Hormel’s 2Q Sales Exceed ‘Pre-Pandemic Levels’
In some ways, Austin, Minn.-based Hormel Foods Corp. is better off now than it was before the pandemic. On Thursday, the company reported that its foodservice sales in its second quarter surpassed “2019 pre-pandemic levels.”
The company benefited from a gradual relaxation of Covid-19 restrictions during its second quarter, which ended April 25. Increased capacity limits in bars and restaurants led to increased demand for Hormel’s food products.
On a year-over-year basis, things still looked good for Hormel in the second quarter: Compared to the same quarter in 2020, the company’s net sales grew 7.6 percent to $2.6 billion. That marked a new record high for the company.
But Hormel did see a notable dip in grocery sales, which fell 8.1 percent to $628 million. in the second quarter.
Grocery “volume and sales declined due to difficult comparisons from extremely high levels of demand last year,” the company said in its quarterly earnings report. “For reference, the segment delivered exceptional growth in the second quarter of fiscal 2020 due to consumer stock-up during the onset of the pandemic.”
Hormel also saw an uptick in sales abroad. The company’s international sales grew 17 percent in the quarter. That was due, in part, to “strong results in China,” the company said.
“In China, foodservice sales have fully recovered to pre-pandemic levels,” Hormel officials said. “The increase in segment profit was due to growth in China and the Philippines, and higher fresh pork export margins.”
Meanwhile, the company said that its $3.3 billion acquisition of the Planters snack nut brand is slated to close in June 2021. The deal was originally slated to close in the company’s second quarter.