BENEFITS Net periodic benefit cost for pension and other post-retirement benefit plans consists of: Pension Benefits Quarter Ended in thousands January 30, 2022 January 24, 2021 Service Cost $ 10,019 $ 9,107 Interest Cost 12,640 12,362 Expected Return on Plan Assets (27,062) (25,189) Amortization of Prior Service Cost (374) (367) Recognized Actuarial Loss 3,132 5,578 Net Periodic Cost $ (1,645) $ 1,491 Post-retirement Benefits Quarter Ended in thousands January 30, 2022 January 24, 2021 Service Cost $ 117 $ 131 Interest Cost 1,919 1,948 Amortization of Prior Service Cost 2 (164) Recognized Actuarial Loss 610 496 Net Periodic Cost $ 2,648 $ 2,411 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Jan. 30, 2022 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS Components of Accumulated Other Comprehensive Loss are: in thousands Foreign Pension & Derivatives & Hedging Accumulated Balance at October 31, 2021 $ (51,181) $ (261,211) $ 35,123 $ (277,269) Unrecognized Gains (Losses) Gross 806 (8) 19,107 19,905 Tax Effect — — (4,654) (4,654) Reclassification into Net Earnings Gross — 3,370 (1) (7,993) (2) (4,623) Tax Effect — (827) 1,944 1,117 Net of Tax Amount 806 2,535 8,404 11,745 Balance at January 30, 2022 $ (50,375) $ (258,676) $ 43,527 $ (265,524) (1) Included in the computation of net periodic cost. See Note G - 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 F - Derivatives and Hedging for additional information. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Jan. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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 as of January 30, 2022, and October 31, 2021, and their level within the fair value hierarchy are presented in the table below. Fair Value Measurements at January 30, 2022 in thousands Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets at Fair Value Cash and Cash Equivalents (1) $ 824,434 $ 822,314 $ 2,120 $ — Short-term Marketable Securities (2) 22,194 10,443 11,751 — Other Trading Securities (3) 197,644 — 197,644 — Commodity Derivatives (4) 13,218 7,043 6,175 — Total Assets at Fair Value $ 1,057,490 $ 839,800 $ 217,690 $ — Liabilities at Fair Value Deferred Compensation (3) $ 67,434 $ — $ 67,434 $ — Interest Rate Derivatives (5) 4,949 — 4,949 — Total Liabilities at Fair Value $ 72,383 $ — $ 72,383 $ — Fair Value Measurements at October 31, 2021 in thousands Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets at Fair Value Cash and Cash Equivalents (1) $ 613,530 $ 611,111 $ 2,419 $ — Short-term Marketable Securities (2) 21,162 8,790 12,372 — Other Trading Securities (3) 203,020 — 203,020 — Commodity Derivatives (4) 13,522 8,104 5,418 — Total Assets at Fair Value $ 851,234 $ 628,005 $ 223,229 $ — Liabilities at Fair Value Deferred Compensation (3) $ 70,466 $ — $ 70,466 $ — Total Liabilities at Fair Value $ 70,466 $ — $ 70,466 $ — 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, 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 percentage of the I.R.S. 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 30, 2022, securities held by the rabbi trust generated losses of $5.4 million, compared to a gain of $11.8 million for the quarter ended January 24, 2021. (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 and hogs, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available, and these contracts are classified as Level 1. The Company’s corn futures option contracts are OTC instruments classified as Level 2 whose value is calculated using the Black-Scholes pricing model, corn future prices quoted from the Chicago Board of Trade, and other adjustments to inputs that are observable in active markets. All derivatives are reviewed for potential credit risk and risk of nonperformance. The net balance for each program is included in Other Current Assets or Accounts Payable, as appropriate, in the Consolidated Condensed Statements of Financial Position. As of January 30, 2022, the Company has recognized the obligation to return net cash collateral of $16.8 million from various counterparties (including cash of $18.7 million less $1.9 million of realized gain). As of October 31, 2021, the Company had recognized the obligation to return net cash collateral of $10.8 million from various counterparties (including cash of $45.6 million less $34.8 million of realized gain). (5) The Company holds an interest rate hedging position to minimize the risk related to future interest rate changes. The fair value of the outstanding interest rate hedge agreement is based on an observable benchmark interest rate (LIBOR) and therefore classified as Level 2. The Company’s financial assets and liabilities include accounts receivable, accounts payable, and other liabilities, for which carrying value approximates fair value. The Company does not carry its long-term debt at fair value in its Consolidated Condensed Statements of Financial Position. The fair value of long-term debt, utilizing discounted cash flows (Level 2), was $3.2 billion as of January 30, 2022, and $3.3 billion as of October 31, 2021. See Note J - Long Term Debt and Other Borrowing Arrangements for additional information. |
LONG-TERM DEBT AND OTHER BORROW
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS | 3 Months Ended |
Jan. 30, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS | LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS Long-term Debt consists of: in thousands January 30, 2022 October 31, 2021 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 (8,301) (8,484) Unamortized Debt Issuance Costs (22,540) (23,435) Interest Rate Swap (4,949) — Finance Lease Liabilities 51,042 52,999 Other Financing Arrangements 2,726 2,823 Total $ 3,317,979 $ 3,323,903 Less: Current Maturities of Long-term Debt 8,829 8,756 Long-term Debt Less Current Maturities $ 3,309,150 $ 3,315,147 Senior Unsecured Notes: On June 11, 2020, the Company issued senior notes in an aggregate principal amount of $1.0 billion, due June 11, 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. On June 3, 2021, the Company issued $950.0 million aggregate principal amount of its 0.650% notes due 2024 (the "2024 Notes"), $750.0 million aggregate principal amount of its 1.700% notes due 2028 (the "2028 Notes") and $600.0 million aggregate principal amount of its 3.050% notes due 2051 (the "2051 Notes"). 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. In the first quarter of fiscal 2022, the Company entered into an interest rate swap with a notional amount totaling $450.0 million effectively converting a portion of the 2024 Notes from a fixed to variable rate basis. The interest rate swap was designated as a fair value hedge of the underlying debt obligation. See Note F - Derivatives and Hedging for additional details. 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. 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. 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. In connection with entering the revolving credit agreement, the Company terminated its existing credit facility that was entered into on June 24, 2015. 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. 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 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 30, 2022, and October 31, 2021, 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 30, 2022, the Company was in compliance with all of these covenants. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's tax provision is determined using an estimated annual effective tax rate and adjusted for discrete taxable events that may occur during the quarter. The effects of tax legislation are recognized in the period in which the law is enacted. The deferred tax assets and liabilities are remeasured using enacted tax rates expected to apply to taxable income in the years the related temporary differences are anticipated to reverse. The Company's effective tax rate for the quarter ended January 30, 2022, was 22.4 percent compared to 19.7 percent for the corresponding period a year ago. The lower effective tax rate in the prior year was due primarily to a favorable state tax settlement. The amount of unrecognized tax benefits, including interest and penalties, is recorded in Other Long-term Liabilities. If recognized as of January 30, 2022, and January 24, 2021, $20.2 million and $28.3 million, respectively, would impact the Company’s effective tax rate. The Company includes accrued interest and penalties related to uncertain tax positions in income tax expense. Interest and penalties included in income tax expense was immaterial for the quarter ended January 30, 2022, and January 24, 2021. The amount of accrued interest and penalties at January 30, 2022, and January 24, 2021, associated with unrecognized tax benefits was $5.2 million and $7.3 million, respectively. The Company is regularly audited by federal and state taxing authorities. The United States Internal Revenue Service (I.R.S.) concluded its examination of fiscal 2019 in the second quarter of fiscal 2021. The Company has elected to participate in the Compliance Assurance Process (CAP) for fiscal years through 2023. The objective of CAP is to contemporaneously work with the I.R.S. to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time. The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, 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. 30, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE DATA | EARNINGS PER SHARE DATA The reported net earnings attributable to the Company were used when computing basic and diluted earnings per share. The following table sets forth the shares used as the denominator for those computations: Quarter Ended in thousands January 30, 2022 January 24, 2021 Basic Weighted-Average Shares Outstanding 542,680 539,913 Dilutive Potential Common Shares 5,247 7,531 Diluted Weighted-Average Shares Outstanding 547,928 547,444 Antidilutive Potential Common Shares 3,501 2,194 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Jan. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company develops, processes, and distributes a wide array of food products in a variety of markets. The Company reports its results in the following four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market, along with the sale of nutritional and private label shelf-stable products to retail, foodservice, and industrial customers. This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture. The Refrigerated Foods segment consists primarily of the processing, marketing, and sale of branded and unbranded pork, beef, and poultry products for retail, foodservice, deli, convenience store, and commercial customers. The Jennie-O Turkey Store segment consists primarily of the processing, marketing, and sale of branded and unbranded turkey products for retail, foodservice, and commercial customers. The International & Other segment includes Hormel Foods International which manufactures, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures and royalty arrangements. Intersegment sales are recorded at prices that approximate cost and are eliminated in the Consolidated Statements of Operations. The Company does not allocate deferred compensation, investment income, interest expense, or interest income to its segments when measuring performance. The Company also retains various other income and expenses at the corporate level. Equity in Earnings of Affiliates is included in segment profit; however, earnings attributable to the Company’s noncontrolling interests are excluded. These items are included below as Net Unallocated Expense and Noncontrolling Interest when reconciling to Earnings Before Income Taxes. Sales and segment profit for each of the Company’s reportable segments and reconciliation to Earnings Before Income Taxes are set forth below. The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the profit and other financial information shown below. Quarter Ended in thousands January 30, 2022 January 24, 2021 Sales to Unaffiliated Customers Grocery Products $ 855,591 $ 577,599 Refrigerated Foods 1,627,528 1,367,077 Jennie-O Turkey Store 384,471 333,321 International & Other 176,768 183,150 Total $ 3,044,358 $ 2,461,147 Intersegment Sales Grocery Products $ — $ — Refrigerated Foods 7,689 5,957 Jennie-O Turkey Store 47,954 26,692 International & Other — — Total 55,642 32,650 Intersegment Elimination (55,642) (32,650) Total $ — $ — Net Sales Grocery Products $ 855,591 $ 577,599 Refrigerated Foods 1,635,217 1,373,034 Jennie-O Turkey Store 432,425 360,013 International & Other 176,768 183,150 Intersegment Elimination (55,642) (32,650) Total $ 3,044,358 $ 2,461,147 Segment Profit Grocery Products $ 99,486 $ 92,202 Refrigerated Foods 162,391 141,171 Jennie-O Turkey Store 43,737 26,940 International & Other 26,084 32,204 Total Segment Profit 331,699 292,517 Net Unallocated Expense 22,933 15,547 Noncontrolling Interest 139 112 Earnings Before Income Taxes $ 308,904 $ 277,082 Revenue has been disaggregated into the categories below to show how sales channels affect the nature, amount, timing, and uncertainty of revenue and cash flows. Total revenue contributed by sales channel are: Quarter Ended in thousands January 30, 2022 January 24, 2021 U.S. Retail $ 1,958,747 $ 1,669,887 U.S. Foodservice 886,065 586,336 International 199,545 204,924 Total $ 3,044,358 $ 2,461,147 Beginning in the first quarter of fiscal 2022, the Company updated its presentation of revenue disaggregation by sales channel, combining U.S. Deli and U.S. Retail as market conditions have evolved providing many similarities between the channels. The prior year presentation has been updated to conform to the current period presentation. The Company’s products consist primarily of meat and other food products. Total revenue contributed by classes of similar products are: Quarter Ended in thousands January 30, 2022 January 24, 2021 Perishable $ 1,773,203 $ 1,376,821 Shelf-stable 635,236 523,936 Poultry 536,604 474,651 Miscellaneous 99,315 85,739 Total $ 3,044,358 $ 2,461,147 Perishable includes fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamole, and bacon (excluding Jennie-O Turkey Store products). Shelf-stable includes canned luncheon meats, nut butters, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, and other items that do not require refrigeration. The Poultry category is composed primarily of Jennie-O Turkey Store products. The Miscellaneous category primarily consists of nutritional food products and supplements, dessert and drink mixes, and industrial gelatin products. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jan. 30, 2022 | |
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 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 generally accepted accounting principles 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. |
Fiscal Year | Fiscal Year: The Company’s fiscal year ends on the last Sunday in October. Fiscal 2022 consists of 52 weeks. Fiscal 2021 consisted of 53 weeks with the additional week occurring in the fourth quarter. |
Reclassifications | Reclassifications: Certain reclassifications of previously reported amounts have been made to conform to the current year presentation. |
Accounting Changes and Recent Accounting Pronouncements | Accounting Changes and Recent Accounting Pronouncements: New Accounting Pronouncements Adopted in Current Fiscal Year In December 2019, the FASB issued ASU 2019-12, Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740) . The updated guidance simplifies the accounting for income taxes by removing certain exceptions in Topic 740 and clarifying and amending existing guidance. The amendments are effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2022 and adoption did not have a material impact on its consolidated financial statements. New Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). The guidance provides optional expedients and exceptions to account for contracts, hedging relationships, and other transactions that reference London Interbank Referenced Rate (LIBOR) or another reference rate expected to be discontinued. The optional guidance can be applied from March 12, 2020 through December 31, 2022. The Company is currently assessing the impact the updated provisions will have on the consolidated financial statements. |
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 four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market, along with the sale of nutritional and private label shelf-stable products to retail, foodservice, and industrial customers. This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture. The Refrigerated Foods segment consists primarily of the processing, marketing, and sale of branded and unbranded pork, beef, and poultry products for retail, foodservice, deli, convenience store, and commercial customers. The Jennie-O Turkey Store segment consists primarily of the processing, marketing, and sale of branded and unbranded turkey products for retail, foodservice, and commercial customers. The International & Other segment includes Hormel Foods International which manufactures, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures and royalty arrangements. Intersegment sales are recorded at prices that approximate cost and are eliminated in the Consolidated Statements of Operations. The Company does not allocate deferred compensation, investment income, interest expense, or interest income to its segments when measuring performance. The Company also retains various other income and expenses at the corporate level. Equity in Earnings of Affiliates is included in segment profit; however, earnings attributable to the Company’s noncontrolling interests are excluded. These items are included below as Net Unallocated Expense and Noncontrolling Interest when reconciling to Earnings Before Income Taxes. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Jan. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amounts of goodwill for the quarter ended January 30, 2022, are: in thousands Grocery Refrigerated Jennie-O International Total Balance at October 31, 2021 $ 2,398,354 $ 2,094,421 $ 176,628 $ 259,699 $ 4,929,102 Foreign Currency Translation — — — (962) (962) Balance at January 30, 2022 $ 2,398,354 $ 2,094,421 $ 176,628 $ 258,737 $ 4,928,139 |
Schedule of carrying amounts for indefinite-lived intangible assets | The carrying amounts for indefinite-lived intangible assets are: in thousands January 30, 2022 October 31, 2021 Brands/Tradenames/Trademarks $ 1,665,190 $ 1,665,190 Other Intangibles 184 184 Foreign Currency Translation (6,857) (6,646) Total $ 1,658,517 $ 1,658,728 |
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 30, 2022 October 31, 2021 in thousands Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer Lists/Relationships $ 168,239 $ (60,092) $ 168,239 $ (56,882) Other Intangibles 59,241 (8,418) 60,241 (8,356) Tradenames/Trademarks 10,536 (6,237) 10,536 (5,700) Foreign Currency Translation — (4,620) — (4,534) Total $ 238,016 $ (79,368) $ 239,016 $ (75,471) |
Schedule of estimated annual amortization expense | Estimated annual amortization expense for the five fiscal years after October 31, 2021, is as follows: in thousands Amortization Expense 2022 $ 19,244 2023 18,351 2024 16,352 2025 14,627 2026 14,170 |
INVESTMENTS IN AND RECEIVABLE_2
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES (Tables) | 3 Months Ended |
Jan. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of investments in, receivables from, and equity in earnings of affiliates | Investments In and Receivables From Affiliates consist of: in thousands Segment % Owned January 30, 2022 October 31, 2021 MegaMex Foods, LLC Grocery Products 50% $ 197,935 $ 205,413 Other Joint Ventures International & Other Various (20-40%) 88,558 93,606 Total $ 286,493 $ 299,019 |
Schedule of equity in earnings of affiliates | Equity in Earnings of Affiliates consists of: Quarter Ended in thousands Segment January 30, 2022 January 24, 2021 MegaMex Foods, LLC Grocery Products $ 6,995 $ 12,433 Other Joint Ventures International & Other (97) 1,794 Total $ 6,898 $ 14,228 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Jan. 30, 2022 | |
Inventory, Net [Abstract] | |
Schedule of principal components of inventories | Principal components of inventories are: in thousands January 30, 2022 October 31, 2021 Finished Products $ 700,026 $ 725,115 Raw Materials and Work-in-Process 416,013 395,403 Operating Supplies 181,608 163,416 Maintenance Materials and Parts 88,057 85,264 Total $ 1,385,705 $ 1,369,198 |
DERIVATIVES AND HEDGING (Tables
DERIVATIVES AND HEDGING (Tables) | 3 Months Ended |
Jan. 30, 2022 | |
Derivative [Line Items] | |
Schedule of fair values of derivative instruments | The fair values of the Company’s derivative instruments designated as hedges are: Gross Fair Value in thousands Location on Consolidated Condensed Statements of Financial Position January 30, 2022 October 31, 2021 Derivatives Designated as Hedges: Commodity Contracts (1) Other Current Assets $ 27,819 $ 21,798 Interest Rate Contracts Interest and Dividends Payable (4,949) — (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 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 in the Consolidated Condensed Statements of Financial Position. The gross asset position as of January 30, 2022 is offset by the obligation to return net cash collateral of $16.8 million contained within the master netting arrangement. The gross asset position as of October 31, 2021 is offset by the obligation to return net cash collateral of $10.8 million. See Note I - Fair Value Measurements for a discussion of these net amounts as reported in 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: Carrying Amount of Hedged in thousands Location on Consolidated Condensed Statements of Financial Position January 30, 2022 October 31, 2021 Fair Value Hedges: Commodity Contracts Accounts Payable (1) $ 8,262 $ 3,432 Interest Rate Contracts Long-term Debt - Less Current Maturities (2) (445,051) — (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 30, 2022, a cumulative basis adjustment of $4.9 million has been included in the carrying amount. |
Schedule of gains or losses related to derivative instruments | The effect of 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 Consolidated Statements of Operations Quarter Ended Quarter Ended in thousands January 30, 2022 January 24, 2021 January 30, 2022 January 24, 2021 Cash Flow Hedges: Commodity Contracts $ 20,279 $ 16,552 $ 7,746 $ (50) Cost of Products Sold Excluded Component (2) (1,172) — — — Interest Rate Contracts — — 247 — Interest Expense (1) See Note H - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. (2) Represents the time value of corn 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: Consolidated Statements of Operations Impact Quarter Ended in thousands January 30, 2022 January 24, 2021 Net Earnings Attributable to Hormel Foods Corporation $ 239,571 $ 222,283 Cash Flow Hedges - Commodity Contracts Gain (Loss) Reclassified from AOCL 7,746 (50) Amortization of Excluded Component from Options (825) — Fair Value Hedges - Commodity Contracts Gain (Loss) on Commodity Futures (1) (3,650) (2,913) Total Gain (Loss) on Commodity Contracts (2) $ 3,271 $ (2,963) Cash Flow Hedges - Interest Rate Locks Amortization of Gain on Interest Rate Locks 247 — Fair Value Hedge - Interest Rate Swap Gain (Loss) on Interest Rate Swap 792 — Total Gain on Interest Rate Contracts (3) $ 1,039 $ — Total Gain (Loss) Recognized in Earnings $ 4,310 $ (2,963) (1) Amounts represent gains or losses on commodity contracts designated as fair value hedges that were closed during the thirteen weeks ended January 30, 2022, 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) 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: Volume Commodity Contracts January 30, 2022 October 31, 2021 Corn 34.0 million bushels 33.1 million bushels Lean Hogs 132.6 million pounds 120.0 million pounds |
PENSION AND OTHER POST-RETIRE_2
PENSION AND OTHER POST-RETIREMENT BENEFITS (Tables) | 3 Months Ended |
Jan. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic cost of defined benefit plans | Net periodic benefit cost for pension and other post-retirement benefit plans consists of: Pension Benefits Quarter Ended in thousands January 30, 2022 January 24, 2021 Service Cost $ 10,019 $ 9,107 Interest Cost 12,640 12,362 Expected Return on Plan Assets (27,062) (25,189) Amortization of Prior Service Cost (374) (367) Recognized Actuarial Loss 3,132 5,578 Net Periodic Cost $ (1,645) $ 1,491 Post-retirement Benefits Quarter Ended in thousands January 30, 2022 January 24, 2021 Service Cost $ 117 $ 131 Interest Cost 1,919 1,948 Amortization of Prior Service Cost 2 (164) Recognized Actuarial Loss 610 496 Net Periodic Cost $ 2,648 $ 2,411 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Jan. 30, 2022 | |
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: in thousands Foreign Pension & Derivatives & Hedging Accumulated Balance at October 31, 2021 $ (51,181) $ (261,211) $ 35,123 $ (277,269) Unrecognized Gains (Losses) Gross 806 (8) 19,107 19,905 Tax Effect — — (4,654) (4,654) Reclassification into Net Earnings Gross — 3,370 (1) (7,993) (2) (4,623) Tax Effect — (827) 1,944 1,117 Net of Tax Amount 806 2,535 8,404 11,745 Balance at January 30, 2022 $ (50,375) $ (258,676) $ 43,527 $ (265,524) (1) Included in the computation of net periodic cost. See Note G - 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 F - Derivatives and Hedging for additional information. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Jan. 30, 2022 | |
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 as of January 30, 2022, and October 31, 2021, and their level within the fair value hierarchy are presented in the table below. Fair Value Measurements at January 30, 2022 in thousands Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets at Fair Value Cash and Cash Equivalents (1) $ 824,434 $ 822,314 $ 2,120 $ — Short-term Marketable Securities (2) 22,194 10,443 11,751 — Other Trading Securities (3) 197,644 — 197,644 — Commodity Derivatives (4) 13,218 7,043 6,175 — Total Assets at Fair Value $ 1,057,490 $ 839,800 $ 217,690 $ — Liabilities at Fair Value Deferred Compensation (3) $ 67,434 $ — $ 67,434 $ — Interest Rate Derivatives (5) 4,949 — 4,949 — Total Liabilities at Fair Value $ 72,383 $ — $ 72,383 $ — Fair Value Measurements at October 31, 2021 in thousands Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets at Fair Value Cash and Cash Equivalents (1) $ 613,530 $ 611,111 $ 2,419 $ — Short-term Marketable Securities (2) 21,162 8,790 12,372 — Other Trading Securities (3) 203,020 — 203,020 — Commodity Derivatives (4) 13,522 8,104 5,418 — Total Assets at Fair Value $ 851,234 $ 628,005 $ 223,229 $ — Liabilities at Fair Value Deferred Compensation (3) $ 70,466 $ — $ 70,466 $ — Total Liabilities at Fair Value $ 70,466 $ — $ 70,466 $ — 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, 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 percentage of the I.R.S. 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 30, 2022, securities held by the rabbi trust generated losses of $5.4 million, compared to a gain of $11.8 million for the quarter ended January 24, 2021. (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 and hogs, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available, and these contracts are classified as Level 1. The Company’s corn futures option contracts are OTC instruments classified as Level 2 whose value is calculated using the Black-Scholes pricing model, corn future prices quoted from the Chicago Board of Trade, and other adjustments to inputs that are observable in active markets. All derivatives are reviewed for potential credit risk and risk of nonperformance. The net balance for each program is included in Other Current Assets or Accounts Payable, as appropriate, in the Consolidated Condensed Statements of Financial Position. As of January 30, 2022, the Company has recognized the obligation to return net cash collateral of $16.8 million from various counterparties (including cash of $18.7 million less $1.9 million of realized gain). As of October 31, 2021, the Company had recognized the obligation to return net cash collateral of $10.8 million from various counterparties (including cash of $45.6 million less $34.8 million of realized gain). (5) The Company holds an interest rate hedging position to minimize the risk related to future interest rate changes. The fair value of the outstanding interest rate hedge agreement is based on an observable benchmark interest rate (LIBOR) and therefore classified as Level 2. |
LONG-TERM DEBT AND OTHER BORR_2
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS (Tables) | 3 Months Ended |
Jan. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term Debt consists of: in thousands January 30, 2022 October 31, 2021 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 (8,301) (8,484) Unamortized Debt Issuance Costs (22,540) (23,435) Interest Rate Swap (4,949) — Finance Lease Liabilities 51,042 52,999 Other Financing Arrangements 2,726 2,823 Total $ 3,317,979 $ 3,323,903 Less: Current Maturities of Long-term Debt 8,829 8,756 Long-term Debt Less Current Maturities $ 3,309,150 $ 3,315,147 |
EARNINGS PER SHARE DATA (Tables
EARNINGS PER SHARE DATA (Tables) | 3 Months Ended |
Jan. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of denominator for the computation of basic and diluted earnings per share | The following table sets forth the shares used as the denominator for those computations: Quarter Ended in thousands January 30, 2022 January 24, 2021 Basic Weighted-Average Shares Outstanding 542,680 539,913 Dilutive Potential Common Shares 5,247 7,531 Diluted Weighted-Average Shares Outstanding 547,928 547,444 Antidilutive Potential Common Shares 3,501 2,194 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Jan. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of sales and operating profits for each of the reportable segments and reconciliation to earnings before income taxes | Sales and segment profit for each of the Company’s reportable segments and reconciliation to Earnings Before Income Taxes are set forth below. The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the profit and other financial information shown below. Quarter Ended in thousands January 30, 2022 January 24, 2021 Sales to Unaffiliated Customers Grocery Products $ 855,591 $ 577,599 Refrigerated Foods 1,627,528 1,367,077 Jennie-O Turkey Store 384,471 333,321 International & Other 176,768 183,150 Total $ 3,044,358 $ 2,461,147 Intersegment Sales Grocery Products $ — $ — Refrigerated Foods 7,689 5,957 Jennie-O Turkey Store 47,954 26,692 International & Other — — Total 55,642 32,650 Intersegment Elimination (55,642) (32,650) Total $ — $ — Net Sales Grocery Products $ 855,591 $ 577,599 Refrigerated Foods 1,635,217 1,373,034 Jennie-O Turkey Store 432,425 360,013 International & Other 176,768 183,150 Intersegment Elimination (55,642) (32,650) Total $ 3,044,358 $ 2,461,147 Segment Profit Grocery Products $ 99,486 $ 92,202 Refrigerated Foods 162,391 141,171 Jennie-O Turkey Store 43,737 26,940 International & Other 26,084 32,204 Total Segment Profit 331,699 292,517 Net Unallocated Expense 22,933 15,547 Noncontrolling Interest 139 112 Earnings Before Income Taxes $ 308,904 $ 277,082 |
Schedule of total revenues contributed by sales channel | Total revenue contributed by sales channel are: Quarter Ended in thousands January 30, 2022 January 24, 2021 U.S. Retail $ 1,958,747 $ 1,669,887 U.S. Foodservice 886,065 586,336 International 199,545 204,924 Total $ 3,044,358 $ 2,461,147 Quarter Ended in thousands January 30, 2022 January 24, 2021 Perishable $ 1,773,203 $ 1,376,821 Shelf-stable 635,236 523,936 Poultry 536,604 474,651 Miscellaneous 99,315 85,739 Total $ 3,044,358 $ 2,461,147 |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Details) - Planters Snack Nuts Business - USD ($) $ in Millions | Jun. 07, 2021 | Jan. 30, 2022 |
ACQUISITIONS | ||
Final purchase price, including working capital adjustments | $ 3,400 | |
Net sales contributed by acquisition | $ 271.8 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Changes in Carrying Amounts of Goodwill (Details) $ in Thousands | 3 Months Ended |
Jan. 30, 2022USD ($) | |
Changes in the carrying amount of goodwill | |
Balance at October 31, 2021 | $ 4,929,102 |
Foreign Currency Translation | (962) |
Balance at January 30, 2022 | 4,928,139 |
Grocery Products | |
Changes in the carrying amount of goodwill | |
Balance at October 31, 2021 | 2,398,354 |
Foreign Currency Translation | 0 |
Balance at January 30, 2022 | 2,398,354 |
Refrigerated Foods | |
Changes in the carrying amount of goodwill | |
Balance at October 31, 2021 | 2,094,421 |
Foreign Currency Translation | 0 |
Balance at January 30, 2022 | 2,094,421 |
Jennie-O Turkey Store | |
Changes in the carrying amount of goodwill | |
Balance at October 31, 2021 | 176,628 |
Foreign Currency Translation | 0 |
Balance at January 30, 2022 | 176,628 |
International & Other | |
Changes in the carrying amount of goodwill | |
Balance at October 31, 2021 | 259,699 |
Foreign Currency Translation | (962) |
Balance at January 30, 2022 | $ 258,737 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jan. 30, 2022 | Oct. 31, 2021 |
Carrying amounts for indefinite-lived intangible assets | ||
Total | $ 1,658,517 | $ 1,658,728 |
Brands/Tradenames/Trademarks | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | 1,665,190 | 1,665,190 |
Other Intangibles | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | 184 | 184 |
Foreign Currency Translation | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | $ 6,857 | $ 6,646 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Definite Lived Intangibles Assets (Details) - USD ($) $ in Thousands | Jan. 30, 2022 | Oct. 31, 2021 |
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | $ 238,016 | $ 239,016 |
Accumulated Amortization | (79,368) | (75,471) |
Customer Lists/Relationships | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 168,239 | 168,239 |
Accumulated Amortization | (60,092) | (56,882) |
Other Intangibles | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 59,241 | 60,241 |
Accumulated Amortization | (8,418) | (8,356) |
Tradenames/Trademarks | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 10,536 | 10,536 |
Accumulated Amortization | (6,237) | (5,700) |
Foreign Currency Translation | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 0 | 0 |
Accumulated Amortization | $ (4,620) | $ (4,534) |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Estimated Annual Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 30, 2022 | Jan. 24, 2021 | Oct. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of Intangible Assets | $ 4,800 | $ 4,000 | |
Amortization Expense | |||
2022 | $ 19,244 | ||
2023 | 18,351 | ||
2024 | 16,352 | ||
2025 | 14,627 | ||
2026 | $ 14,170 |
INVESTMENTS IN AND RECEIVABLE_3
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES - Schedule of Investments and Equity Information (Details) - USD ($) $ in Thousands | Jan. 30, 2022 | Oct. 31, 2021 |
Investments In and Receivables from Affiliates | ||
Total | $ 286,493 | $ 299,019 |
Minimum | ||
Investments In and Receivables from Affiliates | ||
% Owned | 20.00% | |
Maximum | ||
Investments In and Receivables from Affiliates | ||
% Owned | 40.00% | |
MegaMex Foods, LLC | ||
Investments In and Receivables from Affiliates | ||
% Owned | 50.00% | |
Total | $ 197,935 | 205,413 |
Other Joint Ventures | ||
Investments In and Receivables from Affiliates | ||
Total | $ 88,558 | $ 93,606 |
INVESTMENTS IN AND RECEIVABLE_4
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES - Schedule of Equity in Earnings of Affiliates (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 30, 2022 | Jan. 24, 2021 | |
Investments In and Receivables from Affiliates | ||
Total | $ 6,898 | $ 14,228 |
MegaMex Foods, LLC | ||
Investments In and Receivables from Affiliates | ||
Total | 6,995 | 12,433 |
Other Joint Ventures | ||
Investments In and Receivables from Affiliates | ||
Total | $ (97) | $ 1,794 |
INVESTMENTS IN AND RECEIVABLE_5
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jan. 30, 2022 | Jan. 24, 2021 | Oct. 26, 2009 | |
Schedule of Equity Method Investments [Line Items] | |||
Dividends received from affiliates | $ 18 | $ 11.3 | |
MegaMex Foods, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Excess of investment over the underlying equity in net assets of the joint venture | $ 10.8 | $ 21.3 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jan. 30, 2022 | Oct. 31, 2021 |
Inventory, Net [Abstract] | ||
Finished Products | $ 700,026 | $ 725,115 |
Raw Materials and Work-in-Process | 416,013 | 395,403 |
Operating Supplies | 181,608 | 163,416 |
Maintenance Materials and Parts | 88,057 | 85,264 |
Total | $ 1,385,705 | $ 1,369,198 |
DERIVATIVES AND HEDGING - Narra
DERIVATIVES AND HEDGING - Narrative (Details) $ in Millions | 3 Months Ended | ||
Jan. 30, 2022USD ($) | Jul. 25, 2021 | Apr. 25, 2021USD ($)derivative | |
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 | ||
Treasury Lock | Derivatives designated as hedges | Cash Flow Hedges | |||
Derivative [Line Items] | |||
Number of hedging instruments | derivative | 2 | ||
Total notional amount of hedging | $ 1,250 | ||
Treasury Lock | Derivatives designated as hedges | Cash Flow Hedges | Minimum | |||
Derivative [Line Items] | |||
Tenor of hedging contracts | 7 years | ||
Treasury Lock | Derivatives designated as hedges | Cash Flow Hedges | Maximum | |||
Derivative [Line Items] | |||
Tenor of hedging contracts | 30 years | ||
Interest Rate Contracts | Derivatives designated as hedges | Fair Value Hedges | |||
Derivative [Line Items] | |||
Total notional amount of hedging | $ 450 | ||
Commodity Contracts | |||
Derivative [Line Items] | |||
Hedging gains to be recognized within next twelve months | 43.3 | ||
Interest Rate Contracts | |||
Derivative [Line Items] | |||
Hedging gains to be recognized within next twelve months | $ 14.2 |
DERIVATIVES AND HEDGING - Outst
DERIVATIVES AND HEDGING - Outstanding Commodity Future Contracts (Details) - Cash Flow Hedges lb in Millions, bu in Millions | 3 Months Ended | 6 Months Ended |
Jan. 30, 2022lbbu | Apr. 25, 2021lbbu | |
Corn | ||
Derivative [Line Items] | ||
Futures contracts, volume (in million bushels) | bu | 34 | 33.1 |
Lean Hogs | ||
Derivative [Line Items] | ||
Futures contracts, volume (in million pounds) | lb | 132.6 | 120 |
DERIVATIVES AND HEDGING - Fair
DERIVATIVES AND HEDGING - Fair Value of Derivatives (Details) - USD ($) $ in Thousands | Jan. 30, 2022 | Oct. 31, 2021 |
Derivatives fair value | ||
Obligation to return net cash collateral | $ 16,800 | $ 10,800 |
Derivatives designated as hedges | Cash Flow Hedges | Commodity Contracts | Other Current Assets | ||
Derivatives fair value | ||
Gross fair value | 27,819 | 21,798 |
Derivatives designated as hedges | Cash Flow Hedges | Interest Rate Contracts | Interest and Dividends Payable | ||
Derivatives fair value | ||
Gross fair value | $ (4,949) | $ 0 |
DERIVATIVES AND HEDGING - Fai_2
DERIVATIVES AND HEDGING - Fair Value Hedge Assets (Liabilities) (Details) - USD ($) $ in Thousands | Jan. 30, 2022 | Oct. 31, 2021 |
Derivatives fair value | ||
Cumulative basis adjustment of carrying amount of hedged portion of 2024 Notes | $ 4,949 | $ 0 |
Fair Value Hedges | Commodity Contracts | Accounts Payable | ||
Derivatives fair value | ||
Carrying Amount of Hedged Assets/(Liabilities) | 8,262 | 3,432 |
Fair Value Hedges | Interest Rate Contracts | Long-term Debt - Less Current Maturities | ||
Derivatives fair value | ||
Carrying Amount of Hedged Assets/(Liabilities) | $ (445,051) | $ 0 |
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. 30, 2022 | Jan. 24, 2021 | |
Commodity Contracts | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Reclassified from AOCL into Earnings | $ 7,746 | $ (50) |
Interest Rate Contracts | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Reclassified from AOCL into Earnings | 247 | 0 |
Cost of Products Sold | Commodity Contracts | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Recognized in AOCL | 20,279 | 16,552 |
Gain/(Loss) Reclassified from AOCL into Earnings | 7,746 | (50) |
Cost of Products Sold | Corn Options | ||
Derivative instruments gains or losses (before tax) | ||
Excluded Component | (1,172) | 0 |
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 | $ 0 |
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. 30, 2022 | Jan. 24, 2021 | |
Derivative [Line Items] | ||
Net Earnings Attributable to Hormel Foods Corporation | $ 239,571 | $ 222,283 |
Fair Value Hedges | ||
Total Gain (Loss) Recognized in Earnings | 4,310 | (2,963) |
Derivatives designated as hedges | ||
Fair Value Hedges | ||
Total Gain (Loss) Recognized in Earnings | 1,039 | 0 |
Derivatives designated as hedges | Commodity Contracts | ||
Fair Value Hedges | ||
Total Gain (Loss) Recognized in Earnings | 3,271 | (2,963) |
Derivatives designated as hedges | Cash Flow Hedges | Commodity Contracts | ||
Cash Flow Hedges | ||
Gain (Loss) Reclassified from AOCL | 7,746 | (50) |
Amortization of Excluded Component from Options | (825) | 0 |
Derivatives designated as hedges | Cash Flow Hedges | Interest Rate Locks | ||
Cash Flow Hedges | ||
Gain (Loss) Reclassified from AOCL | 247 | 0 |
Derivatives designated as hedges | Fair Value Hedges | Commodity Contracts | ||
Fair Value Hedges | ||
Gain (loss) on Commodity Futures | (3,650) | (2,913) |
Derivatives designated as hedges | Fair Value Hedges | Interest Rate Contracts | ||
Fair Value Hedges | ||
Gain (loss) on Commodity Futures | $ 792 | $ 0 |
PENSION AND OTHER POST-RETIRE_3
PENSION AND OTHER POST-RETIREMENT BENEFITS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 30, 2022 | Jan. 24, 2021 | |
Pension Benefits | ||
Net periodic cost of defined benefit plans | ||
Service Cost | $ 10,019 | $ 9,107 |
Interest Cost | 12,640 | 12,362 |
Expected Return on Plan Assets | (27,062) | (25,189) |
Amortization of Prior Service Cost | (374) | (367) |
Recognized Actuarial Loss | 3,132 | 5,578 |
Net Periodic Cost | (1,645) | 1,491 |
Post-retirement Benefits | ||
Net periodic cost of defined benefit plans | ||
Service Cost | 117 | 131 |
Interest Cost | 1,919 | 1,948 |
Amortization of Prior Service Cost | 2 | (164) |
Recognized Actuarial Loss | 610 | 496 |
Net Periodic Cost | $ 2,648 | $ 2,411 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) $ in Thousands | 3 Months Ended |
Jan. 30, 2022USD ($) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | $ 6,972,883 |
Unrecognized Gains (Losses) | |
Gross | 19,905 |
Tax Effect | (4,654) |
Reclassification into Net Earnings | |
Gross | (4,623) |
Tax Effect | 1,117 |
Net of Tax Amount | 11,745 |
Ending Balance | 7,100,589 |
Accumulated Other Comprehensive Loss | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (277,269) |
Reclassification into Net Earnings | |
Ending Balance | (265,524) |
Foreign Currency Translation | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (51,181) |
Unrecognized Gains (Losses) | |
Gross | 806 |
Tax Effect | 0 |
Reclassification into Net Earnings | |
Gross | 0 |
Tax Effect | 0 |
Net of Tax Amount | 806 |
Ending Balance | (50,375) |
Pension & Other Benefits | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (261,211) |
Unrecognized Gains (Losses) | |
Gross | (8) |
Tax Effect | 0 |
Reclassification into Net Earnings | |
Gross | 3,370 |
Tax Effect | (827) |
Net of Tax Amount | 2,535 |
Ending Balance | (258,676) |
Derivatives & Hedging | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | 35,123 |
Unrecognized Gains (Losses) | |
Gross | 19,107 |
Tax Effect | (4,654) |
Reclassification into Net Earnings | |
Gross | (7,993) |
Tax Effect | 1,944 |
Net of Tax Amount | 8,404 |
Ending Balance | $ 43,527 |
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. 30, 2022 | Jan. 24, 2021 | Oct. 31, 2021 | |
Right To Reclaim Net Cash Collateral, Commodity Derivatives [Abstract] | |||
Obligation to return net cash collateral | $ 16,800 | $ 10,800 | |
Obligation to return net cash collateral, cash portion | 18,700 | 45,600 | |
Realized gains on closed positions | 1,900 | 34,800 | |
Rabbi trust | |||
Right To Reclaim Net Cash Collateral, Commodity Derivatives [Abstract] | |||
(Losses) gains related to securities held by the trust | (5,400) | $ 11,800 | |
Recurring basis | |||
Assets at Fair Value | |||
Cash and Cash Equivalents | 824,434 | 613,530 | |
Short-term Marketable Securities | 22,194 | 21,162 | |
Other Trading Securities | 197,644 | 203,020 | |
Commodity Derivatives | 13,218 | 13,522 | |
Total Assets at Fair Value | 1,057,490 | 851,234 | |
Liabilities at Fair Value | |||
Deferred Compensation | 67,434 | 70,466 | |
Interest Rate Derivatives | 4,949 | ||
Total Liabilities at Fair Value | 72,383 | 70,466 | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Assets at Fair Value | |||
Cash and Cash Equivalents | 822,314 | 611,111 | |
Short-term Marketable Securities | 10,443 | 8,790 | |
Other Trading Securities | 0 | 0 | |
Commodity Derivatives | 7,043 | 8,104 | |
Total Assets at Fair Value | 839,800 | 628,005 | |
Liabilities at Fair Value | |||
Deferred Compensation | 0 | 0 | |
Interest Rate Derivatives | 0 | ||
Total Liabilities at Fair Value | 0 | 0 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | |||
Assets at Fair Value | |||
Cash and Cash Equivalents | 2,120 | 2,419 | |
Short-term Marketable Securities | 11,751 | 12,372 | |
Other Trading Securities | 197,644 | 203,020 | |
Commodity Derivatives | 6,175 | 5,418 | |
Total Assets at Fair Value | 217,690 | 223,229 | |
Liabilities at Fair Value | |||
Deferred Compensation | 67,434 | 70,466 | |
Interest Rate Derivatives | 4,949 | ||
Total Liabilities at Fair Value | 72,383 | 70,466 | |
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 | |
Interest Rate Derivatives | 0 | ||
Total Liabilities at Fair Value | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | Jan. 30, 2022 | Oct. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Fair value of long-term debt, utilizing discounted cash flows (Level 2) | $ 3,200 | $ 3,300 |
LONG-TERM DEBT AND OTHER BORR_3
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Jan. 30, 2022 | Oct. 31, 2021 | Jun. 03, 2021 | Jun. 11, 2020 |
Debt Instrument [Line Items] | ||||
Unamortized Debt Issuance Costs | $ (22,540) | $ (23,435) | ||
Interest Rate Swap | (4,949) | 0 | ||
Finance Lease Liabilities | 51,042 | 52,999 | ||
Other Financing Arrangements | 2,726 | 2,823 | ||
Total | 3,317,979 | 3,323,903 | ||
Less: Current Maturities of Long-term Debt | 8,829 | 8,756 | ||
Long-term Debt Less Current Maturities | 3,309,150 | 3,315,147 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized Discount on Senior Notes | $ (8,301) | $ (8,484) | ||
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% | 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% | 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% | 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% | 0.65% | |
Senior Notes | $ 950,000 | $ 950,000 |
LONG-TERM DEBT AND OTHER BORR_4
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS - Narrative (Details) - USD ($) | Jun. 11, 2021 | Jun. 03, 2021 | May 06, 2021 | Jan. 30, 2022 | Oct. 31, 2021 | Jun. 11, 2020 |
Interest Rate Contracts | Fair Value Hedges | Derivatives designated as hedges | ||||||
Debt Instrument [Line Items] | ||||||
Total notional amount of hedging | $ 450,000,000 | |||||
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% | 1.80% | |||
Redemption price, percentage | 101.00% | |||||
Senior Notes | 2024 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount of debt issued | $ 950,000,000 | |||||
Interest rate | 0.65% | 0.65% | 0.65% | |||
Period to redeem in whole or in part after the issuance date | 1 year | |||||
Senior Notes | 2028 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount of debt issued | $ 750,000,000 | |||||
Interest rate | 1.70% | 1.70% | 1.70% | |||
Redemption price, percentage | 101.00% | |||||
Senior Notes | 2051 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount of debt issued | $ 600,000,000 | |||||
Interest rate | 3.05% | 3.05% | 3.05% | |||
Redemption price, percentage | 101.00% | |||||
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 | |||||
Amount outstanding under credit facility | $ 0 | $ 0 | ||||
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% | |||||
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 | 0.00% | |||||
Credit Facility | Unsecured Revolving Credit Facility | Minimum | Eurocurrency rate | ||||||
Debt Instrument [Line Items] | ||||||
Margin over interest rate percentage | 0.575% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 30, 2022 | Jan. 24, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 22.40% | 19.70% |
Unrecognized tax benefits that would impact effective tax rate | $ 20.2 | $ 28.3 |
Accrued interest and penalties associated with unrecognized tax benefits | $ 5.2 | $ 7.3 |
EARNINGS PER SHARE DATA - Share
EARNINGS PER SHARE DATA - Shares Used as Denominator and Narrative (Details) - shares shares in Thousands | 3 Months Ended | |
Jan. 30, 2022 | Jan. 24, 2021 | |
Earnings Per Share [Abstract] | ||
Basic Weighted-Average Shares Outstanding (in shares) | 542,680 | 539,913 |
Dilutive Potential Common Shares (in shares) | 5,247 | 7,531 |
Diluted Weighted-Average Shares Outstanding (in shares) | 547,928 | 547,444 |
Antidilutive Potential Common Shares (in shares) | 3,501 | 2,194 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 3 Months Ended |
Jan. 30, 2022segment | |
Segment Reporting [Abstract] | |
Number of reportable business segments | 4 |
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. 30, 2022 | Jan. 24, 2021 | |
Operating profit and other financial information | ||
Net Sales | $ 3,044,358 | $ 2,461,147 |
Segment Profit | 319,675 | 268,018 |
Net Unallocated Expense | 22,933 | 15,547 |
Noncontrolling Interest | 139 | 112 |
Earnings Before Income Taxes | 308,904 | 277,082 |
Grocery Products | ||
Operating profit and other financial information | ||
Net Sales | 855,591 | 577,599 |
Refrigerated Foods | ||
Operating profit and other financial information | ||
Net Sales | 1,627,528 | 1,367,077 |
Jennie-O Turkey Store | ||
Operating profit and other financial information | ||
Net Sales | 384,471 | 333,321 |
International & Other | ||
Operating profit and other financial information | ||
Net Sales | 176,768 | 183,150 |
Intersegment Elimination | ||
Operating profit and other financial information | ||
Net Sales | 55,642 | 32,650 |
Intersegment Elimination | Grocery Products | ||
Operating profit and other financial information | ||
Net Sales | 0 | 0 |
Intersegment Elimination | Refrigerated Foods | ||
Operating profit and other financial information | ||
Net Sales | 7,689 | 5,957 |
Intersegment Elimination | Jennie-O Turkey Store | ||
Operating profit and other financial information | ||
Net Sales | 47,954 | 26,692 |
Intersegment Elimination | International & Other | ||
Operating profit and other financial information | ||
Net Sales | 0 | 0 |
Operating Segments | ||
Operating profit and other financial information | ||
Segment Profit | 331,699 | 292,517 |
Operating Segments | Grocery Products | ||
Operating profit and other financial information | ||
Net Sales | 855,591 | 577,599 |
Segment Profit | 99,486 | 92,202 |
Operating Segments | Refrigerated Foods | ||
Operating profit and other financial information | ||
Net Sales | 1,635,217 | 1,373,034 |
Segment Profit | 162,391 | 141,171 |
Operating Segments | Jennie-O Turkey Store | ||
Operating profit and other financial information | ||
Net Sales | 432,425 | 360,013 |
Segment Profit | 43,737 | 26,940 |
Operating Segments | International & Other | ||
Operating profit and other financial information | ||
Net Sales | 176,768 | 183,150 |
Segment Profit | $ 26,084 | $ 32,204 |
SEGMENT REPORTING - Revenue Con
SEGMENT REPORTING - Revenue Contributed by Sales Channel (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 30, 2022 | Jan. 24, 2021 | |
Revenue from External Customer [Line Items] | ||
Total | $ 3,044,358 | $ 2,461,147 |
Perishable | ||
Revenue from External Customer [Line Items] | ||
Total | 1,773,203 | 1,376,821 |
Shelf-stable | ||
Revenue from External Customer [Line Items] | ||
Total | 635,236 | 523,936 |
Poultry | ||
Revenue from External Customer [Line Items] | ||
Total | 536,604 | 474,651 |
Miscellaneous | ||
Revenue from External Customer [Line Items] | ||
Total | 99,315 | 85,739 |
U.S. Retail | ||
Revenue from External Customer [Line Items] | ||
Total | 1,958,747 | 1,669,887 |
U.S. Foodservice | ||
Revenue from External Customer [Line Items] | ||
Total | 886,065 | 586,336 |
International | ||
Revenue from External Customer [Line Items] | ||
Total | $ 199,545 | $ 204,924 |