Hormel Foods Corporation (NYSE:HRL) Q4 2022 Earnings Call Transcript

Jim Snee: Yep.

Operator: And our next question today comes from Adam Samuelson with Goldman Sachs. Please go ahead.

Unidentified Analyst: Good morning, everyone. This is Arthur on for Adam. If you could just talk to us about how Jennie-O performed relative to your expectations. It looks like volume declines weren’t nearly as much as we had anticipated and you had noted in the last quarter’s call. And if you could also give us some color on — to whatever extent you can, margin headwinds from fixed cost under absorption and how pricing, specifically commodity pricing affected that or offset that? Thank you.

Jim Snee: Yes. Good morning, Arthur. I would say that our Jennie-O business was actually in line with our expectations. And what we have said for the back half of last year, when we first started to see the outbreak was that we were going to have a 30% decline in volume in the back half of the year, and that’s almost exactly what we saw. So the volume piece was accurate. Clearly, the drivers or what happened with the breast meat market, obviously, whole birds, so there’s always a lot of moving parts. But I would say that, by and large, it met our expectations. And then I’m sorry, I missed the second part of the question.

Unidentified Analyst: Just to what extent fixed cost under absorption was a headwind on margins? And what offset you had on pricing?

Jim Snee: Yes. Arthur, I think David is going to have some follow-up calls. So maybe we’d be better served to handle that there.

Unidentified Analyst: Okay. Thank you.

Jim Snee: Yes.

Operator: And ladies and gentlemen, this concludes our question-and-answer session. I’d like to turn the conference back over to the management continue for any closing remarks.

Jim Snee: Well, thank you all for joining us this morning. As we close the book on our fiscal 2022, I want to once again thank our team for delivering such strong results for the fourth quarter and full year. I also want to thank the entire team for their hard work, as we embark on our new operating model. We still have work to do, but their efforts to date have been nothing short of outstanding as we create the Hormel Foods of the future. As we go forward into 2023, I want to wish all of you a happy, healthy and safe holiday season.

Operator: Thank you. And ladies and gentlemen, this concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines, and have a wonderful day.