HRL - Earnings call transcript Q3 2024 | Hormel Foods Corporation

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Operator

Good morning, ladies and gentlemen, and welcome to the Hormel Foods Corporation Third Quarter Earnings Conference Call. [Operator Instructions]. This call is being recorded on Wednesday, September 4, 2024. I would now like to turn the conference over to Jesse Blomberg, please go ahead.

Unknown Executive

Good morning. Welcome to the Hormel Foods conference call for our third quarter results of fiscal 2024. this the results opened. our released morning market before We Snee, found release website, Retail our A Executive Board, Vice Jim Officer; Jacinth the the Chief Deanna Executive be and call of on Chief President is President section. On copy of of Smiley, Investors Brady, can Executive our segment. Officer; President the the hormelfoods.com, today Financial and Chairman and under Vice results Jim of and our will quarter give rest third on fiscal perspective XXXX. a the review financial detailed provide Jacinth further outlook. and will on our results commentary join Jim the will and Deanna Q&A Jacinth portion call. for of the The remarks. line will remain open for questions following Jacinth's

As limit with question to a X courtesy others, yourself to please follow-up. X

posted If X welcome of to to website you and the year. are a conclusion questions, this At have you rejoin morning's the be webcast our archived additional investor for queue. call, will replay

I'd Before statements. safe get this we started to reference our harbor like morning,

a isolation accordance about as presentation information in now is the this Further or accessed investor press Snee. Jim information performance. make doing this the for comparability not be Form in Management information most results from report differ materially from of comments Form at of of discuss call which release, quarterly be and the over results items recent forward-looking and be we non-GAAP Some can understanding The financial underlying to in considered reports XX-Q and XX-K company's turn GAAP. by our provides actual so will we better to a to will our may in Please will operating implied refer statements the reconciliations our expressed today the those with annual our intended be or or presented under with non-GAAP making. substitute our on website. I we corporate financial the detailed measures can hormelfoods.com be which that Investors including are on believes investors section. Also, certain accessed morning. financial will

James Snee

everyone. of morning, results quarter and We delivered solid Good another you, quarter earnings. better-than-expected Thank Jess. third

line remains Our international our healthy, our core foodservice business, business led business top recovery transform progress and our retail further and continued on takeaway growth in growth initiative. modernize by in

our Specifically, their retail resonate during customers to and our with outperforming the categories consumers. continuing quarter, and of many grew key brands

above-industry business delivered solutions-based the and growth, another highlighting Foodservice base. Our customer quarter portfolio, of of and sales selling our value operator diverse team direct

continue transform path a from to significant benefits experience We in on our to in long-term International achievable by segment led and initiative. continue we the our realistic our against and and to improve commitments business, on strategic remain growing our recovery global brands, We our deliver priorities. quarter, modernize realize and execute our

into I'll deeper performance start for our Foodservice bit our a with segment. the Going quarter,

delivered volume grew another consecutive and pockets differentiated of marking sales We value our proposition. quarter despite industry of above our net of of growth. team foodservice fifth industry Our year-over-year proving quarter growth softness, volume effectiveness the

As XX generally of line strong having quarters. expected, historically year. Foodservice remains out Foodservice last segment was X grown segment profit healthy the in with and last profit

in operate direct balanced and segment many headwinds. the our for Our selling macro our we channels to continue including team portfolio, approach, protect diverse Foodservice

to Fire Turkey. each see cooked proteins net gains. and continue Products proteins sales such inspired including Old Bacon We globally premium pepperoni, and double-digit Cafe solutions-based bacon prepared our X premium bacon Turkey, for H and bacon, items, meats, and strong delivered as demand Jennie-O premium Braised Smokehouse

Ribbon sous such during XXX growth innovative Hormel as contributed quarter. Hormel breast Flash vide-style Additionally, and offerings the chicken Pepperoni

of times slowdown. industry selling remains key in organization Our direct

selling once long-lasting service best named relationships. to enables We our again connect companies each solutions that can directly of pressures. we create that in the to segments. of Our Power's our take in challenges, believe their diverse with strategically support teams sales their resilience And for food direct system face and for, to sell team channel recognizing industry the find costs of presence were XX operators out meaningful

deliver growth our line to continued businesses. have steady in We top both commercial noncommercial and

Taken positioned innovation drive together, to and segment. continues engagement. Transitioning International operator be our to our to value exceptionally foodservice well business

quarter performance improvement continued the impressive Our experienced standpoint, generated year. we segment growth environment last a business shows year. in the to compared XX% profit of the versus From profitability challenging prior

greatly quarter top SPAM primarily also results had Our growth. were Granted a driven lunch Skippy line quarter, a with we Peanut the market. quarter and distribution South Korean the exports consecutive performed in environment. the quarter meat in expanded third of a by double-digit improved in well delivering Butter strong as export second

to foodservice value-added other historically have than turkey elements delivered In addition, were in market U.S. inventory sales portfolio continued exports refrigerated significantly branded the items in global this and domestic which stronger segment's year. the is but result International top profitability of lower benefited down of perform well This a year-over-year. improved management of our channels. Commodity exports, the line

the the for results start quarter. the important and direct a result within to of in off strategy in-country in space. positive retail improvement quarter our Our saw a China We center. innovation quarter, our launches rebound with part customers business is retail continued fourth is China's of the from An our innovation to strong largest

our term. Shifting Philippines and Overall, expand right our international bit on Finally, growth sustainable to on quarter delivering the a presence and retail, commitment our that are strong business. restore where in the in business third realizing confident results Indonesia, we investments remain are line. structure long from global the and we our top international in place to our our nuanced we results in have now strategically growth over the to strategy drive

So I'll explaining some them. time spend

We meats, natural grew Lean in hash, Kitchen Applegate and organic the Peanut bacon, lunch Label Barbecue, in pleased Jenny third quarter. to O' Hormel importantly, market turkey, dollar meats According the PormelChili, underlying of Skippy Holy were strength Butter, ground and Lloyd's SPAM the end brands performance quarter. business. and Mary most key brands Guacamole sales and such in there core as with [indiscernible], the is First Black

many categories. in are our of we Additionally, outperforming

as categories key turkey meats, demonstrates such working. key peanut in bacon, our can that in butter investments and performance brands are Our

our seeing meals business, the trend in We has optimistic we line proteins over convenient are also quarter. last stabilized about and are the which

the continue family Korean which products. with flavor the the is trend support innovation variety SPAM a store permanent new barbecue on We reaching in during including consumers. the excitement the quarter, product SPAM is is third because to This Center of of SPAM XXth lot garnering profile and

in vertical in bacon again Second, last the quarter. household the emerging penetration bacon category over Label bacon our business important momentum [ Black strong brand to XX ], both the brands delivered volume is The Sircana results, leading verticals. continues months. Bacon during and and According the growth

to as QX trends support Toast and introduced these Cinnamon expect bacon, Black Bacon. Label to as innovations We marketplace, such investments through our advertising continue the and oven-ready new into Crunch we bacon brands exciting

meats quarter, Within in sausage, deli the vertical, grew emerging hot bacon, breaded brands Applegate the dogs, including all major breakfast chicken. items categories and across

organic also launched the We pepperoni. and first only Applegate pepperoni, nationally organic available

the We for underlying are key and excited our retail category results see from emerging brands, business. our show and performance core overall and category. Growth development health our our this the launches of to strength innovative

in earnings during discussed segment call, nuanced. top Retail as quarter second our However, results line we remains our overall

is impacted offset negatively items be continue being whole The Jennie more bird in We by Turkey markets. by growth than branded to commodity Dynamics.

for first our expectations quarter earnings as call. year Our the on have unfolded discussed largely

at Planters impactful earnings action quarter in which Virginia, the up mentioned the our we facility. call, our second and production on Production experienced within we as facility a third have Suffolk, is to running corrective as Next, quarter. we back disruption was taken

rates, better on the have disruption while we her Jacinth provide return within co-packer nuts ramp full and up, secured position By broader largely support the the the business and year, much end to want will As commentary. I brand. a Suffolk of finish done disruption, production production we protect they our help thank service Planters this during to fiscal team have the resolved, continues for in to business work be upgrades we color financial control snack service our to to improve more the help will the will to the believe to levels. fill plant. be partnerships we the portfolio impacts

Lastly, we our softness to contract high-volume, see manufacturing business. continue in low-margin

for headwinds business lower expect in continued demand items. top line We this some to due

We retail The retail to meaningful to focused growth So drive up and discussion. category is wrap on our customers create remain with underlying consumers. working healthy. business core end value our our for

initiatives. enterprise-wide now strategic our to Moving

seeing a growing transform benefit are from and We modernize initiative. our

our of continue plan, pillars, and the optimization work the progressed in All buy, portfolio and make, third to mature. move, streams quarter

and make. highlighting quarter, we This pillars, X plan are

quarter work significant technology. during end-to-end was of new our plan, the on the planning done and process For implementation

will upgrade come, which have for improved focus are on have we helped our management. in to generating insights, years quickly this benefits inventory While new many

our pillar, encouraging have results. make the generated operational For improvements

improvement advancements savings our cost as realize facilities continue ongoing as unlock all across our additional network. on On focus and quarter and call, XXXX across supply capacity production for These We our resulting are continuous wins outlook. in our comprehensive impactful you beyond. Shifting recaps well chain. our to our vast to to initiatives, earnings look our we fiscal providing transform our with modernize plans forward on XXXX update XXXX and from a and fourth including now across

from account the segment. to contract conditions Suffolk manufacturing in market updating Retail at softness facility sales impacts and business continued net are our production commodity within for disruption the We guidance our our

Suffolk impact by fourth quarter. production Retail our facility. In led from turkey range approach segment, key an expect We momentum emerging brands. earnings our the also our value-added includes narrowing continued guidance are across bacon, as categories, at and we incremental brands update our and the we disruption This

committed the and through of We to the also year. investments supporting trade strategic brands for are remainder our advertising

and turkey, of and of by continued successful and expect levels. In Planters innovations proteins. we execution fourth expecting toppings, bacon, to sales are service prepared line led volume pizza net growth, We Foodservice, our our premium quarter broad-based our improvements

another And earnings its our our expect is net transform these fourth the to sales we which We profit into expected deliver quarter. $X.XX $X.XX segment modernize to from full range in International diluted billion level in of of factors quarter net $X.XX to $XX.X $X.XX. in range significant of continued savings and segment. share net earnings growth importantly, $XX.X per to all billion earnings initiative, adjusted for year, strongest of to the in benefits and and Taking per expect net share of account the the expect diluted we

deliver her friend. year. In on Vice to ability for recognize decision X of we continue leadership earnings advocate plan the execute and and and well-deserved to success our We wish will Deanna I'd the almost passion has and the leader, has service culture our to to Her ambition, Hormel retire during impacted missed. commitments be track achievable accountability Foods. a President announced decades take of critical created the for best mentor, leadership moment go-forward area on almost to of to for to our our our like month, Brady, closing, of after greatly and was every she her our Deanna Retail, Last to and COVID are Deanna's in business clear Executive years. demonstrate company. last retirement. reorganization I Deanna's will

Enabled Jacinth the third the and in financial this succession our space, strong for process, call business time, strong also our goods quarter turn well-developed the expertise to focus, to lead We understanding return our we the John back segment on to to to continued color a to the welcome He are announced leader packaged Gingo and outlook. John's I group. will with growth coupled building company. perfectly John additional related organization is Hormel deep consumer ideal his by to person the information John for innovation over drive brands. the success. At teams our Retail discuss is of to him detailed and intentional within and retail positions dynamic Foods. known of fortunate Smiley and the

Jacinth Smiley

everyone. you, Good Jim. Thank morning,

by retail of line by turkeys, foodservice initiative year margin X/X at the were period planters. Gross Jim the on another top and international opening sales X XX.X%. contract Planters billion. comments, bird in sales To lower results, and headwinds lower the and the whole was retail modernize manufacturing earnings. GBP segments. were growth net As more was related quarter from third for net than comparable sales commodity solid of The and noted to offset and benefits turkey to of provide offset prior transform quarter our our lower the ruling pricing segment's declines our in and prior results due of $X.X planned arbitration unfavorable decreased increased decline quarter to approximately color in and primarily lapping SG&A nut. more sales $XX of year. the we of employee-related snap SG&A Top expenses. our in Volume line Adjusted X% better-than-expected the million was higher driven delivered third his in billion,

during We adjusted continue quarter quarter the an as line rates to new our investment dues full tax fourth year compared increased favorable the for the interest taxes from from support to the MegaMex associated recent advertising were from XX.X% rate decreased quarter was last campaign lower with impacted suspension for The basis, not higher Planters support [ quarter, an quarter. venture, expenses quarter increase to the X% our and $XXX interest of $XXX and income due an earnings leading higher was marketplace the and market joint the of third debt taxes to year. including were income expect our brands before avocado year. earnings inspections effective the prior temporary million, On third in in ]. Equitine offset for by USDA for million. with resulting from before offset investments. Interest international partially our issuance. Earnings third income costs partially to results expense income increase MegaMex by third from improvement advertising the

expect We fiscal for continue effective and XX% tax to XXXX our be rate XX%. to between

Our third net per of in earnings performance share diluted $X.XX. quarter resulted

$X.XX. Third quarter share per adjusted earnings diluted was

dividend third quarterly flow $XX projects August million, the share. paid an quarter. an an consecutive operating at investment-grade was maintaining rate from to XXXth during increase XXth This of XX%. capital business dividend Year-to-date during dividend growth, our our and delivered strong We have XX remain cash shareholders. cash dividends year year. uninterrupted invested to the and flow We in our of We of in rating. We credit $XXX annual per investing the operations returned million $X.XX effective marks committed

XXXX for Our remains in million. expenditures capital outlook $XXX at

debt sales came our stated range remain to this our expectations. second quarter we range. Shifting combination repayment, ratio our pay in quarter, updating from long-term full cash within we We're With issued the During that and used due. of a notes narrowing hand on net to a the $XXX proceeds off and outlook. comfortably debt leverage million year earnings

market top revised one, as level contract the for the the did to; the suffered rise business. two, line expected; due projection as impact three, quarter to of range third continued disruption our expectations Our the to manufacturing including commodity current encompasses declines softness cost and business, pork not updated in

We quarter expect fourth cost to decrease input seasonally. pork

we averages. In last attract service continue We and turkey, position healthy assume higher year business new pork costs than are year strong input above to supply full and our opportunities. to our the to remains be X-year and customers in a

foodservice. are turkey, pricing growth Turkey pressure We earnings. to to turkeys across Jennie-O several our expected and continue projecting parts whole branded turkey for retail in of business volumes and including and ground commodity value-added Lower are lean

impacts, share Jim production per in an and impact estimated expenses. costs slower originally This and during a facility quarter. reduced our was earnings. the are earnings noted, quarter realized the expenses accounts commercial As for fourth update impacted third maintenance incremental We co-packer a earnings than disruption marketing drag restart $X.XX $X.XX estimating production suffer now quarter third per additional share and the

in facility fourth Papillion quarter. Additionally, experienced damage Nebraska our strong the early to we

impact We full and resulting our higher the are assumes prior year associated planned our with year-over-year with investments. this employee-related financial assessing event. Consistent salaries business, advertising from in higher costs investments the expenses outlook including normalized guidance,

earnings in the our share transform of quarter. and strongest the fourth Finally, year per from initiative the assumes modernize contribution our guidance

proud challenge. narrowing the in U.S. and my release the XXX Report, history, groundbreaking the I'm continue for I lowest education of savings, year the our achieved contributing through the team free tuition in pathways. optimized dependents ] highlights Impact progress resulted college maintaining more package than team's operate efficiencies. Three, X-year invest XXXX which to improved we includes are initiatives designs to cross-sector our to more are by of. mention in [ utilizing than ever. inspire program, and EPS communities like wins our members coalition meaningful update remarks, shifting from report rate to There would in to highlight sustainability recordable a XX communities. a X.X we the Four, and goals, against packaging company's the other we are $XX.X challenge. responsibility range. To we midpoint food our Two, security The in This Marconi, products our the in alleviate Minnesota. One, comprehensive our our guidance working together, Global material cash investment a company's of resulting and our million Taken corporate food [Audio meaningful like insecurity goals many and hometown conclude Gap] XX to uplift I in our project key completing XXXX our opportunity achieving million incident particularly nearly safest X that would in of

I operator question-and-answer turn to the the the Now will call section. over for

Operator

[Operator Instructions].

comes Theurer with question Ben first from Barclays. Your

Benjamin Theurer

maybe terms So end? in the I low And by about the I seeing end you start what million. could of off down $XXX million, just little mean us you're clarity if the guidance. with there's a of like wanted a but still versus sales more you bit to update about $XXX give took range to in high the

but here it essentially And So what as can no down, potential then the are this profit as was EPS the line top break why on down the lower top changed. narrowed impact you to not line just outcomes line? if relates has

James Snee

pricing, We're taken. seeing Yes. start in things. having is proteins, important is international group, we that -- planters. that the by impact some it's convenient third benefit third is lot in the quarter. decline some being have really X still from for there. X We by about to our have Turkey there's the still then our talked Ben, thing line lapping minimal comparison We still Look high-volume, of the quarters the contract top line, we've driven performance with Obviously, manufacturing is of primary third second us the last but pricing quarter driven commodity for the and the some year on the low-margin we're the the question. third factor really a where quarter in in the and the And business in the thanks the quarter impact. meals top

quarter. that as So some the third From perspective, high as that's that as but different. there there's in the for look but couple are into things they're a high, a And the market things decline quarter, also not similar, expected. of we fourth they're we are forward

us. that So impact to will continue

of We'll our about continue impact in lapping disruption. rates and third Justin as and ramp impact an continued headwind an to have in continue the then, and get again, the the quarter. in plant or QX fill I both Suffolk improved product That the impact up, HFIC. talked back contract to has manufacturing our we of we

the Skippy, business, I our we're we'll underlying our performed well. off to really opportunity terms key seeing So to and when international the of line to those another QX were expect transform the business, got same brands, about in rebound initiative, we mean, Jennie-O, range. -- Applegate, the get build core what about all a negative improve put bottom lot retail really modernize We line, on in really, QX our in together, mean what business. -- year. the declines you of there's more talked we're pieces to business. have that's about way last us we've of detail an volume, strength could terms of call. to on be retail margin improvement I in which high the margins, keep is the some speak and and continues to things one or able to bottom SPAM, we take we all and bacon, why and how And low of in talking cases, continue think we're

a that's line you So gets all being package bottom when guide line and all us being but able top range. maintain the that long those to answer, to things, it's what while midpoint narrow still able to the those of things,

Benjamin Theurer

customers the dynamics. seeing it the but are the what growth one as mean you just follow-up in Okay. you at year. volume we're I still from your volume. the in beginning quarter, I have food But then food seeing Perfect. service fourth elevated as relates service And look not into like the on as as to momentum of quick

James Snee

That our track been we still record from growth which our been Foodservice line different mean has foodservice is year. across the not which compete. only Foodservice has on volume we product a categories, I Yes. sales expect really encouraging in growth segments business. but for top solid broad-based, within and

well So foodservice strong us. value to and positioned remains drive for

Operator

next comes Your JPMorgan. Goldman with from question Ken

Kenneth Goldman

potential First storm financial a storm. line range question, to the your I the was bottom damage. impact from maybe get I sense of And unclear. was Does possibilities your of guidance any from what to wanted the include

Jacinth Smiley

the Ken, production running. in so did our from up and is unfortunate the and earlier yes, we back quarter, have damage this fully storm

In at calling all is are no think capacity line. impact impact our facility we're about addition, we at sales. doesn't well then really sales that about has a also we costs from out And as The impact [indiscernible] perspective on that all our in our top it talking redundant for planned. repair so when to

Kenneth Goldman

second do line Okay. revenue mainly question, think efficiencies that And a then co-man direct be, really my Is directly. to the to that help I'll you one. product for commodity desire to we is for a this selling road could maybe little broader And or down the why I more or base? but your your follow need reduce how is, spread or over bottom margin? intended a allow negative from are question sell I it that bigger X overhead the maybe product potential fixed up and than about supply there doesn't to chain you guess incremental perspective, on

James Snee

things there's couple a of there. Ken, Yes.

animals, harvesting it is part sell the side, do first we And turkey the have, and when the [indiscernible]. So we everything. pork on of you're side

we've is very it value-added move at successful And to and to continue that goal, up so our been ladder.

we ourselves that depending progress about that. in situation. But on to we've made of market still decades. over conditions what may be really the always feel elements good we there's so And find the driven are commodity and are, the that going more

to we an and part, part important nonstrategic guess to say doing that that negative it's we're we're the is that position that the don't because going want total what change. I so work exactly is is of isn't at transform modernize optimization it the ourselves margin. items and in in find portfolio selling And where second and you part

this And year 'XX. see start our able We'll provide and of effects team been the work clarity we'll so and call. flows. the at last But to be that more is, the this a on over the has areas. minds, 'XX that of in hard into again, at towards end too, There's different part to of QX distinct naturally our it business that just year

piece The can will is second a action take part we that and on.

Operator

Your next question from with Peter comes Galbo of America. Bank

Peter Galbo

was maybe with Turkey. just previously I believe for about start earnings a had it fiscal headwind into 'XX. you the I to $X.XX said wanted

get So that's question, the just, kind they don't better, of fundamentals worse, Let's flat then second just number. Jim, And don't I that, to of the say line. they they that still get just confirm from if just Turkey don't here, wanted part improve right?

maybe much $X.XX supply Just of how -- point? if is situation supply-demand the other simply any better there can inputs sense but recover at same, the year you get that or chain stays some this of next

James Snee

played that the there's we no really, Yes, thought is the number. of thanks QX that $X.XX for it goes has everything out call your we to To back what first part the and on guided the question, way the and Peter, change question. still

more moving marketplace of are there a terms not many question, is to lot avoid and now. right The in parts it's happening so your really question, what's of in nuance, obviously, the the second but part

'XX, start look we still there's As many, to many unknowns. into

There's [indiscernible]. to say seen I egg uncertainty all the we've think sets it's way fair always that down. are

[ given now was years is as organization. JOC's the doing And moving Our demand-driven focus, that. X Obviously, worked retail too a bit as said, more become our goal some go we have still business. probably continuing the to impacted that been burg integration to it's a of we've success in really, early parts. We're lot But dynamics 'XX through of in as a both ] whole had we and journey, that foodservice. on the ago 'XX, we've all negatively there's

Peter Galbo

Okay. thesis been think an marketing this dramatically. evaluated quarters. And initially then think that this the about invested kind we in and the standpoint underinvestment as had guess the just facility was the more were of of there's starved you back Planters issues side. levels pretty a the I that to is I that when announced, as team for -- lot kind results And in deal business if was could management Jim, an if we that in the marketing I and truly of improvement next of with was at of go capital, improve plant, or kind But and on the the what just on recall you've impact contained this operations from now the is the there the few if at a point

James Snee

business at as the just demonstrating I mean, when out. way prior like could for thought. And I going did we for the address allowed safety we took to mean production the a still able acquisition, were safety be business. holds. over it in what I to the to acquire value that find good enhanced And it. environmental we back of And do time lot position, to able it which food the we with -- of obviously, It that business. of due think were on but the the felt are we on diligence to the the to this all thesis facilities, the we're synergistic not product just And retail different business, the us hitting driving portfolio. significant Yes. consumers our and and is issue disruption, playing about was think across a out our really entire the having testing distribution gains food only but business were we innovation business, you side, gains, was early implement we C-store protocols, for connecting When owned playing that since younger cylinders. effect and we Planters we've

taken system we our really has The which right, for and We up, could doing we was we're little financial needed we too able enterprise back we down the track But find, thought. whole worked. to weeks. wrong. a to while about and back distant we'll was right we future. on we're ramp-up longer talk The what get impact original it, deliver to drive and was was ramping plant is that expect fact our thesis, the be as what us thing. addressed obviously, to than correct, on what So found The X to demand

Operator

with Oppenheimer. question from Next Parikh Rupesh comes

Rupesh Parikh

starting Just expectations quarter? out the volumes, play out your with how did for versus volumes

James Snee

us quarter for Rupesh piece. That a talked in contract about We was volume expected. was did line lower the we that Turkey part manufacturing the in but lower significantly with than the was what was than another things largely we Planters year-over-year, decline expect. biggest expected. The third we was

Rupesh Parikh

those we next and year? net manufacturing. go neutral a maybe then Planters as I'm year, But If comment look as or does And to of as sure puts be I out be can positive contract turkey and whole-bird sense look not we much on you could takes we how you to we want Obviously, any could fiscal into next year. can tailwind get just even initial to Great. this. share? next a also

James Snee

think rebound to comments both continued able early say and I the our I'm there it's expect on as look be and service, Yes. that modernize time specific I that transform that to for we it be Obviously, we're to to about the retail, into us hit do mean, just some I XXXX. and again talking cylinders, made. in build food all But initiative. going frame starting are to to about think planters areas

able key retail in some be to expect to brands. maintain of the momentum We our

we its hitting is international to that really and grow. to expect Our stride, continue business

in to grow. to sure have you the The of make capacity other all this available part is

of has lot on And as so doing, been as we about on really excited even and of that we're have that this capacity And though we're part question, identified sure work point. that's have spent make a the navigating well but our about dynamic and a lot is Yes, I time lot strategic parts that Peter's of there's to we support early so Turkey it's commented just at to some we're puts some many necessary like the areas. why and there's so in, of a we've to moving these headwinds. growth the But then the position takes, that

Operator

with from Sandler. next comes question Piper Lavery Your Michael

Michael Lavery

Just on Planters. one back more

that additional $X.XX cited, stretch XQ and to impact, means? losses I mentioned I fiscal along sure and that had any expected to other the that impact -- of I some term said, you what think And 'XX. to if understand want have into you that things stretching so, potential the the You with was just commercial make might into does you And recover? is could point exactly distribution with

James Snee

work this it lose that been we don't Yes. Michael, is sight to to we able we've brand although with impact The situation important where commercial ramping customers. be, want the not is is. very category. this a with have of that The need to missing Obviously, part had constant is planters we're we sales certainly navigating not in the At we're very, that our production, on. that point, through supplementing communication We're distribution out inventory. co-manufacturing. in we're and impact any losses And up

We there tell And up always up They again, customers, part that be those can so into might what needs. category. today type But doing there we're But you of of the exactly And faster. and XXXX. make faster. to filling spillover we be that and we back talking an to we're sure running when we're back everything can't us it's running to that is important want want recognition.

Michael Lavery

to Okay. you change And And Is just the CapEx that of -- didn't pretty be? what guide that a holding, on points Is maybe it some correct? XQ. -- in you're what big it. would spend it just that

the not spike it's fix color CapEx? the in any sort up of just storm costs the up damage. for guess I So the in a big What year seems like what -- on late

Jacinth Smiley

the This is so it consistent you Michael, during fairly are with how actually correct. year. sequences

And QX, so big we a spend. do typically see

out we that have comfortable year. achieving the $XXX put we're so for And about million with that

So unusual spend the time nothing really of terms the in this of year.

James Snee

job the rate the projects of and really engineering year. scrubbing does spend a our And team good throughout the

in So feel we like good position. a we're

Operator

question Heather Research. Jones Hether with Jones next from Your comes

Heather Jones

and comments. back My the question co-man whole turkey bird first going to is

of a be it roughly said Is the will net -- I think their fair lower But wondering And sales points. when those X/X just volume of think comparisons price the chunk represent decline. bigger that were they all you decline? given to they are cycled.

James Snee

I a -- volume I it's Yes. perspective, it's from think mean fairly equal.

As of we're of is. side season business the XXXX, working the supply the for through what the the is, what is, sell-through holiday visibility we'll get better terms demand what in

nice that be so clear into tend to say a going to have it those while to bit XXXX, you're read delayed. would And be heading a read-throughs

probably able to So before spring view better it that looks. a how XXXX of give of be cycle we're will really

Heather Jones

the about that And just bird talking comments -- side, co-man more about as what Or is were whole you're well? side? on your the that

James Snee

on bird was That the side. more whole

So again? co-man Heather, and ahead I'm question. missed I on your you that go Could sorry, elaborate

Heather Jones

lower decline said were were of roughly and a decline quarter you and volume -- assuming the they're co-man that bird X/X of bigger sales Well, price net Planners and.... you the in their all whole chunk the points [indiscernible]

James Snee

said contract What we've is it's manufacturing.

And Foods Century we so is a facility that own. that

working And demand new business constantly the to and so we're drive business facility. that bring on into

So It's that facility to contract a not it as we co-manufacturing a refer manufacturing. and that issue. we is own

Heather Jones

question $XXX 'XX. by second Analyst back year And Okay. my improvement be targeting is going Day year in last like to down year-on-year. seems million Yale's to It likely then this and is EBIT

happened changes and with that -- achievability 'XX. cetera, given planners the view there what's is by anything that to defining et So lift a your just wondering, birds, And that? of whole greater as

Jacinth Smiley

Heather.

really color sure achieving piece a by tracking that more Just that on in I is that I'm year, can give of down on definitely it. not I'm terms year we clarity, of What XXXX QX towards tell million $XXX over well and that are you we'll clear we're call. you mentioned the

As we investment year, investor called XXXX about year our as we this a year October for being during talked sure. of call, last

said, our a impact be seeing 'XX our margins to really will meaningful pretty good of and XXXX ramp, irrespective are That we there to being so 'XX. that. And bottom line in here

Operator

comes Samuelson Goldman with next Sachs. Your question Adam from

Adam Samuelson

transformer in fourth those can that have Heather's help the the the a different kind of dimensionalize But modernized a amount I initiatives slightly discussion Maybe you bigger you're on to you going call. up quarter know from of of way. initiatives. realized following on savings year-to-date give question

strongest being from You talked of year. quarter the about fourth those contributor the the initiatives

are think to to ballpark those what as we be annualized expected rate then run So that on XXXX? about into a year-on-year start basis

James Snee

And we in Yes. provide dive to QX. going deeper a Adam, are

portfolio side, perspective, buy just analytics savings, -- able that logistics opportunity and is maturing. realizing benefits expected financially to on about us processes having about talk have planning 'XX the we be the also doing levels. And we've optimization. we're so for achieve business. about service in supplies our across the in to the would really are our procurement to business a But developing better making the 'XX. remarks and and from our general, how mean, And in what enhance our refrigerated we I talked the equally from important been to going the today prepared talk about we're is just move We'll I network work that is to opportunity and What are thinking say the

today. the a in do But to the we rest not financial part position get we're assured, call. on will into QX that so And

Jacinth Smiley

the as add that business benefits well, where see truly efficiency whether result expansion a the of just bottom terms supply is you the line in I'll you'll a of showing direct from or our and driving from to those savings that's earnings and here margin Adam, of in No, gross that the through in savings Yes. up chain. see the we're margin that's P&L, different some falling places standpoint in

for there. a in color our give for here QX tuned lot stay us more call really So to you

Adam Samuelson

follow-up down up quarter, the just on appreciate guidance X% ask X% fourth I Okay. that. for kind implies of sales can to And just the year-over-year. a if I

any there be level of birds versus of volume between turkey meat Just of framing co-mans. I lot there's thinking and the of about company and quarter as of price the exports rough fourth the on for kind can mix commodity know some fresh with and segment kind split it? whole noise kind the you're by a the

P&L of or So help kind where the the of just different the sales flow through kind are line through clarify going in those to businesses?

James Snee

Yes. Adam. Thanks,

the outlook, lot So expect QX co-mans. will the we be contract dynamics manufacturing, talked the be about as to mid-single business similar. down we're of We retail not digits. about A retail thinking

digits for there planter as good market a number that had be impact to to is we Some of through we originally continue the going thought mid-single work But retail. was the situation.

see very single describing, that think for on low will digits. us retail, lapping that improved is expect to to International We sales digits. the takeaway is digits, you're foodservice up we really healthy single math, low side, be will the mid-single commodity it again, I but which volume foodservice and business but the business range do mix we be here the to get can do But core and is gets international.

Operator

time. call now for There over remarks. further will this closing to I turn Snee questions are the Jim at no

James Snee

We pleased earnings. have to another quarter are better-than-expected of delivered

our to you team remains of several this While the thank a continue week. hope on for delivering want us and navigate on joining and you of commitments. our headwinds, good to identified have we I year all focused finishing the morning, strong rest

Operator

that conference ask you today. and gentlemen, thank and for you for your call We this lines. disconnect Ladies concludes participating your please

Hormel Foods (HRL) 4 Sep 242024 Q3 Earnings call transcript