COVER
COVER - shares | 9 Months Ended | |
Jul. 30, 2023 | Aug. 27, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-2402 | |
Entity Registrant Name | HORMEL FOODS CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 41-0319970 | |
Entity Address, Address Line One | 1 Hormel Place | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55912-3680 | |
City Area Code | 507 | |
Local Phone Number | 437-5611 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | HRL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Smaller Reporting Company | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0000048465 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-29 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Common Stock $0.01465 par value | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 546,481,141 | |
Common Stock Non-Voting $0.01 par value | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Income Statement [Abstract] | ||||
Net Sales | $ 2,963,299 | $ 3,034,414 | $ 8,911,930 | $ 9,175,331 |
Cost of Products Sold | 2,465,251 | 2,528,364 | 7,426,514 | 7,577,062 |
Gross Profit | 498,048 | 506,049 | 1,485,417 | 1,598,269 |
Selling, General, and Administrative | 291,073 | 222,147 | 725,621 | 672,777 |
Equity in Earnings of Affiliates | 9,784 | 7,138 | 42,213 | 19,951 |
Operating Income | 216,759 | 291,040 | 802,009 | 945,443 |
Interest and Investment Income | 9,239 | 14,411 | 20,700 | 20,078 |
Interest Expense | 18,372 | 15,615 | 55,042 | 44,913 |
Earnings Before Income Taxes | 207,626 | 289,836 | 767,666 | 920,608 |
Provision for Income Taxes | 45,055 | 71,010 | 170,230 | 200,393 |
Net Earnings | 162,571 | 218,826 | 597,437 | 720,215 |
Less: Net Earnings (Loss) Attributable to Noncontrolling Interest | (108) | (89) | (200) | 112 |
Net Earnings Attributable to Hormel Foods Corporation | $ 162,679 | $ 218,915 | $ 597,637 | $ 720,103 |
Net Earnings Per Share | ||||
Basic (in dollars per share) | $ 0.30 | $ 0.40 | $ 1.09 | $ 1.32 |
Diluted (in dollars per share) | $ 0.30 | $ 0.40 | $ 1.09 | $ 1.31 |
Weighted-average Shares Outstanding | ||||
Basic (in shares) | 546,358 | 546,077 | 546,389 | 544,486 |
Diluted (in shares) | 548,637 | 550,167 | 549,227 | 549,377 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Earnings | $ 162,571 | $ 218,826 | $ 597,437 | $ 720,215 |
Other Comprehensive Income (Loss), Net of Tax: | ||||
Foreign Currency Translation | (10,572) | (29,228) | 27,362 | (14,233) |
Pension and Other Benefits | 2,195 | 2,505 | 7,368 | 7,643 |
Deferred Hedging | 2,518 | (35,138) | (31,058) | 967 |
Equity Method Investments | 8,733 | 0 | 10,141 | 0 |
Total Other Comprehensive Income (Loss) | 2,875 | (61,861) | 13,813 | (5,623) |
Comprehensive Income | 165,445 | 156,965 | 611,250 | 714,592 |
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interest | (510) | (540) | (338) | (206) |
Comprehensive Income Attributable to Hormel Foods Corporation | $ 165,955 | $ 157,505 | $ 611,588 | $ 714,798 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands | Jul. 30, 2023 | Oct. 30, 2022 |
Assets | ||
Cash and Cash Equivalents | $ 669,124 | $ 982,107 |
Short-term Marketable Securities | 17,423 | 16,149 |
Accounts Receivable (Net of Allowance for Doubtful Accounts of $3,561 at July 30, 2023, and $3,507 at October 30, 2022) | 786,246 | 867,593 |
Inventories | 1,737,865 | 1,716,059 |
Taxes Receivable | 7,498 | 7,177 |
Prepaid Expenses and Other Current Assets | 36,613 | 48,041 |
Total Current Assets | 3,254,770 | 3,637,125 |
Goodwill | 4,931,590 | 4,925,829 |
Other Intangibles | 1,790,761 | 1,803,027 |
Pension Assets | 235,943 | 245,566 |
Investments in Affiliates | 743,474 | 271,058 |
Other Assets | 338,741 | 283,169 |
Property, Plant, and Equipment | ||
Land | 72,648 | 74,303 |
Buildings | 1,426,048 | 1,398,255 |
Equipment | 2,717,472 | 2,636,660 |
Construction in Progress | 216,478 | 216,246 |
Less: Allowance for Depreciation | (2,301,168) | (2,184,319) |
Net Property, Plant, and Equipment | 2,131,479 | 2,141,146 |
Total Assets | 13,426,757 | 13,306,919 |
Liabilities and Shareholders' Investment | ||
Accounts Payable | 703,407 | 816,604 |
Accrued Expenses | 119,464 | 58,801 |
Accrued Marketing Expenses | 100,974 | 113,105 |
Employee Related Expenses | 241,879 | 279,072 |
Interest and Dividends Payable | 158,335 | 163,963 |
Taxes Payable | 49,583 | 32,925 |
Current Maturities of Long-term Debt | 946,981 | 8,796 |
Total Current Liabilities | 2,320,622 | 1,473,266 |
Long-term Debt Less Current Maturities | 2,360,380 | 3,290,549 |
Pension and Post-retirement Benefits | 396,297 | 385,832 |
Deferred Income Taxes | 467,827 | 475,212 |
Other Long-term Liabilities | 163,768 | 141,840 |
Shareholders' Investment | ||
Preferred Stock | 0 | 0 |
Additional Paid-in Capital | 499,304 | 469,468 |
Accumulated Other Comprehensive Loss | (241,610) | (255,561) |
Retained Earnings | 7,447,567 | 7,313,374 |
Hormel Foods Corporation Shareholders' Investment | 7,713,265 | 7,535,284 |
Noncontrolling Interest | 4,598 | 4,936 |
Total Shareholders' Investment | 7,717,863 | 7,540,219 |
Total Liabilities and Shareholders' Investment | 13,426,757 | 13,306,919 |
Common Stock, Non-voting | ||
Shareholders' Investment | ||
Common Stock | 0 | 0 |
Common Stock | ||
Shareholders' Investment | ||
Common Stock | $ 8,005 | $ 8,002 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION (PARENTHETICAL) - USD ($) $ in Thousands | Jul. 30, 2023 | Oct. 30, 2022 |
Accounts Receivable, Allowance for Doubtful Accounts | $ 3,561 | $ 3,507 |
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) | 546,466,703 | 546,237,051 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Increase (Decrease) in Shareholders' Investment | ||||
Beginning balance | $ 7,691,615 | $ 7,345,214 | $ 7,540,219 | $ 6,978,360 |
Net Earnings | 162,571 | 218,826 | 597,437 | 720,215 |
Other Comprehensive Income (Loss) | 2,875 | (61,861) | 13,813 | (5,623) |
Purchases of Common Stock | (12,303) | |||
Stock-based Compensation Expense | 5,034 | 4,566 | 20,946 | 20,933 |
Exercise of Stock Options/Restricted Shares | 5,933 | 2,872 | 8,489 | 78,058 |
Shares Retired | 0 | |||
Declared Dividends | (150,165) | (142,668) | (450,738) | (424,996) |
Ending balance | $ 7,717,863 | $ 7,366,948 | $ 7,717,863 | $ 7,366,948 |
Common Stock | ||||
Increase (Decrease) in Shareholders' Investment | ||||
Beginning balance (in shares) | 546,255 | 546,053 | 546,237 | 542,412 |
Beginning balance | $ 8,002 | $ 8,000 | $ 8,002 | $ 7,946 |
Stock-based Compensation Expense (in shares) | 44 | 37 | ||
Stock-based Compensation Expense | $ 1 | |||
Exercise of Stock Options/Restricted Shares (in shares) | 212 | 103 | 496 | 3,706 |
Exercise of Stock Options/Restricted Shares | $ 3 | $ 2 | $ 7 | $ 54 |
Shares Retired (in shares) | (310) | |||
Shares Retired | $ (5) | |||
Ending balance (in shares) | 546,467 | 546,156 | 546,467 | 546,156 |
Ending balance | $ 8,005 | $ 8,001 | $ 8,005 | $ 8,001 |
Treasury Stock | ||||
Increase (Decrease) in Shareholders' Investment | ||||
Beginning balance (in shares) | 0 | 0 | 0 | 0 |
Beginning balance | $ 0 | $ 0 | $ 0 | $ 0 |
Purchases of Common Stock (in shares) | (310) | |||
Purchases of Common Stock | $ (12,303) | |||
Shares Retired (in shares) | (310) | |||
Shares Retired | $ 12,303 | |||
Ending balance (in shares) | 0 | 0 | 0 | 0 |
Ending balance | $ 0 | $ 0 | $ 0 | $ 0 |
Additional Paid-in Capital | ||||
Increase (Decrease) in Shareholders' Investment | ||||
Beginning balance | 488,100 | 451,836 | 469,468 | 360,336 |
Stock-based Compensation Expense | 5,034 | 4,566 | 20,946 | 20,933 |
Exercise of Stock Options/Restricted Shares | 5,931 | 2,870 | 8,482 | 78,003 |
Shares Retired | (277) | |||
Declared Dividends | 239 | 685 | ||
Ending balance | 499,304 | 459,272 | 499,304 | 459,272 |
Retained Earnings | ||||
Increase (Decrease) in Shareholders' Investment | ||||
Beginning balance | 7,435,292 | 7,100,730 | 7,313,374 | 6,881,870 |
Net Earnings | 162,679 | 218,915 | 597,637 | 720,103 |
Shares Retired | (12,021) | |||
Declared Dividends | (150,404) | (142,668) | (451,423) | (424,996) |
Ending balance | 7,447,567 | 7,176,977 | 7,447,567 | 7,176,977 |
Accumulated Other Comprehensive Income (Loss) | ||||
Increase (Decrease) in Shareholders' Investment | ||||
Beginning balance | (244,887) | (221,164) | (255,561) | (277,269) |
Other Comprehensive Income (Loss) | 3,277 | (61,410) | 13,950 | (5,305) |
Ending balance | (241,610) | (282,574) | (241,610) | (282,574) |
Non- controlling Interest | ||||
Increase (Decrease) in Shareholders' Investment | ||||
Beginning balance | 5,108 | 5,812 | 4,936 | 5,478 |
Net Earnings | (108) | (89) | (200) | 112 |
Other Comprehensive Income (Loss) | (402) | (451) | (138) | (318) |
Ending balance | $ 4,598 | $ 5,272 | $ 4,598 | $ 5,272 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT (PARENTHETICAL) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Declared Dividends (in dollars per share) | $ 0.2750 | $ 0.2600 | $ 0.8250 | $ 0.7800 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 30, 2023 | Jul. 31, 2022 | |
Operating Activities | ||
Net Earnings | $ 597,437 | $ 720,215 |
Adjustments to Reconcile to Net Cash Provided by (Used in) Operating Activities: | ||
Depreciation and Amortization | 216,432 | 191,568 |
Equity in Earnings of Affiliates | (42,213) | (19,951) |
Distributions Received from Equity Method Investees | 28,160 | 30,539 |
Provision for Deferred Income Taxes | (273) | 71,427 |
Loss (Gain) on Sales of Property, Plant, and Equipment | (314) | 5,098 |
Non-cash Investment Activities | (12,047) | 13,610 |
Stock-based Compensation Expense | 20,946 | 20,933 |
Changes in Operating Assets and Liabilities: | ||
Decrease (Increase) in Accounts Receivable | 81,423 | 96,674 |
Decrease (Increase) in Inventories | (20,536) | (311,312) |
Decrease (Increase) in Prepaid Expenses and Other Assets | (52,117) | (3,666) |
Increase (Decrease) in Pension and Post-retirement Benefits | 29,571 | (6,906) |
Increase (Decrease) in Accounts Payable and Accrued Expenses | (131,204) | (84,384) |
Increase (Decrease) in Net Income Taxes Payable | 13,491 | 39,312 |
Net Cash Provided by (Used in) Operating Activities | 728,756 | 763,157 |
Investing Activities | ||
Net (Purchase) Sale of Securities | (49) | |
Net (Purchase) Sale of Securities | 1,296 | |
Purchases of Property, Plant, and Equipment | (168,529) | (189,184) |
Proceeds from Sales of Property, Plant, and Equipment | 5,306 | 1,044 |
Proceeds from (Purchases of) Affiliates and Other Investments | (427,195) | 8,275 |
Proceeds from Company-owned Life Insurance | 1,980 | 6,742 |
Net Cash Provided by (Used in) Investing Activities | (588,489) | (171,827) |
Financing Activities | ||
Proceeds from Long-term Debt | 1,980 | 0 |
Repayments of Long-term Debt and Finance Leases | (6,584) | (6,498) |
Dividends Paid on Common Stock | (442,560) | (415,923) |
Share Repurchase | (12,303) | 0 |
Proceeds from Exercise of Stock Options | 8,489 | 77,958 |
Net Cash Provided by (Used in) Financing Activities | (450,977) | (344,463) |
Effect of Exchange Rate Changes on Cash | (2,273) | (10,054) |
Increase (Decrease) in Cash and Cash Equivalents | (312,983) | 236,814 |
Cash and Cash Equivalents at Beginning of Year | 982,107 | 613,530 |
Cash and Cash Equivalents at End of Period | $ 669,124 | $ 850,344 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jul. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The accompanying unaudited consolidated financial statements of Hormel Foods Corporation (the Company) have been prepared in accordance with accounting principles generally accepted in the United States (U.S.) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include certain information and footnotes required by U.S. generally accepted accounting principles (GAAP) for comprehensive financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results and cash flows for the interim period are not necessarily indicative of the results that may be expected for the full year. These statements should be reviewed in conjunction with the consolidated financial statements and associated notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 30, 2022. The significant accounting policies used in preparing these interim consolidated financial statements are consistent with those described in Note A - Summary of Significant Accounting Policies to the consolidated financial statements in the Form 10-K. The Company has determined there have been no material changes in the Company’s significant accounting policies, including estimates and assumptions, as disclosed in its Annual Report on Form 10-K for the fiscal year ended October 30, 2022. 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. Reportable Segments: As of October 30, 2022, the Company had four operating and reportable segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International and Other. At the beginning of fiscal 2023, the Company transitioned to a new strategic operating model, which aligns its businesses to be more agile, consumer and customer focused, and market driven. Effective on October 31, 2022, the Company operates with the following three operating and reportable segments: Retail, Foodservice, and International, which are consistent with how the Company's chief operating decision maker assesses performance and allocates resources. This change had no impact on the consolidated results of operations, financial position, shareholders' investment, or cash flows. Prior period segment results have been retrospectively recast to reflect the new reportable segments. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Jul. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE B - GOODWILL AND INTANGIBLE ASSETS Goodwill: In the first quarter of fiscal 2023, as a result of the organizational changes referenced in Note A - Summary of Significant Accounting Policies, the Company conducted an assessment of its operating segments and reporting units. Based on this analysis, goodwill was reallocated using the relative fair value approach. The change in the carrying amount of goodwill for the nine months ended July 30, 2023, is: in thousands Retail Foodservice International Total Balance at October 30, 2022 $ 2,916,796 $ 1,750,594 $ 258,440 $ 4,925,829 Foreign Currency Translation — — 5,761 5,761 Balance at July 30, 2023 $ 2,916,796 $ 1,750,594 $ 264,200 $ 4,931,590 Intangible Assets: The carrying amounts for indefinite-lived intangible assets are: in thousands July 30, 2023 October 30, 2022 Brands/Tradenames/Trademarks $ 1,665,190 $ 1,665,190 Other Intangibles 184 184 Foreign Currency Translation (5,380) (6,599) Total $ 1,659,994 $ 1,658,775 The gross carrying amount and accumulated amortization for definite-lived intangible assets are: July 30, 2023 October 30, 2022 in thousands Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer Lists/Relationships $ 168,239 $ (79,450) $ 168,239 $ (69,779) Other Intangibles 59,241 (14,794) 59,241 (11,606) Tradenames/Trademarks 6,540 (4,779) 10,536 (7,828) Foreign Currency Translation — (4,229) — (4,551) Total $ 234,020 $ (103,252) $ 238,016 $ (93,764) Amortization expense is as follows: Quarter Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Amortization Expense $ 4,605 $ 4,838 $ 13,806 $ 14,474 Estimated annual amortization expense for the five fiscal years after October 30, 2022, is as follows: in thousands Amortization Expense 2023 $ 18,320 2024 16,331 2025 14,628 2026 14,172 2027 13,940 |
INVESTMENTS IN AFFILIATES
INVESTMENTS IN AFFILIATES | 9 Months Ended |
Jul. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN AFFILIATES | NOTE C - INVESTMENTS IN 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 method. These investments, including balances due to or from affiliates, are reflected in the Consolidated Condensed Statements of Financial Position as Investments in Affiliates. Financial results for certain entities are reported on a 30- to 90-day lag. The Company reviewed the investments in affiliates and determined that no other-than-temporary impairment existed as of July 30, 2023. On December 15, 2022, the Company purchased a 29% common stock interest in PT Garudafood Putra Putri Jaya Tbk (Garudafood), a food and beverage company in Indonesia, from various minority shareholders. On April 12, 2023, the Company purchased additional shares increasing the ownership interest to 30%. This investment expands the Company's presence in Southeast Asia and supports the global execution of the snacking and entertaining strategic priority. The Company has the ability to exercise significant influence, but not control, over Garudafood; therefore, the investment is accounted for under the equity method. The Company obtained the Garudafood interest for a purchase price of $425.8 million, including associated transaction costs. The transaction was funded using the Company's cash on hand. Based on a third-party valuation, the Company's basis difference between the fair value of the investment and proportionate share of the carrying value of Garudafood's net assets is $324.8 million. The basis difference related to inventory, property, plant and equipment, and certain intangible assets is being amortized through Equity in Earnings of Affiliates over the associated useful lives. As of July 30, 2023, the remaining basis difference was $335.3 million, which includes the impact of foreign currency translation. Based on quoted market prices, the fair value of the common stock held in Garudafood was $348.2 million as of July 28, 2023. Equity in Earnings of Affiliates consists of: Quarter Ended Nine Months Ended in thousands % Owned Segment July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 MegaMex Foods, LLC 50% Retail $ 8,099 $ 4,555 $ 34,712 $ 14,562 Other Joint Ventures Various (20-50%) International 1,685 2,582 7,501 5,390 Total $ 9,784 $ 7,138 $ 42,213 $ 19,951 Distributions received from equity method investees include: Quarter Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Dividends $ 14,509 $ — $ 28,160 $ 30,539 The Company recognized a basis difference of $21.3 million associated with the formation of MegaMex Foods, LLC, of which $9.5 million is remaining as of July 30, 2023. This difference is being amortized through Equity in Earnings of Affiliates. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Jul. 30, 2023 | |
Inventory, Net [Abstract] | |
INVENTORIES | NOTE D - INVENTORIES Principal components of inventories are: in thousands July 30, 2023 October 30, 2022 Finished Products $ 969,749 $ 974,160 Raw Materials and Work-in-Process 479,371 440,193 Operating Supplies 182,586 206,289 Maintenance Materials and Parts 106,159 95,417 Total $ 1,737,865 $ 1,716,059 |
DERIVATIVES AND HEDGING
DERIVATIVES AND HEDGING | 9 Months Ended |
Jul. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING | NOTE E - DERIVATIVES AND HEDGING The Company uses hedging programs to manage risk associated with commodity purchases and interest rates. These programs utilize futures, swaps, and options contracts to manage the Company’s exposure to market fluctuations. The Company has determined its designated hedging programs to be highly effective in offsetting the changes in fair value or cash flows generated by the items hedged. Effectiveness testing is performed on a quarterly basis to ascertain a high level of effectiveness for cash flow and fair value hedging programs. If the requirements of hedge accounting are no longer met, hedge accounting is discontinued immediately and any future changes to fair value are recorded directly through earnings. Cash Flow Commodity Hedges: The Company designates grain, lean hog, and natural gas futures, swaps, and options contracts used to offset price fluctuations in the Company’s future purchases of these commodities 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 or natural gas 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 and the gain or loss on the hedged purchase commitment are marked-to-market through earnings and recorded in the Consolidated Condensed Statements of Financial Position as a Current Asset and Current Liability, respectively. Gains or losses related to these fair value hedges are recognized through Cost of Products Sold in the periods in which the hedged transactions affect earnings. Cash Flow Interest Rate Hedges: In the second quarter of fiscal 2021, the Company designated two separate interest rate locks as cash flow hedges to manage interest rate risk associated with the anticipated debt transactions required to fund the acquisition of the Planters ® snack nuts business. The total notional amount of the Company's locks was $1.25 billion. In the third quarter of fiscal 2021, the associated unsecured senior notes were issued with a tenor of seven were lifted (See Note J - Long-Term Debt and Other Borrowing Arrangements). Mark-to-market gains and losses on these instruments were deferred as a component of AOCL. The resulting gain in AOCL is reclassified to Interest Expense in the period in which the hedged transactions affect earnings. Fair Value Interest Rate Hedge: In the first quarter of fiscal 2022, the Company entered into an interest rate swap to protect against changes in the fair value of a portion of previously issued senior unsecured notes attributable to the change in the benchmark interest rate. The hedge specifically designated the last $450 million of the notes due June 2024 (the 2024 Notes). The Company terminated the swap in the fourth quarter of fiscal 2022. The loss related to the swap was recorded as a fair value hedging adjustment to the hedged debt and will be amortized through earnings over the remaining life of the debt. Other Derivatives: The Company holds certain futures and swap contracts to manage the Company's exposure to fluctuations in grain and pork commodity markets. The Company has not applied hedge accounting to these positions. Activity related to derivatives not designated as hedges is immaterial to the consolidated financial statements. Volume: The Company's outstanding contracts related to its commodity hedging programs include: Volume in millions July 30, 2023 October 30, 2022 Corn 30.0 bushels 34.3 bushels Lean Hogs 151.9 pounds 177.5 pounds Natural Gas 2.1 MMBtu — MMBtu 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 July 30, October 30, Commodity Contracts (1) Other Current Assets $ (6,510) $ 13,504 (1) Amounts represent the gross fair value of commodity derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its commodity hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The amount or timing of cash collateral balances may impact the classification of the commodity derivative on the Consolidated Condensed Statements of Financial Position. The gross liability position as of July 30, 2023, includes the right to reclaim net cash collateral of $27.3 million contained within the master netting arrangement. The gross asset position as of October 30, 2022, is offset by the obligation to return net cash collateral of $1.3 million. See Note H - Fair Value Measurements for a discussion of these net amounts as reported on the Consolidated Condensed Statements of Financial Position. Fair Value Hedge - Assets (Liabilities): The carrying amount of the Company's fair value hedged assets (liabilities) are: Carrying Amount of Hedged in thousands Location on Consolidated Condensed Statements of Financial Position July 30, October 30, Commodity Contracts Accounts Payable (1) $ 2,664 $ 5,725 Interest Rate Contracts Current Maturities of Long-term Debt (2) (439,424) — Interest Rate Contracts Long-term Debt Less Current Maturities — (430,050) (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 July 30, 2023, the carrying amount of the 2024 Notes included a cumulative fair value hedging adjustment of $10.6 million from discontinued hedges. In the third quarter of fiscal 2023, the 2024 Notes and the fair value hedging adjustment were reclassified from Long-term Debt less Current Maturities to Current Maturities of Long-term Debt on the Consolidated Condensed Statements of Financial Position. Accumulated Other Comprehensive Loss Impact: As of July 30, 2023, the Company included in AOCL hedging losses (before tax) of $14.3 million on commodity contracts and gains of $12.7 million related to interest rate settled positions. The Company expects to recognize the majority of the losses on commodity contracts over the next twelve months. Gains on interest rate contracts offset the hedged interest payments over the tenor of the associated debt instruments. The effect on AOCL for gains or losses (before tax) related to the Company's derivative instruments are: Gain/(Loss) Recognized in AOCL (1) Gain/(Loss) Reclassified from AOCL into Earnings (1) Location on Consolidated Statements of Operations Quarter Ended Quarter Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Cash Flow Hedges Commodity Contracts $ (2,600) $ (24,312) $ (5,758) $ 21,216 Cost of Products Sold Excluded Component (2) 423 (576) — — Interest Rate Contracts — — 247 247 Interest Expense Gain/(Loss) Recognized in AOCL (1) Gain/(Loss) Reclassified from AOCL into Earnings (1) Location on Consolidated Statements of Operations Nine Months Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Cash Flow Hedges Commodity Contracts $ (34,151) $ 46,299 $ 5,833 $ 40,231 Cost of Products Sold Excluded Component (2) (268) (4,020) — — Interest Rate Contracts — — 741 741 Interest Expense (1) See Note G - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. (2) Represents the time value of 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 Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Net Earnings Attributable to Hormel Foods Corporation $ 162,679 $ 218,915 $ 597,637 $ 720,103 Cash Flow Hedges - Commodity Contracts Gain (Loss) Reclassified from AOCL (5,758) 21,216 5,833 38,561 Amortization of Excluded Component from Options (1,531) (1,145) (4,441) (3,089) Gain (Loss) Reclassified from AOCL Due to Discontinuance of Cash Flow Hedges (1) — — — 1,620 Fair Value Hedges - Commodity Contracts Gain (Loss) on Commodity Futures (2) 1,019 (6,758) (440) (20,165) Total Gain (Loss) on Commodity Contracts (3) (6,271) 13,313 952 16,927 Cash Flow Hedges - Interest Rate Locks Gain (Loss) Reclassified from AOCL 247 247 741 741 Fair Value Hedge - Interest Rate Swap Gain (Loss) on Interest Rate Swap — (222) — 1,270 Amortization of Loss Due to Discontinuance of Fair Value Hedge (4) (3,125) — (9,374) — Total Gain (Loss) on Interest Rate Contracts (5) (2,878) 25 (8,633) 2,011 Total Gain (Loss) Recognized in Earnings $ (9,148) $ 13,338 $ (7,681) $ 18,938 (1) During the second quarter of fiscal 2022, the Company discontinued hedge accounting on 0.6 million bushels of corn usage that was deemed no longer probable to occur. A gain of $1.7 million related to the discontinued hedges and an immaterial loss related to the excluded component from options was reclassified directly into earnings. (2) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the quarter ended July 30, 2023, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis. (3) Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold. (4) Represents the fair value hedging adjustment amortized through earnings. (5) 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 | 9 Months Ended |
Jul. 30, 2023 | |
Retirement Benefits [Abstract] | |
PENSION AND OTHER POST-RETIREMENT BENEFITS | NOTE F - PENSION AND OTHER POST-RETIREMENT BENEFITS Net periodic benefit cost for pension and other post-retirement benefit plans consists of: Pension Benefits Quarter Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Service Cost $ 8,902 $ 10,019 $ 26,705 $ 30,057 Interest Cost 17,157 12,639 51,472 37,919 Expected Return on Plan Assets (19,571) (27,062) (58,714) (81,186) Amortization of Prior Service Cost (461) (374) (1,383) (1,122) Recognized Actuarial (Gain) Loss 3,325 3,132 9,976 9,397 Net Periodic Benefit Cost $ 9,353 $ (1,645) $ 28,058 $ (4,936) Post-retirement Benefits Quarter Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Service Cost $ 62 $ 118 $ 185 $ 351 Interest Cost 3,016 1,923 9,044 5,763 Amortization of Prior Service Cost 2 2 6 6 Recognized Actuarial (Gain) Loss (7) 610 (21) 1,829 Net Periodic Benefit Cost $ 3,073 $ 2,652 $ 9,214 $ 7,950 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Jul. 30, 2023 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | NOTE G - ACCUMULATED OTHER COMPREHENSIVE LOSS Components of Accumulated Other Comprehensive Loss are as follows: in thousands Foreign Pension & Derivatives & Equity Accumulated Balance at April 30, 2023 $ (52,124) $ (190,451) $ (3,720) $ 1,408 $ (244,887) Unrecognized Gains (Losses) 0 0 Gross (10,170) 39 (2,177) 8,733 (3,575) Tax Effect — — 542 — 542 Reclassification into Net Earnings 0 0 0 0 Gross — 2,859 (1) 5,511 (2) — 8,371 Tax Effect — (703) (1,358) — (2,062) Change Net of Tax (10,170) 2,195 2,518 8,733 3,277 Balance at July 30, 2023 $ (62,293) $ (188,256) $ (1,202) $ 10,141 $ (241,610) Balance at October 30, 2022 $ (89,793) $ (195,624) $ 29,856 $ — $ (255,561) Unrecognized Gains (Losses) Gross 27,499 1,166 (34,419) 10,141 4,388 Tax Effect — (266) 8,394 — 8,128 Reclassification into Net Earnings Gross — 8,578 (1) (6,574) (2) — 2,004 Tax Effect — (2,110) 1,541 — (570) Change Net of Tax 27,499 7,368 (31,058) 10,141 13,950 Balance at July 30, 2023 $ (62,293) $ (188,256) $ (1,202) $ 10,141 $ (241,610) (1) Included in the computation of net periodic benefit cost. See Note F - Pension and Other Post-Retirement Benefits for additional information. (2) Included in Cost of Products Sold and Interest Expense in the Consolidated Statements of Operations. See Note E - Derivatives and Hedging for additional information. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Jul. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE H - FAIR VALUE MEASUREMENTS Accounting guidance establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of the three levels below based on the inputs used in the valuation. Level 1: Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable inputs, other than those included in Level 1, based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets. Level 3: Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances. The Company’s financial assets and liabilities carried at fair value on a recurring basis and their level within the fair value hierarchy are presented in the tables below. Fair Value Measurements at July 30, 2023 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) $ 669,124 $ 668,157 $ 966 $ — Short-term Marketable Securities (2) 17,423 2,818 14,606 — Other Trading Securities (3) 197,065 — 197,065 — Commodity Derivatives (4) 11,381 11,558 (176) — Total Assets at Fair Value $ 894,994 $ 682,533 $ 212,461 $ — Liabilities at Fair Value Deferred Compensation (3) $ 60,789 $ — $ 60,789 $ — Total Liabilities at Fair Value $ 60,789 $ — $ 60,789 $ — Fair Value Measurements at October 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) $ 982,107 $ 980,730 $ 1,377 $ — Short-term Marketable Securities (2) 16,149 8,763 7,386 — Other Trading Securities (3) 186,243 — 186,243 — Commodity Derivatives (4) 12,448 12,228 220 — Total Assets at Fair Value $ 1,196,947 $ 1,001,721 $ 195,226 $ — Liabilities at Fair Value Deferred Compensation (3) $ 57,790 $ — $ 57,790 $ — Total Liabilities at Fair Value $ 57,790 $ — $ 57,790 $ — The following methods and assumptions were used to estimate the fair value of the financial assets and liabilities above: (1) The Company’s cash equivalents considered Level 1 consist primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts, and have a maturity date of three months or less. Cash equivalents considered Level 2 are funds holding agency bonds or securities recognized at amortized cost. (2) The Company holds securities as part of a portfolio maintained to generate investment income and to provide cash for operations of the Company, if necessary. The portfolio is managed by a third party who is responsible for daily trading activities, and all assets within the portfolio are highly liquid. The cash, U.S. government securities, and money market funds rated AAA held by the portfolio are classified as Level 1. The current investment portfolio also includes corporate bonds and other asset backed securities for which there is an active, quoted market. Market prices are obtained from a variety of industry providers, large financial institutions, and other third-party sources to calculate a representative daily market value, and therefore, these securities are classified as Level 2. (3) The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred compensation plans. The majority of the funds held in the rabbi trust relate to supplemental executive retirement plans and have been invested primarily in fixed income funds managed by a third party. The declared rate on these funds is set based on a formula using the yield of the general account investment portfolio supporting the fund as adjusted for expenses and other charges. The rate is guaranteed for one year at issue and may be reset annually on the policy anniversary, subject to a guaranteed minimum rate. As the value is based on adjusted market rates and the fixed rate is only reset on an annual basis, these funds are classified as Level 2. Under the Company's deferred compensation plans, participants can defer certain types of compensation and elect to receive a return based on the changes in fair value of various investment options which include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the Internal Revenue Service (IRS) applicable federal rates. These liabilities are classified as Level 2. The Company maintains funding in the rabbi trust generally mirroring the selections within the deferred compensation plans. These funds are managed by a third-party insurance policy, the values of which represent their cash surrender value based on the fair value of the underlying investments in the account. These policies are classified as Level 2. The rabbi trust is included in Other Assets and deferred compensation liabilities in Other Long-term Liabilities on the Consolidated Condensed Statements of Financial Position. Securities held by the rabbi trust are classified as trading securities. Unrealized gains and losses associated with these investments are included in the Company's earnings. During the quarter and nine months ended July 30, 2023, securities held by the rabbi trust generated gains of $5.1 million and $12.1 million, respectively, compared to losses of $0.1 million and $12.1 million for the quarter and nine months ended July 31, 2022, respectively. (4) The Company’s commodity derivatives represent futures, swaps, and options contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn, natural gas, hogs, and pork, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures and options contracts for corn are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available, and these contracts are classified as Level 1. The Company holds natural gas and pork swap contracts that are over-the-counter instruments classified as Level 2. The value of the natural gas swap contracts is calculated using quoted prices from the New York Mercantile Exchange, and the value of the pork swap contracts are calculated using a futures implied USDA estimated pork cut-out value. All derivatives are reviewed for potential credit risk and risk of nonperformance. The net balance for commodity derivatives is included in Other Current Assets or Accounts Payable, as appropriate, in the Consolidated Condensed Statements of Financial Position. As of July 30, 2023, the Company has recognized the right to reclaim net cash collateral of $27.3 million from various counterparties (including cash of $31.1 million less $3.8 million of realized loss). As of October 30, 2022, the Company had recognized the obligation to return net cash collateral of $1.3 million from various counterparties (including cash of $27.5 million less $26.2 million of realized gain). The Company’s financial assets and liabilities include accounts receivable, accounts payable, and other liabilities, for which carrying value approximates fair value. The Company does not carry its long-term debt at fair value on its Consolidated Condensed Statements of Financial Position. The fair value of long-term debt, utilizing discounted cash flows (Level 2), was $2.8 billion as of July 30, 2023, and $2.7 billion as of October 30, 2022. See Note J - Long-Term Debt and Other Borrowing Arrangements for additional information. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jul. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE I - COMMITMENTS AND CONTINGENCIES Except as described below, there were no material changes outside the ordinary course of business during the quarter and nine months ended July 30, 2023, to the contractual obligations and other commitments last disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 30, 2022. On August 15, 2023, the Company received an unexpected, unfavorable arbitration ruling involving an isolated commercial dispute with a third party. The estimated liability of $70.0 million is reflected within Selling, General, and Administrative expense in the Consolidated Statements of Operations for the quarter and nine months ended July 30, 2023, and Accrued Expenses on the Consolidated Condensed Statements of Financial Position as of July 30, 2023. The associated one-time payment is expected to be made in the fourth quarter of fiscal 2023 in accordance with the terms of the arbitrator’s ruling. The adverse arbitration ruling is not subject to further appeal or judicial review. |
LONG-TERM DEBT AND OTHER BORROW
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS | 9 Months Ended |
Jul. 30, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS | NOTE J - LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS Long-term Debt consists of: in thousands July 30, 2023 October 30, 2022 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 (7,199) (7,750) Unamortized Debt Issuance Costs (17,172) (19,856) Interest Rate Swap Liabilities (1) (10,576) (19,950) Finance Lease Liabilities 38,211 44,473 Other Financing Arrangements 4,098 2,429 Total 3,307,361 3,299,345 Less: Current Maturities of Long-term Debt 946,981 8,796 Long-term Debt Less Current Maturities $ 2,360,380 $ 3,290,549 (1) See Note E - Derivatives and Hedging for additional information. Senior Unsecured Notes: On June 3, 2021, the Company issued $950.0 million aggregate principal amount of its 0.650% notes due 2024 (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). The 2024 Notes may be redeemed in whole or in part one year after their issuance without penalty for early partial payments or full redemption. The 2028 Notes and 2051 Notes may be redeemed in whole or in part at any time at the applicable redemption price. Interest will accrue per annum at the stated rates with interest on the notes being paid semi-annually in arrears on June 3 and December 3 of each year, commencing December 3, 2021. Interest rate risk was hedged utilizing interest rate locks on the 2028 Notes and 2051 Notes. The Company lifted the hedges in conjunction with the issuance of these notes. See Note E - Derivatives and Hedging for additional information. If a change of control triggering event occurs, the Company must offer to purchase the notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. During the third quarter of fiscal 2023, the 2024 Notes were reclassified to Current Maturities of Long-term Debt on the Consolidated Condensed Statement of Financial Position. 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. Unsecured Revolving Credit Facility: On May 6, 2021, the Company entered into an unsecured revolving credit agreement with Wells Fargo Bank, National Association as administrative agent, swingline lender and issuing lender, U.S. Bank National Association, JPMorgan Chase Bank, N.A. and BofA Securities, Inc. as syndication agents and the lenders party thereto. The revolving credit agreement provides for an unsecured revolving credit facility with an aggregate principal commitment amount at any time outstanding of up to $750.0 million with an uncommitted increase option of an additional $375.0 million upon the satisfaction of certain conditions. On April 17, 2023, the Company entered into a first amendment (Amendment) to the Company’s $750.0 million revolving credit agreement. The Amendment provides for, among other things (i) the replacement of London Interbank Offered Rate (LIBOR) with Term Secured Overnight Financing Rate (SOFR) and Daily Simple Singapore Overnight Rate Average (SORA) for the Eurocurrency Rate for Dollars and Singapore Dollars, including applicable credit spread adjustments and relevant SOFR benchmark provisions, (ii) permitting two one-year extension options to be exercised at any anniversary, (iii) removing the change in debt ratings notice requirement, (iv) shortening the notice period requirements for Base Rate Loans to allow for same day notice, and (v) increasing the number of permitted interest periods from 8 to 15. The unsecured revolving line of credit bears interest, at the Company’s election, at either a Base Rate plus margin of 0.0% to 0.150% or the Adjusted Term SOFR, Adjusted Daily Simple Risk-Free Rate (RFR) or Eurocurrency Rate plus margin of 0.575% to 1.150% and a variable fee of 0.050% to 0.100% is paid for the availability of this credit line. Extensions of credit under the facility may be made in the form of revolving loans, swingline loans, and letters of credit. The lending commitments under the agreement are scheduled to expire on May 6, 2026, at which time the Company will be required to pay in full all obligations then outstanding. As of July 30, 2023, and October 30, 2022, 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 July 30, 2023, the Company was in compliance with all of these covenants. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Jul. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE K - INCOME TAXES The Company's tax provision is determined using an estimated annual effective tax rate and adjusted for discrete taxable events that may occur during the quarter. The effects of tax legislation are recognized in the period in which the law is enacted. The deferred tax assets and liabilities are remeasured using enacted tax rates expected to apply to taxable income in the years the related temporary differences are anticipated to reverse. The Company's effective tax rate for the quarter and nine months ended July 30, 2023, was 21.7 percent and 22.2 percent, respectively, compared to 24.5 percent and 21.8 percent, respectively, for the corresponding periods a year ago. The Company benefited in the current quarter from favorable changes in certain U.S. income and deductions in the fiscal 2022 federal tax return filing. Unrecognized tax benefits, including interest and penalties, are recorded in Other Long-term Liabilities. These benefits, if recognized as of July 30, 2023, would impact the Company’s effective tax rate by $19.6 million compared to $19.5 million as of July 31, 2022. 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 quarters ended July 30, 2023, and July 31, 2022. The amount of accrued interest and penalties associated with unrecognized tax benefits was $3.2 million at July 30, 2023, and $4.8 million at July 31, 2022. The Company is regularly audited by federal and state taxing authorities. The IRS concluded their examination of fiscal year 2021 in the second quarter. Previously, the IRS placed the Company in the Bridge phase of the Compliance Assurance Process (CAP) for fiscal 2020. In this phase, the IRS will not accept any disclosures, conduct any reviews, or provide any assurances. The Company has elected to participate in CAP for fiscal years through 2023. The objective of CAP is to contemporaneously work with the IRS to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time. The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, as far back as 2015. While it is reasonably possible that one or more of these audits may be completed within the next 12 months and the related unrecognized tax benefits may change based on the status of the examinations, it is not possible to reasonably estimate the effect of any amount of such change to previously recorded uncertain tax positions. The Inflation Reduction Act of 2022 was signed into law on August 16, 2022. The 15% corporate minimum tax will apply to the Company in fiscal year 2024. |
EARNINGS PER SHARE DATA
EARNINGS PER SHARE DATA | 9 Months Ended |
Jul. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE DATA | NOTE L - EARNINGS PER SHARE DATA The reported net earnings attributable to the Company were used when computing basic and diluted earnings per share. The following table sets forth the shares used as the denominator for those computations: Quarter Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Basic Weighted-average Shares Outstanding 546,358 546,077 546,389 544,486 Dilutive Potential Common Shares 2,279 4,090 2,838 4,891 Diluted Weighted-average Shares Outstanding 548,637 550,167 549,227 549,377 Antidilutive Potential Common Shares 7,589 1,787 5,998 2,026 |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Jul. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE M - SEGMENT REPORTING The Company develops, processes, and distributes a wide array of food products in a variety of markets. As discussed in Note A - Summary of Significant Accounting Policies, the Company transitioned to a new operating model in the first quarter of fiscal 2023 and now reports its results in the following three segments: Retail, Foodservice, and International, which is consistent with how the Company's chief operating decision maker (CODM) assesses performance and allocates resources. Prior period segment results have been retrospectively recast to reflect the new reportable segments. The Retail segment consists primarily of the processing, marketing, and sale of food products sold predominantly in the retail market. This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture. The Foodservice segment consists primarily of the processing, marketing, and sale of food and nutritional products for foodservice, convenience store, and commercial customers. The International segment processes, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures and royalty arrangements. Intersegment sales are eliminated in consolidation and are not reviewed when evaluating segment performance. 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. Financial measures for each of the Company’s reportable segments and reconciliation to consolidated Earnings Before Income Taxes are set forth below. The Company's CODM reviews assets at a consolidated level and does not use assets by segment to evaluate performance or allocate resources. Therefore, the Company does not disclose assets by segment. 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 Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Net Sales Retail $ 1,891,746 $ 1,924,553 $ 5,765,786 $ 5,921,145 Foodservice 890,949 917,671 2,607,140 2,681,737 International 180,605 192,190 539,005 572,450 Total Net Sales $ 2,963,299 $ 3,034,414 $ 8,911,930 $ 9,175,331 Segment Profit Retail $ 151,128 $ 163,092 $ 459,031 $ 522,980 Foodservice 146,270 128,798 428,110 399,482 International 12,222 24,464 45,723 78,833 Total Segment Profit 309,619 316,354 932,863 1,001,295 Net Unallocated Expense 101,886 26,429 164,997 80,799 Noncontrolling Interest (108) (89) (200) 112 Earnings Before Income Taxes $ 207,626 $ 289,836 $ 767,666 $ 920,608 The Company’s products consist primarily of meat and other food products. Total revenue contributed by classes of similar products are: Quarter Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Perishable $ 2,068,787 $ 2,123,872 $ 6,222,485 $ 6,445,419 Shelf-stable 894,512 910,542 2,689,445 2,729,911 Total Net Sales $ 2,963,299 $ 3,034,414 $ 8,911,930 $ 9,175,331 Perishable includes fresh meats, frozen items, refrigerated meal solutions, bacon, sausages, hams, guacamole, and other items that require refrigeration. Shelf-stable includes canned luncheon meats, nut butters, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, nutritional food supplements, and other items that do not require refrigeration. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Pay vs Performance Disclosure | ||||
Net Earnings Attributable to Hormel Foods Corporation | $ 162,679 | $ 218,915 | $ 597,637 | $ 720,103 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jul. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jul. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited consolidated financial statements of Hormel Foods Corporation (the Company) have been prepared in accordance with accounting principles generally accepted in the United States (U.S.) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include certain information and footnotes required by U.S. generally accepted accounting principles (GAAP) for comprehensive financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results and cash flows for the interim period are not necessarily indicative of the results that may be expected for the full year. |
Reclassifications | Reclassifications: 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: Recently issued accounting standards or pronouncements not disclosed have been excluded as they are currently not relevant to the Company. |
Fair Value Measurements | Accounting guidance establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of the three levels below based on the inputs used in the valuation. Level 1: Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable inputs, other than those included in Level 1, based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets. Level 3: Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances. |
Segment Reporting | The Company develops, processes, and distributes a wide array of food products in a variety of markets. As discussed in Note A - Summary of Significant Accounting Policies, the Company transitioned to a new operating model in the first quarter of fiscal 2023 and now reports its results in the following three segments: Retail, Foodservice, and International, which is consistent with how the Company's chief operating decision maker (CODM) assesses performance and allocates resources. Prior period segment results have been retrospectively recast to reflect the new reportable segments. The Retail segment consists primarily of the processing, marketing, and sale of food products sold predominantly in the retail market. This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture. The Foodservice segment consists primarily of the processing, marketing, and sale of food and nutritional products for foodservice, convenience store, and commercial customers. The International segment processes, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures and royalty arrangements. Intersegment sales are eliminated in consolidation and are not reviewed when evaluating segment performance. 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) | 9 Months Ended |
Jul. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill | The change in the carrying amount of goodwill for the nine months ended July 30, 2023, is: in thousands Retail Foodservice International Total Balance at October 30, 2022 $ 2,916,796 $ 1,750,594 $ 258,440 $ 4,925,829 Foreign Currency Translation — — 5,761 5,761 Balance at July 30, 2023 $ 2,916,796 $ 1,750,594 $ 264,200 $ 4,931,590 |
Schedule of carrying amounts for indefinite-lived intangible assets | The carrying amounts for indefinite-lived intangible assets are: in thousands July 30, 2023 October 30, 2022 Brands/Tradenames/Trademarks $ 1,665,190 $ 1,665,190 Other Intangibles 184 184 Foreign Currency Translation (5,380) (6,599) Total $ 1,659,994 $ 1,658,775 |
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: July 30, 2023 October 30, 2022 in thousands Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer Lists/Relationships $ 168,239 $ (79,450) $ 168,239 $ (69,779) Other Intangibles 59,241 (14,794) 59,241 (11,606) Tradenames/Trademarks 6,540 (4,779) 10,536 (7,828) Foreign Currency Translation — (4,229) — (4,551) Total $ 234,020 $ (103,252) $ 238,016 $ (93,764) |
Schedule of amortization expense | Amortization expense is as follows: Quarter Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Amortization Expense $ 4,605 $ 4,838 $ 13,806 $ 14,474 |
Schedule of estimated annual amortization expense | Estimated annual amortization expense for the five fiscal years after October 30, 2022, is as follows: in thousands Amortization Expense 2023 $ 18,320 2024 16,331 2025 14,628 2026 14,172 2027 13,940 |
INVESTMENTS IN AFFILIATES (Tabl
INVESTMENTS IN AFFILIATES (Tables) | 9 Months Ended |
Jul. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of equity in earnings of affiliates | Equity in Earnings of Affiliates consists of: Quarter Ended Nine Months Ended in thousands % Owned Segment July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 MegaMex Foods, LLC 50% Retail $ 8,099 $ 4,555 $ 34,712 $ 14,562 Other Joint Ventures Various (20-50%) International 1,685 2,582 7,501 5,390 Total $ 9,784 $ 7,138 $ 42,213 $ 19,951 |
Schedule of distributions received from equity method investees | Distributions received from equity method investees include: Quarter Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Dividends $ 14,509 $ — $ 28,160 $ 30,539 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Jul. 30, 2023 | |
Inventory, Net [Abstract] | |
Schedule of principal components of inventories | Principal components of inventories are: in thousands July 30, 2023 October 30, 2022 Finished Products $ 969,749 $ 974,160 Raw Materials and Work-in-Process 479,371 440,193 Operating Supplies 182,586 206,289 Maintenance Materials and Parts 106,159 95,417 Total $ 1,737,865 $ 1,716,059 |
DERIVATIVES AND HEDGING (Tables
DERIVATIVES AND HEDGING (Tables) | 9 Months Ended |
Jul. 30, 2023 | |
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 July 30, October 30, Commodity Contracts (1) Other Current Assets $ (6,510) $ 13,504 (1) Amounts represent the gross fair value of commodity derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its commodity hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The amount or timing of cash collateral balances may impact the classification of the commodity derivative on the Consolidated Condensed Statements of Financial Position. The gross liability position as of July 30, 2023, includes the right to reclaim net cash collateral of $27.3 million contained within the master netting arrangement. The gross asset position as of October 30, 2022, is offset by the obligation to return net cash collateral of $1.3 million. See Note H - Fair Value Measurements for a discussion of these net amounts as reported on the Consolidated Condensed Statements of Financial Position. |
Schedule of fair value hedge assets (liabilities) | The carrying amount of the Company's fair value hedged assets (liabilities) are: Carrying Amount of Hedged in thousands Location on Consolidated Condensed Statements of Financial Position July 30, October 30, Commodity Contracts Accounts Payable (1) $ 2,664 $ 5,725 Interest Rate Contracts Current Maturities of Long-term Debt (2) (439,424) — Interest Rate Contracts Long-term Debt Less Current Maturities — (430,050) (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 July 30, 2023, the carrying amount of the 2024 Notes included a cumulative fair value hedging adjustment of $10.6 million from discontinued hedges. In the third quarter of fiscal 2023, the 2024 Notes and the fair value hedging adjustment were reclassified from Long-term Debt less Current Maturities to Current Maturities of Long-term Debt on the Consolidated Condensed Statements of Financial Position. |
Schedule of gains or losses related to derivative instruments | The effect on AOCL for gains or losses (before tax) related to the Company's derivative instruments are: Gain/(Loss) Recognized in AOCL (1) Gain/(Loss) Reclassified from AOCL into Earnings (1) Location on Consolidated Statements of Operations Quarter Ended Quarter Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Cash Flow Hedges Commodity Contracts $ (2,600) $ (24,312) $ (5,758) $ 21,216 Cost of Products Sold Excluded Component (2) 423 (576) — — Interest Rate Contracts — — 247 247 Interest Expense Gain/(Loss) Recognized in AOCL (1) Gain/(Loss) Reclassified from AOCL into Earnings (1) Location on Consolidated Statements of Operations Nine Months Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Cash Flow Hedges Commodity Contracts $ (34,151) $ 46,299 $ 5,833 $ 40,231 Cost of Products Sold Excluded Component (2) (268) (4,020) — — Interest Rate Contracts — — 741 741 Interest Expense (1) See Note G - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. (2) Represents the time value of 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 Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Net Earnings Attributable to Hormel Foods Corporation $ 162,679 $ 218,915 $ 597,637 $ 720,103 Cash Flow Hedges - Commodity Contracts Gain (Loss) Reclassified from AOCL (5,758) 21,216 5,833 38,561 Amortization of Excluded Component from Options (1,531) (1,145) (4,441) (3,089) Gain (Loss) Reclassified from AOCL Due to Discontinuance of Cash Flow Hedges (1) — — — 1,620 Fair Value Hedges - Commodity Contracts Gain (Loss) on Commodity Futures (2) 1,019 (6,758) (440) (20,165) Total Gain (Loss) on Commodity Contracts (3) (6,271) 13,313 952 16,927 Cash Flow Hedges - Interest Rate Locks Gain (Loss) Reclassified from AOCL 247 247 741 741 Fair Value Hedge - Interest Rate Swap Gain (Loss) on Interest Rate Swap — (222) — 1,270 Amortization of Loss Due to Discontinuance of Fair Value Hedge (4) (3,125) — (9,374) — Total Gain (Loss) on Interest Rate Contracts (5) (2,878) 25 (8,633) 2,011 Total Gain (Loss) Recognized in Earnings $ (9,148) $ 13,338 $ (7,681) $ 18,938 (1) During the second quarter of fiscal 2022, the Company discontinued hedge accounting on 0.6 million bushels of corn usage that was deemed no longer probable to occur. A gain of $1.7 million related to the discontinued hedges and an immaterial loss related to the excluded component from options was reclassified directly into earnings. (2) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the quarter ended July 30, 2023, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis. (3) Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold. (4) Represents the fair value hedging adjustment amortized through earnings. (5) 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 in millions July 30, 2023 October 30, 2022 Corn 30.0 bushels 34.3 bushels Lean Hogs 151.9 pounds 177.5 pounds Natural Gas 2.1 MMBtu — MMBtu |
PENSION AND OTHER POST-RETIRE_2
PENSION AND OTHER POST-RETIREMENT BENEFITS (Tables) | 9 Months Ended |
Jul. 30, 2023 | |
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 Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Service Cost $ 8,902 $ 10,019 $ 26,705 $ 30,057 Interest Cost 17,157 12,639 51,472 37,919 Expected Return on Plan Assets (19,571) (27,062) (58,714) (81,186) Amortization of Prior Service Cost (461) (374) (1,383) (1,122) Recognized Actuarial (Gain) Loss 3,325 3,132 9,976 9,397 Net Periodic Benefit Cost $ 9,353 $ (1,645) $ 28,058 $ (4,936) Post-retirement Benefits Quarter Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Service Cost $ 62 $ 118 $ 185 $ 351 Interest Cost 3,016 1,923 9,044 5,763 Amortization of Prior Service Cost 2 2 6 6 Recognized Actuarial (Gain) Loss (7) 610 (21) 1,829 Net Periodic Benefit Cost $ 3,073 $ 2,652 $ 9,214 $ 7,950 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Jul. 30, 2023 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of components of accumulated other comprehensive loss | Components of Accumulated Other Comprehensive Loss are as follows: in thousands Foreign Pension & Derivatives & Equity Accumulated Balance at April 30, 2023 $ (52,124) $ (190,451) $ (3,720) $ 1,408 $ (244,887) Unrecognized Gains (Losses) 0 0 Gross (10,170) 39 (2,177) 8,733 (3,575) Tax Effect — — 542 — 542 Reclassification into Net Earnings 0 0 0 0 Gross — 2,859 (1) 5,511 (2) — 8,371 Tax Effect — (703) (1,358) — (2,062) Change Net of Tax (10,170) 2,195 2,518 8,733 3,277 Balance at July 30, 2023 $ (62,293) $ (188,256) $ (1,202) $ 10,141 $ (241,610) Balance at October 30, 2022 $ (89,793) $ (195,624) $ 29,856 $ — $ (255,561) Unrecognized Gains (Losses) Gross 27,499 1,166 (34,419) 10,141 4,388 Tax Effect — (266) 8,394 — 8,128 Reclassification into Net Earnings Gross — 8,578 (1) (6,574) (2) — 2,004 Tax Effect — (2,110) 1,541 — (570) Change Net of Tax 27,499 7,368 (31,058) 10,141 13,950 Balance at July 30, 2023 $ (62,293) $ (188,256) $ (1,202) $ 10,141 $ (241,610) (1) Included in the computation of net periodic benefit cost. See Note F - Pension and Other Post-Retirement Benefits for additional information. (2) Included in Cost of Products Sold and Interest Expense in the Consolidated Statements of Operations. See Note E - Derivatives and Hedging for additional information. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Jul. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities carried at fair value on a recurring basis | The Company’s financial assets and liabilities carried at fair value on a recurring basis and their level within the fair value hierarchy are presented in the tables below. Fair Value Measurements at July 30, 2023 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) $ 669,124 $ 668,157 $ 966 $ — Short-term Marketable Securities (2) 17,423 2,818 14,606 — Other Trading Securities (3) 197,065 — 197,065 — Commodity Derivatives (4) 11,381 11,558 (176) — Total Assets at Fair Value $ 894,994 $ 682,533 $ 212,461 $ — Liabilities at Fair Value Deferred Compensation (3) $ 60,789 $ — $ 60,789 $ — Total Liabilities at Fair Value $ 60,789 $ — $ 60,789 $ — Fair Value Measurements at October 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) $ 982,107 $ 980,730 $ 1,377 $ — Short-term Marketable Securities (2) 16,149 8,763 7,386 — Other Trading Securities (3) 186,243 — 186,243 — Commodity Derivatives (4) 12,448 12,228 220 — Total Assets at Fair Value $ 1,196,947 $ 1,001,721 $ 195,226 $ — Liabilities at Fair Value Deferred Compensation (3) $ 57,790 $ — $ 57,790 $ — Total Liabilities at Fair Value $ 57,790 $ — $ 57,790 $ — The following methods and assumptions were used to estimate the fair value of the financial assets and liabilities above: (1) The Company’s cash equivalents considered Level 1 consist primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts, and have a maturity date of three months or less. Cash equivalents considered Level 2 are funds holding agency bonds or securities recognized at amortized cost. (2) The Company holds securities as part of a portfolio maintained to generate investment income and to provide cash for operations of the Company, if necessary. The portfolio is managed by a third party who is responsible for daily trading activities, and all assets within the portfolio are highly liquid. The cash, U.S. government securities, and money market funds rated AAA held by the portfolio are classified as Level 1. The current investment portfolio also includes corporate bonds and other asset backed securities for which there is an active, quoted market. Market prices are obtained from a variety of industry providers, large financial institutions, and other third-party sources to calculate a representative daily market value, and therefore, these securities are classified as Level 2. (3) The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred compensation plans. The majority of the funds held in the rabbi trust relate to supplemental executive retirement plans and have been invested primarily in fixed income funds managed by a third party. The declared rate on these funds is set based on a formula using the yield of the general account investment portfolio supporting the fund as adjusted for expenses and other charges. The rate is guaranteed for one year at issue and may be reset annually on the policy anniversary, subject to a guaranteed minimum rate. As the value is based on adjusted market rates and the fixed rate is only reset on an annual basis, these funds are classified as Level 2. Under the Company's deferred compensation plans, participants can defer certain types of compensation and elect to receive a return based on the changes in fair value of various investment options which include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the Internal Revenue Service (IRS) applicable federal rates. These liabilities are classified as Level 2. The Company maintains funding in the rabbi trust generally mirroring the selections within the deferred compensation plans. These funds are managed by a third-party insurance policy, the values of which represent their cash surrender value based on the fair value of the underlying investments in the account. These policies are classified as Level 2. The rabbi trust is included in Other Assets and deferred compensation liabilities in Other Long-term Liabilities on the Consolidated Condensed Statements of Financial Position. Securities held by the rabbi trust are classified as trading securities. Unrealized gains and losses associated with these investments are included in the Company's earnings. During the quarter and nine months ended July 30, 2023, securities held by the rabbi trust generated gains of $5.1 million and $12.1 million, respectively, compared to losses of $0.1 million and $12.1 million for the quarter and nine months ended July 31, 2022, respectively. (4) The Company’s commodity derivatives represent futures, swaps, and options contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn, natural gas, hogs, and pork, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures and options contracts for corn are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available, and these contracts are classified as Level 1. The Company holds natural gas and pork swap contracts that are over-the-counter instruments classified as Level 2. The value of the natural gas swap contracts is calculated using quoted prices from the New York Mercantile Exchange, and the value of the pork swap contracts are calculated using a futures implied USDA estimated pork cut-out value. All derivatives are reviewed for potential credit risk and risk of nonperformance. The net balance for commodity derivatives is included in Other Current Assets or Accounts Payable, as appropriate, in the Consolidated Condensed Statements of Financial Position. As of July 30, 2023, the Company has recognized the right to reclaim net cash collateral of $27.3 million from various counterparties (including cash of $31.1 million less $3.8 million of realized loss). As of October 30, 2022, the Company had recognized the obligation to return net cash collateral of $1.3 million from various counterparties (including cash of $27.5 million less $26.2 million of realized gain). |
LONG-TERM DEBT AND OTHER BORR_2
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS (Tables) | 9 Months Ended |
Jul. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term Debt consists of: in thousands July 30, 2023 October 30, 2022 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 (7,199) (7,750) Unamortized Debt Issuance Costs (17,172) (19,856) Interest Rate Swap Liabilities (1) (10,576) (19,950) Finance Lease Liabilities 38,211 44,473 Other Financing Arrangements 4,098 2,429 Total 3,307,361 3,299,345 Less: Current Maturities of Long-term Debt 946,981 8,796 Long-term Debt Less Current Maturities $ 2,360,380 $ 3,290,549 (1) See Note E - Derivatives and Hedging for additional information. |
EARNINGS PER SHARE DATA (Tables
EARNINGS PER SHARE DATA (Tables) | 9 Months Ended |
Jul. 30, 2023 | |
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 Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Basic Weighted-average Shares Outstanding 546,358 546,077 546,389 544,486 Dilutive Potential Common Shares 2,279 4,090 2,838 4,891 Diluted Weighted-average Shares Outstanding 548,637 550,167 549,227 549,377 Antidilutive Potential Common Shares 7,589 1,787 5,998 2,026 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Jul. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of sales and operating profits for each of the reportable segments and reconciliation to earnings before income taxes | Financial measures for each of the Company’s reportable segments and reconciliation to consolidated Earnings Before Income Taxes are set forth below. The Company's CODM reviews assets at a consolidated level and does not use assets by segment to evaluate performance or allocate resources. Therefore, the Company does not disclose assets by segment. 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 Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Net Sales Retail $ 1,891,746 $ 1,924,553 $ 5,765,786 $ 5,921,145 Foodservice 890,949 917,671 2,607,140 2,681,737 International 180,605 192,190 539,005 572,450 Total Net Sales $ 2,963,299 $ 3,034,414 $ 8,911,930 $ 9,175,331 Segment Profit Retail $ 151,128 $ 163,092 $ 459,031 $ 522,980 Foodservice 146,270 128,798 428,110 399,482 International 12,222 24,464 45,723 78,833 Total Segment Profit 309,619 316,354 932,863 1,001,295 Net Unallocated Expense 101,886 26,429 164,997 80,799 Noncontrolling Interest (108) (89) (200) 112 Earnings Before Income Taxes $ 207,626 $ 289,836 $ 767,666 $ 920,608 |
Schedule of total revenues contributed by sales channel | Total revenue contributed by classes of similar products are: Quarter Ended Nine Months Ended in thousands July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022 Perishable $ 2,068,787 $ 2,123,872 $ 6,222,485 $ 6,445,419 Shelf-stable 894,512 910,542 2,689,445 2,729,911 Total Net Sales $ 2,963,299 $ 3,034,414 $ 8,911,930 $ 9,175,331 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - segment | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 30, 2022 | Jul. 30, 2023 | |
Accounting Policies [Abstract] | |||
Number of reportable segments | 3 | 4 | 3 |
Number of operating segments | 3 | 4 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Changes in Carrying Amounts of Goodwill (Details) $ in Thousands | 9 Months Ended |
Jul. 30, 2023 USD ($) | |
Changes in the carrying amount of goodwill | |
Beginning Balance | $ 4,925,829 |
Foreign Currency Translation | 5,761 |
Ending Balance | 4,931,590 |
Retail | |
Changes in the carrying amount of goodwill | |
Beginning Balance | 2,916,796 |
Foreign Currency Translation | 0 |
Ending Balance | 2,916,796 |
Foodservice | |
Changes in the carrying amount of goodwill | |
Beginning Balance | 1,750,594 |
Foreign Currency Translation | 0 |
Ending Balance | 1,750,594 |
International | |
Changes in the carrying amount of goodwill | |
Beginning Balance | 258,440 |
Foreign Currency Translation | 5,761 |
Ending Balance | $ 264,200 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 30, 2023 | Oct. 30, 2022 |
Carrying amounts for indefinite-lived intangible assets | ||
Total | $ 1,659,994 | $ 1,658,775 |
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 | $ 5,380 | $ 6,599 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Definite Lived Intangibles Assets (Details) - USD ($) $ in Thousands | Jul. 30, 2023 | Oct. 30, 2022 |
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | $ 234,020 | $ 238,016 |
Accumulated Amortization | (103,252) | (93,764) |
Customer Lists/Relationships | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 168,239 | 168,239 |
Accumulated Amortization | (79,450) | (69,779) |
Other Intangibles | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 59,241 | 59,241 |
Accumulated Amortization | (14,794) | (11,606) |
Tradenames/Trademarks | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 6,540 | 10,536 |
Accumulated Amortization | (4,779) | (7,828) |
Foreign Currency Translation | ||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | ||
Gross Carrying Amount | 0 | 0 |
Accumulated Amortization | $ (4,229) | $ (4,551) |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization Expense | $ 4,605 | $ 4,838 | $ 13,806 | $ 14,474 |
GOODWILL AND INTANGIBLE ASSET_6
GOODWILL AND INTANGIBLE ASSETS - Estimated Annual Amortization Expense (Details) $ in Thousands | Oct. 30, 2022 USD ($) |
Amortization Expense | |
2023 | $ 18,320 |
2024 | 16,331 |
2025 | 14,628 |
2026 | 14,172 |
2027 | $ 13,940 |
INVESTMENTS IN AFFILIATES - Nar
INVESTMENTS IN AFFILIATES - Narrative (Details) - USD ($) $ in Millions | Dec. 15, 2022 | Jul. 30, 2023 | Jul. 28, 2023 | Apr. 12, 2023 | Jul. 31, 2022 | Oct. 26, 2009 |
Garudafood | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 29% | 30% | ||||
Purchase price | $ 425.8 | |||||
Basis difference between fair value and carrying value of investment | $ 324.8 | $ 335.3 | ||||
Fair value | $ 348.2 | |||||
MegaMex Foods, LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50% | 50% | ||||
Basis difference between fair value and carrying value of investment | $ 9.5 | $ 21.3 |
INVESTMENTS IN AFFILIATES - Sch
INVESTMENTS IN AFFILIATES - Schedule of Equity in Earnings of Affiliates (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Investments In and Receivables from Affiliates | ||||
Total | $ 9,784 | $ 7,138 | $ 42,213 | $ 19,951 |
MegaMex Foods, LLC | ||||
Investments In and Receivables from Affiliates | ||||
% Owned | 50% | 50% | 50% | 50% |
Total | $ 8,099 | $ 4,555 | $ 34,712 | $ 14,562 |
Other Joint Ventures | ||||
Investments In and Receivables from Affiliates | ||||
Total | $ 1,685 | $ 2,582 | $ 7,501 | $ 5,390 |
Other Joint Ventures | Minimum | ||||
Investments In and Receivables from Affiliates | ||||
% Owned | 20% | 20% | 20% | 20% |
Other Joint Ventures | Maximum | ||||
Investments In and Receivables from Affiliates | ||||
% Owned | 50% | 50% | 50% | 50% |
INVESTMENTS IN AFFILIATES - S_2
INVESTMENTS IN AFFILIATES - Schedule of Distributions Received from Equity Method Investees (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Investment, Affiliated Issuer | ||||
Investments In and Receivables from Affiliates | ||||
Dividends | $ 14,509 | $ 0 | $ 28,160 | $ 30,539 |
INVENTORIES - Schedule of Princ
INVENTORIES - Schedule of Principal Components of Inventories (Details) - USD ($) $ in Thousands | Jul. 30, 2023 | Oct. 30, 2022 |
Inventory, Net [Abstract] | ||
Finished Products | $ 969,749 | $ 974,160 |
Raw Materials and Work-in-Process | 479,371 | 440,193 |
Operating Supplies | 182,586 | 206,289 |
Maintenance Materials and Parts | 106,159 | 95,417 |
Total | $ 1,737,865 | $ 1,716,059 |
DERIVATIVES AND HEDGING - Narra
DERIVATIVES AND HEDGING - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 25, 2021 | Jul. 30, 2023 USD ($) | Jan. 30, 2022 USD ($) | Apr. 25, 2021 USD ($) derivative | |
Commodity Contracts | ||||
Derivative [Line Items] | ||||
Hedging gains (losses) to be recognized within next twelve months | $ (14.3) | |||
Natural Gas | ||||
Derivative [Line Items] | ||||
Maximum length of time to hedge exposure | 2 years | |||
Interest Rate Swap | Derivatives designated as hedges | Fair Value Hedges | ||||
Derivative [Line Items] | ||||
Total notional amount of hedging | $ 450 | |||
Corn | ||||
Derivative [Line Items] | ||||
Maximum length of time to hedge exposure | 2 years | |||
Lean Hogs | ||||
Derivative [Line Items] | ||||
Maximum length of time to hedge exposure | 12 months | |||
Interest Rate Locks | Derivatives designated as hedges | Cash Flow Hedges | ||||
Derivative [Line Items] | ||||
Number of hedging instruments | derivative | 2 | |||
Total notional amount of hedging | $ 1,250 | |||
Interest Rate Locks | Derivatives designated as hedges | Cash Flow Hedges | Minimum | ||||
Derivative [Line Items] | ||||
Tenor of hedging contracts | 7 years | |||
Interest Rate Locks | Derivatives designated as hedges | Cash Flow Hedges | Maximum | ||||
Derivative [Line Items] | ||||
Tenor of hedging contracts | 30 years | |||
Interest Rate Contracts | ||||
Derivative [Line Items] | ||||
Hedging gains (losses) to be recognized within next twelve months | $ 12.7 |
DERIVATIVES AND HEDGING - Outst
DERIVATIVES AND HEDGING - Outstanding Commodity Future Contracts (Details) - Cash Flow Hedges - Derivatives designated as hedges lb in Millions, bu in Millions, MMBTU in Millions | 3 Months Ended | 9 Months Ended | |
Jan. 29, 2023 MMBTU lb bu | May 01, 2022 bu | Jul. 30, 2023 MMBTU lb bu | |
Corn | |||
Derivative [Line Items] | |||
Futures contracts, volume (in million bushels) | bu | 34.3 | 0.6 | 30 |
Lean Hogs | |||
Derivative [Line Items] | |||
Futures contracts, volume (in million pounds) | lb | 177.5 | 151.9 | |
Natural Gas | |||
Derivative [Line Items] | |||
Futures contracts, energy (in MMBTu) | MMBTU | 0 | 2.1 |
DERIVATIVES AND HEDGING - Fair
DERIVATIVES AND HEDGING - Fair Value of Derivatives (Details) - USD ($) $ in Thousands | Jul. 30, 2023 | Oct. 30, 2022 |
Derivatives fair value | ||
Right to reclaim net cash collateral | $ 27,300 | |
Obligation to return net cash collateral | $ 1,300 | |
Derivatives designated as hedges | Cash Flow Hedges | Commodity Contracts | Other Current Assets | ||
Derivatives fair value | ||
Gross Fair Value | $ (6,510) | $ 13,504 |
DERIVATIVES AND HEDGING - Fai_2
DERIVATIVES AND HEDGING - Fair Value Hedge Assets (Liabilities) (Details) - USD ($) $ in Thousands | Jul. 30, 2023 | Oct. 30, 2022 |
Derivatives fair value | ||
Cumulative basis adjustment of carrying amount of hedged portion of 2024 Notes | $ 10,576 | $ 19,950 |
Fair Value Hedges | Commodity Contracts | Accounts Payable | ||
Derivatives fair value | ||
Carrying Amount of Hedged Assets (Liabilities) | 2,664 | 5,725 |
Fair Value Hedges | Interest Rate Contracts | Current Maturities of Long-term Debt | ||
Derivatives fair value | ||
Carrying Amount of Hedged Assets (Liabilities) | (439,424) | 0 |
Fair Value Hedges | Interest Rate Contracts | Long-term Debt Less Current Maturities | ||
Derivatives fair value | ||
Carrying Amount of Hedged Assets (Liabilities) | $ 0 | $ (430,050) |
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 | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Commodity Contracts | ||||
Derivative instruments gains or losses (before tax) | ||||
Gain/(Loss) Reclassified from AOCL into Earnings | $ (5,758) | $ 21,216 | $ 5,833 | $ 38,561 |
Cost of Products Sold | Commodity Contracts | ||||
Derivative instruments gains or losses (before tax) | ||||
Gain/(Loss) Recognized in AOCL | (2,600) | (24,312) | (34,151) | 46,299 |
Gain/(Loss) Reclassified from AOCL into Earnings | (5,758) | 21,216 | 5,833 | 40,231 |
Cost of Products Sold | Corn Options | ||||
Derivative instruments gains or losses (before tax) | ||||
Excluded Component | 423 | (576) | (268) | (4,020) |
Excluded Component | 0 | 0 | 0 | 0 |
Interest Expense | Interest Rate Contracts | ||||
Derivative instruments gains or losses (before tax) | ||||
Gain/(Loss) Recognized in AOCL | 0 | 0 | 0 | 0 |
Gain/(Loss) Reclassified from AOCL into Earnings | $ 247 | $ 247 | $ 741 | $ 741 |
DERIVATIVES AND HEDGING - Conso
DERIVATIVES AND HEDGING - Consolidated Condensed Statements of Operations Impact of Gains or Losses on Derivative Instruments (Details) $ in Thousands, bu in Millions | 3 Months Ended | 9 Months Ended | ||||
Jul. 30, 2023 USD ($) | Jan. 29, 2023 bu | Jul. 31, 2022 USD ($) | May 01, 2022 USD ($) bu | Jul. 30, 2023 USD ($) bu | Jul. 31, 2022 USD ($) | |
Derivative [Line Items] | ||||||
Net Earnings Attributable to Hormel Foods Corporation | $ 162,679 | $ 218,915 | $ 597,637 | $ 720,103 | ||
Fair Value Hedges | ||||||
Total Gain (Loss) Recognized in Earnings | (9,148) | 13,338 | (7,681) | 18,938 | ||
Derivatives designated as hedges | Commodity Contracts | ||||||
Fair Value Hedges | ||||||
Total Gain (Loss) Recognized in Earnings | (6,271) | 13,313 | 952 | 16,927 | ||
Derivatives designated as hedges | Interest Rate Contracts | ||||||
Fair Value Hedges | ||||||
Total Gain (Loss) Recognized in Earnings | (2,878) | 25 | (8,633) | 2,011 | ||
Derivatives designated as hedges | Cash Flow Hedges | Commodity Contracts | ||||||
Cash Flow Hedges | ||||||
Gain (Loss) Reclassified from AOCL | (5,758) | 21,216 | 5,833 | 38,561 | ||
Amortization of Excluded Component from Options | (1,531) | (1,145) | (4,441) | (3,089) | ||
Gain (Loss) Reclassified from AOCL Due to Discontinuance of Cash Flow Hedges | 0 | 0 | 0 | 1,620 | ||
Derivatives designated as hedges | Cash Flow Hedges | Interest Rate Locks | ||||||
Cash Flow Hedges | ||||||
Gain (Loss) Reclassified from AOCL | 247 | 247 | $ 741 | 741 | ||
Derivatives designated as hedges | Cash Flow Hedges | Corn | ||||||
Fair Value Hedges | ||||||
Futures contracts, volume (in million bushels) | bu | 34.3 | 0.6 | 30 | |||
Gain related to the discontinued hedges and an immaterial loss related to the excluded component from options | $ 1,700 | |||||
Derivatives designated as hedges | Fair Value Hedges | Commodity Contracts | ||||||
Fair Value Hedges | ||||||
Gain (loss) on Commodity Futures and Interest Rate Swap | 1,019 | (6,758) | $ (440) | (20,165) | ||
Derivatives designated as hedges | Fair Value Hedges | Interest Rate Swap | ||||||
Fair Value Hedges | ||||||
Gain (loss) on Commodity Futures and Interest Rate Swap | 0 | (222) | 0 | 1,270 | ||
Amortization of Loss Due to Discontinuance of Fair Value Hedge | $ (3,125) | $ 0 | $ (9,374) | $ 0 |
PENSION AND OTHER POST-RETIRE_3
PENSION AND OTHER POST-RETIREMENT BENEFITS - Schedule of Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Net periodic cost of defined benefit plans | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Investment Income | Interest and Investment Income | Interest and Investment Income | Interest and Investment Income |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Excluding Service Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Investment Income | Interest and Investment Income | Interest and Investment Income | Interest and Investment Income |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Investment Income | Interest and Investment Income | Interest and Investment Income | Interest and Investment Income |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest and Investment Income | Interest and Investment Income | Interest and Investment Income | Interest and Investment Income |
Pension Benefits | ||||
Net periodic cost of defined benefit plans | ||||
Service Cost | $ 8,902 | $ 10,019 | $ 26,705 | $ 30,057 |
Interest Cost | 17,157 | 12,639 | 51,472 | 37,919 |
Expected Return on Plan Assets | (19,571) | (27,062) | (58,714) | (81,186) |
Amortization of Prior Service Cost | (461) | (374) | (1,383) | (1,122) |
Recognized Actuarial (Gain) Loss | 3,325 | 3,132 | 9,976 | 9,397 |
Net Periodic Benefit Cost | 9,353 | (1,645) | 28,058 | (4,936) |
Post-retirement Benefits | ||||
Net periodic cost of defined benefit plans | ||||
Service Cost | 62 | 118 | 185 | 351 |
Interest Cost | 3,016 | 1,923 | 9,044 | 5,763 |
Amortization of Prior Service Cost | 2 | 2 | 6 | 6 |
Recognized Actuarial (Gain) Loss | (7) | 610 | (21) | 1,829 |
Net Periodic Benefit Cost | $ 3,073 | $ 2,652 | $ 9,214 | $ 7,950 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS - Schedule of Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jul. 30, 2023 | Jul. 30, 2023 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | $ 7,535,284 | |
Unrecognized Gains (Losses) | ||
Gross | $ (3,575) | 4,388 |
Tax Effect | 542 | 8,128 |
Reclassification into Net Earnings | ||
Gross | 8,371 | 2,004 |
Tax Effect | (2,062) | (570) |
Change Net of Tax | 3,277 | 13,950 |
Ending Balance | 7,713,265 | 7,713,265 |
Accumulated Other Comprehensive Loss | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (244,887) | (255,561) |
Reclassification into Net Earnings | ||
Ending Balance | (241,610) | (241,610) |
Foreign Currency Translation | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (52,124) | (89,793) |
Unrecognized Gains (Losses) | ||
Gross | (10,170) | 27,499 |
Tax Effect | 0 | 0 |
Reclassification into Net Earnings | ||
Gross | 0 | 0 |
Tax Effect | 0 | 0 |
Change Net of Tax | (10,170) | 27,499 |
Ending Balance | (62,293) | (62,293) |
Pension & Other Benefits | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (190,451) | (195,624) |
Unrecognized Gains (Losses) | ||
Gross | 39 | 1,166 |
Tax Effect | 0 | (266) |
Reclassification into Net Earnings | ||
Gross | 2,859 | 8,578 |
Tax Effect | (703) | (2,110) |
Change Net of Tax | 2,195 | 7,368 |
Ending Balance | (188,256) | (188,256) |
Derivatives & Hedging | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (3,720) | 29,856 |
Unrecognized Gains (Losses) | ||
Gross | (2,177) | (34,419) |
Tax Effect | 542 | 8,394 |
Reclassification into Net Earnings | ||
Gross | 5,511 | (6,574) |
Tax Effect | (1,358) | 1,541 |
Change Net of Tax | 2,518 | (31,058) |
Ending Balance | (1,202) | (1,202) |
Equity Method Investments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | 1,408 | 0 |
Unrecognized Gains (Losses) | ||
Gross | 8,733 | 10,141 |
Tax Effect | 0 | 0 |
Reclassification into Net Earnings | ||
Gross | 0 | 0 |
Tax Effect | 0 | 0 |
Change Net of Tax | 8,733 | 10,141 |
Ending Balance | $ 10,141 | $ 10,141 |
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 | 9 Months Ended | |||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | Oct. 30, 2022 | |
Assets at Fair Value | |||||
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets | ||
Right To Reclaim Net Cash Collateral, Commodity Derivatives [Abstract] | |||||
Right to reclaim net cash collateral | $ 27,300 | $ 27,300 | |||
Right to reclaim cash, cash portion | 31,100 | 31,100 | |||
Realized gain (loss) on closed positions | (3,800) | (3,800) | $ 26,200 | ||
Obligation to return net cash collateral, cash portion | 27,500 | ||||
Obligation to return net cash collateral | 1,300 | ||||
Rabbi trust | |||||
Right To Reclaim Net Cash Collateral, Commodity Derivatives [Abstract] | |||||
Gains (losses) related to securities held by the trust | 5,100 | $ (100) | 12,100 | $ (12,100) | |
Recurring basis | |||||
Assets at Fair Value | |||||
Cash and Cash Equivalents | 669,124 | 669,124 | 982,107 | ||
Short-term Marketable Securities | 17,423 | 17,423 | 16,149 | ||
Other Trading Securities | 197,065 | 197,065 | 186,243 | ||
Commodity Derivatives | 11,381 | 11,381 | 12,448 | ||
Total Assets at Fair Value | 894,994 | 894,994 | 1,196,947 | ||
Liabilities at Fair Value | |||||
Deferred Compensation | 60,789 | 60,789 | 57,790 | ||
Total Liabilities at Fair Value | 60,789 | 60,789 | 57,790 | ||
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||
Assets at Fair Value | |||||
Cash and Cash Equivalents | 668,157 | 668,157 | 980,730 | ||
Short-term Marketable Securities | 2,818 | 2,818 | 8,763 | ||
Other Trading Securities | 0 | 0 | 0 | ||
Commodity Derivatives | 11,558 | 11,558 | 12,228 | ||
Total Assets at Fair Value | 682,533 | 682,533 | 1,001,721 | ||
Liabilities at Fair Value | |||||
Deferred Compensation | 0 | 0 | 0 | ||
Total Liabilities at Fair Value | 0 | 0 | 0 | ||
Recurring basis | Significant Other Observable Inputs (Level 2) | |||||
Assets at Fair Value | |||||
Cash and Cash Equivalents | 966 | 966 | 1,377 | ||
Short-term Marketable Securities | 14,606 | 14,606 | 7,386 | ||
Other Trading Securities | 197,065 | 197,065 | 186,243 | ||
Commodity Derivatives | (176) | (176) | 220 | ||
Total Assets at Fair Value | 212,461 | 212,461 | 195,226 | ||
Liabilities at Fair Value | |||||
Deferred Compensation | 60,789 | 60,789 | 57,790 | ||
Total Liabilities at Fair Value | 60,789 | 60,789 | 57,790 | ||
Recurring basis | Significant Unobservable Inputs (Level 3) | |||||
Assets at Fair Value | |||||
Cash and Cash Equivalents | 0 | 0 | 0 | ||
Short-term Marketable Securities | 0 | 0 | 0 | ||
Other Trading Securities | 0 | 0 | 0 | ||
Commodity Derivatives | 0 | 0 | 0 | ||
Total Assets at Fair Value | 0 | 0 | 0 | ||
Liabilities at Fair Value | |||||
Deferred Compensation | 0 | 0 | 0 | ||
Total Liabilities at Fair Value | $ 0 | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Billions | Jul. 30, 2023 | Oct. 30, 2022 |
Fair Value Disclosures [Abstract] | ||
Fair value of long-term debt, utilizing discounted cash flows (Level 2) | $ 2.8 | $ 2.7 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - Isolated Commercial Dispute with Third Party Litigation - Settled Litigation - Unfavorable Regulatory Action $ in Millions | 3 Months Ended | 9 Months Ended |
Jul. 30, 2023 USD ($) | Jul. 30, 2023 USD ($) | |
Selling, General and Administrative Expense | ||
Loss Contingencies [Line Items] | ||
Litigation settlement expense | $ 70 | $ 70 |
Accrued Expenses | ||
Loss Contingencies [Line Items] | ||
Estimated liability | $ 70 | $ 70 |
LONG-TERM DEBT AND OTHER BORR_3
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Jul. 30, 2023 | Oct. 30, 2022 | Jun. 03, 2021 | Jun. 11, 2020 |
Debt Instrument [Line Items] | ||||
Unamortized Debt Issuance Costs | $ (17,172) | $ (19,856) | ||
Interest Rate Swap Liabilities | (10,576) | (19,950) | ||
Finance Lease Liabilities | 38,211 | 44,473 | ||
Other Financing Arrangements | 4,098 | 2,429 | ||
Total | 3,307,361 | 3,299,345 | ||
Less: Current Maturities of Long-term Debt | 946,981 | 8,796 | ||
Long-term Debt Less Current Maturities | 2,360,380 | 3,290,549 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized Discount on Senior Notes | $ (7,199) | (7,750) | ||
Senior Notes | Senior Unsecured Notes, with Interest at 3.050% Interest Due Semi-annually through June 2051 Maturity Date | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.05% | 3.05% | ||
Senior Notes | $ 600,000 | 600,000 | ||
Senior Notes | Senior Unsecured Notes, with Interest at 1.800% Interest Due Semi-annually through June 2030 Maturity Date | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 1.80% | 1.80% | ||
Senior Notes | $ 1,000,000 | 1,000,000 | ||
Senior Notes | Senior Unsecured Notes, with Interest at 1.700% Interest Due Semi-annually through June 2028 Maturity Date | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 1.70% | 1.70% | ||
Senior Notes | $ 750,000 | 750,000 | ||
Senior Notes | Senior Unsecured Notes, with Interest at 0.650% Interest Due Semi-annually through June 2024 Maturity Date | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 0.65% | 0.65% | ||
Senior Notes | $ 950,000 | $ 950,000 |
LONG-TERM DEBT AND OTHER BORR_4
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS - Narrative (Details) | Apr. 17, 2023 extension_option interest_period | Jun. 03, 2021 USD ($) | May 06, 2021 USD ($) | Jun. 11, 2020 USD ($) | Jul. 30, 2023 USD ($) | Apr. 16, 2023 interest_period | Oct. 30, 2022 USD ($) |
Senior Notes | 2024 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of debt issued | $ 950,000,000 | ||||||
Interest rate | 0.65% | 0.65% | |||||
Period to redeem in whole or in part after the issuance date | 1 year | ||||||
Redemption price, percentage | 101% | ||||||
Senior Notes | 2028 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of debt issued | $ 750,000,000 | ||||||
Interest rate | 1.70% | 1.70% | |||||
Redemption price, percentage | 101% | ||||||
Senior Notes | 2051 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of debt issued | $ 600,000,000 | ||||||
Interest rate | 3.05% | 3.05% | |||||
Redemption price, percentage | 101% | ||||||
Senior Notes | Senior Unsecured Notes Due June 2030 | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount of debt issued | $ 1,000,000,000 | ||||||
Interest rate | 1.80% | 1.80% | |||||
Redemption price, percentage | 101% | ||||||
Credit Facility | Unsecured Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity under credit facility | $ 750,000,000 | ||||||
Additional uncommitted option under credit facility | $ 375,000,000 | ||||||
Number of extension options | extension_option | 2 | ||||||
Extension option, period | 1 year | ||||||
Number of permitted interest periods | interest_period | 15 | 8 | |||||
Amount outstanding under credit facility | $ 0 | $ 0 | |||||
Credit Facility | Unsecured Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Variable fee percentage for availability of line of credit | 0.05% | ||||||
Credit Facility | Unsecured Revolving Credit Facility | Minimum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Margin over interest rate percentage | 0% | ||||||
Credit Facility | Unsecured Revolving Credit Facility | Minimum | Eurocurrency rate | |||||||
Debt Instrument [Line Items] | |||||||
Margin over interest rate percentage | 0.575% | ||||||
Credit Facility | Unsecured Revolving Credit Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Variable fee percentage for availability of line of credit | 0.10% | ||||||
Credit Facility | Unsecured Revolving Credit Facility | Maximum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Margin over interest rate percentage | 0.15% | ||||||
Credit Facility | Unsecured Revolving Credit Facility | Maximum | Eurocurrency rate | |||||||
Debt Instrument [Line Items] | |||||||
Margin over interest rate percentage | 1.15% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 21.70% | 24.50% | 22.20% | 21.80% |
Unrecognized tax benefits that would impact effective tax rate | $ 19.6 | $ 19.5 | $ 19.6 | $ 19.5 |
Accrued interest and penalties associated with unrecognized tax benefits | $ 3.2 | $ 4.8 | $ 3.2 | $ 4.8 |
EARNINGS PER SHARE DATA - Share
EARNINGS PER SHARE DATA - Shares Used as Denominator (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Earnings Per Share [Abstract] | ||||
Basic Weighted-average Shares Outstanding (in shares) | 546,358 | 546,077 | 546,389 | 544,486 |
Dilutive Potential Common Shares (in shares) | 2,279 | 4,090 | 2,838 | 4,891 |
Diluted Weighted-average Shares Outstanding (in shares) | 548,637 | 550,167 | 549,227 | 549,377 |
Antidilutive Potential Common Shares (in shares) | 7,589 | 1,787 | 5,998 | 2,026 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) - segment | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 30, 2022 | Jul. 30, 2023 | |
Segment Reporting [Abstract] | |||
Number of reportable segments | 3 | 4 | 3 |
SEGMENT REPORTING - Sales and O
SEGMENT REPORTING - Sales and Operating Profits for Each Reportable and Reconciliation to Earnings Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Operating profit and other financial information | ||||
Net Sales | $ 2,963,299 | $ 3,034,414 | $ 8,911,930 | $ 9,175,331 |
Segment Profit | 216,759 | 291,040 | 802,009 | 945,443 |
Net Unallocated Expense | 101,886 | 26,429 | 164,997 | 80,799 |
Noncontrolling Interest | (108) | (89) | (200) | 112 |
Earnings Before Income Taxes | 207,626 | 289,836 | 767,666 | 920,608 |
Retail | ||||
Operating profit and other financial information | ||||
Net Sales | 1,891,746 | 1,924,553 | 5,765,786 | 5,921,145 |
Foodservice | ||||
Operating profit and other financial information | ||||
Net Sales | 890,949 | 917,671 | 2,607,140 | 2,681,737 |
International | ||||
Operating profit and other financial information | ||||
Net Sales | 180,605 | 192,190 | 539,005 | 572,450 |
Operating Segments | ||||
Operating profit and other financial information | ||||
Segment Profit | 309,619 | 316,354 | 932,863 | 1,001,295 |
Operating Segments | Retail | ||||
Operating profit and other financial information | ||||
Segment Profit | 151,128 | 163,092 | 459,031 | 522,980 |
Operating Segments | Foodservice | ||||
Operating profit and other financial information | ||||
Segment Profit | 146,270 | 128,798 | 428,110 | 399,482 |
Operating Segments | International | ||||
Operating profit and other financial information | ||||
Segment Profit | $ 12,222 | $ 24,464 | $ 45,723 | $ 78,833 |
SEGMENT REPORTING - Revenue Con
SEGMENT REPORTING - Revenue Contributed by Sales Channel (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 30, 2023 | Jul. 31, 2022 | Jul. 30, 2023 | Jul. 31, 2022 | |
Revenue from External Customer [Line Items] | ||||
Total Net Sales | $ 2,963,299 | $ 3,034,414 | $ 8,911,930 | $ 9,175,331 |
Perishable | ||||
Revenue from External Customer [Line Items] | ||||
Total Net Sales | 2,068,787 | 2,123,872 | 6,222,485 | 6,445,419 |
Shelf-stable | ||||
Revenue from External Customer [Line Items] | ||||
Total Net Sales | $ 894,512 | $ 910,542 | $ 2,689,445 | $ 2,729,911 |