HORMEL FOODS CORP DE

The Company is a global manufacturer and marketer of branded food products. The Company’s three reportable segments, Retail, Foodservice, and International, are described in Note M - Segment Reporting in the Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

The Company reported diluted net earnings per share of $0.34 for the second quarter of fiscal 2024, down 15 percent compared to last year. Adjusted diluted net earnings per share(1) was $0.38. Significant factors impacting the quarter were:

•Net sales for the second quarter decreased 3 percent. The benefit from higher volume and net sales in the Foodservice segment was more than offset by lower volume and net sales in the Retail and International segments.

•Segment profit for the second quarter decreased 2 percent, as improved results in the International and Foodservice segments were more than offset by a decline in the Retail segment.

•Earnings before income taxes for the second quarter decreased 12 percent, as the benefit from lower logistics expenses and higher interest and investment income was more than offset by the impact from lower net sales and higher selling, general, and administrative (SG&A) expenses. Adjusted earnings before income taxes(1), excluding the impact of expenses related to the Company’s transform and modernize initiative and pork antitrust litigation settlements, decreased 4 percent.

•International segment profit increased significantly, resulting from favorable costs in China, growth from our partnerships in the Philippines, South Korea, and Indonesia, as well as growth in Brazil.

•Foodservice segment profit increased primarily due to higher sales and lower logistics expenses.

•Retail segment profit declined due to lower sales and higher SG&A expenses, which included increased advertising investments. These factors more than offset the benefit from lower logistics expenses and supply chain improvement.

•Year-to-date cash flow from operations was $640 million, an increase of 55 percent compared to the prior year.

•The pre-tax impact of expenses related to the Company’s transform and modernize initiative and pork antitrust litigation settlements in the second quarter was $23.6 million.