QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||||||||
$0.01465 | par value |
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Class | Outstanding at February 25, 2024 | ||||||||||||||||
Common Stock | $0.01465 | par value | |||||||||||||||
Common Stock Nonvoting | $0.01 | par value |
PART I - FINANCIAL INFORMATION | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Critical Accounting Estimates | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II - OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Quarter Ended | |||||||||||
In thousands, except per share amounts | January 28, 2024 | January 29, 2023 | |||||||||
Net Sales | $ | $ | |||||||||
Cost of Products Sold | |||||||||||
Gross Profit | |||||||||||
Selling, General, and Administrative | |||||||||||
Equity in Earnings of Affiliates | |||||||||||
Operating Income | |||||||||||
Interest and Investment Income | |||||||||||
Interest Expense | |||||||||||
Earnings Before Income Taxes | |||||||||||
Provision for Income Taxes | |||||||||||
Net Earnings | |||||||||||
Less: Net Earnings (Loss) Attributable to Noncontrolling Interest | ( | ( | |||||||||
Net Earnings Attributable to Hormel Foods Corporation | $ | $ | |||||||||
Net Earnings Per Share | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Weighted-average Shares Outstanding | |||||||||||
Basic | |||||||||||
Diluted |
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Net Earnings | $ | $ | |||||||||
Other Comprehensive Income (Loss), Net of Tax: | |||||||||||
Foreign Currency Translation | |||||||||||
Pension and Other Benefits | |||||||||||
Derivatives and Hedging | ( | ||||||||||
Equity Method Investments | |||||||||||
Total Other Comprehensive Income (Loss) | |||||||||||
Comprehensive Income | |||||||||||
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interest | |||||||||||
Comprehensive Income Attributable to Hormel Foods Corporation | $ | $ |
In thousands, except share and per share amounts | January 28, 2024 | October 29, 2023 | |||||||||
Assets | |||||||||||
Cash and Cash Equivalents | $ | $ | |||||||||
Short-term Marketable Securities | |||||||||||
Accounts Receivable (Net of Allowance for Doubtful Accounts of $ | |||||||||||
Inventories | |||||||||||
Prepaid Expenses and Other Current Assets | |||||||||||
Total Current Assets | |||||||||||
Goodwill | |||||||||||
Other Intangibles | |||||||||||
Pension Assets | |||||||||||
Investments in Affiliates | |||||||||||
Other Assets | |||||||||||
Property, Plant, and Equipment | |||||||||||
Land | |||||||||||
Buildings | |||||||||||
Equipment | |||||||||||
Construction in Progress | |||||||||||
Less: Allowance for Depreciation | ( | ( | |||||||||
Net Property, Plant, and Equipment | |||||||||||
Total Assets | $ | $ | |||||||||
Liabilities and Shareholders’ Investment | |||||||||||
Accounts Payable and Accrued Expenses | $ | $ | |||||||||
Accrued Marketing Expenses | |||||||||||
Employee-related Expenses | |||||||||||
Interest and Dividends Payable | |||||||||||
Taxes Payable | |||||||||||
Current Maturities of Long-term Debt | |||||||||||
Total Current Liabilities | |||||||||||
Long-term Debt Less Current Maturities | |||||||||||
Pension and Post-retirement Benefits | |||||||||||
Deferred Income Taxes | |||||||||||
Other Long-term Liabilities | |||||||||||
Shareholders’ Investment | |||||||||||
Preferred Stock, Par Value $ Authorized | |||||||||||
Common Stock, Nonvoting, Par Value $ Authorized | |||||||||||
Common Stock, Par Value $ Shares Issued as of January 28, 2024: Shares Issued as of October 29, 2023: | |||||||||||
Additional Paid-in Capital | |||||||||||
Accumulated Other Comprehensive Loss | ( | ( | |||||||||
Retained Earnings | |||||||||||
Hormel Foods Corporation Shareholders’ Investment | |||||||||||
Noncontrolling Interest | |||||||||||
Total Shareholders’ Investment | |||||||||||
Total Liabilities and Shareholders’ Investment | $ | $ |
Quarter Ended January 29, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Hormel Foods Corporation Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interest | Total Shareholders’ Investment | |||||||||||||||||||||||||||||||||||||||||||||||
In thousands, except per share amounts | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at October 30, 2022 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Net Earnings (Loss) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation Expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of Stock Options/Restricted Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Declared Dividends – $ | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 29, 2023 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended January 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Hormel Foods Corporation Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interest | Total Shareholders’ Investment | |||||||||||||||||||||||||||||||||||||||||||||||
In thousands, except per share amounts | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at October 29, 2023 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Net Earnings (Loss) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Contribution from Noncontrolling Interest | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation Expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of Stock Options/Restricted Shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Declared Dividends – $ | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 28, 2024 | $ | $ | $ | $ | $ | ( | $ | $ |
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Operating Activities | |||||||||||
Net Earnings | $ | $ | |||||||||
Adjustments to Reconcile to Net Cash Provided by (Used in) Operating Activities: | |||||||||||
Depreciation and Amortization | |||||||||||
Equity in Earnings of Affiliates | ( | ( | |||||||||
Distributions Received from Equity Method Investees | |||||||||||
Provision for Deferred Income Taxes | ( | ( | |||||||||
Non-cash Investment Activities | ( | ( | |||||||||
Stock-based Compensation Expense | |||||||||||
Operating Lease Cost | |||||||||||
Other Non-cash, Net | |||||||||||
Changes in Operating Assets and Liabilities: | |||||||||||
Decrease (Increase) in Accounts Receivable | |||||||||||
Decrease (Increase) in Inventories | ( | ||||||||||
Decrease (Increase) in Prepaid Expenses and Other Assets | ( | ||||||||||
Increase (Decrease) in Pension and Post-retirement Benefits | |||||||||||
Increase (Decrease) in Accounts Payable and Accrued Expenses | ( | ( | |||||||||
Increase (Decrease) in Net Income Taxes Payable | |||||||||||
Net Cash Provided by (Used in) Operating Activities | |||||||||||
Investing Activities | |||||||||||
Net Sale (Purchase) of Securities | ( | ( | |||||||||
Purchases of Property, Plant, and Equipment | ( | ( | |||||||||
Proceeds from Sales of Property, Plant, and Equipment | |||||||||||
Proceeds from (Purchases of) Affiliates and Other Investments | ( | ||||||||||
Proceeds from Company-owned Life Insurance | |||||||||||
Net Cash Provided by (Used in) Investing Activities | ( | ( | |||||||||
Financing Activities | |||||||||||
Repayments of Long-term Debt and Finance Leases | ( | ( | |||||||||
Dividends Paid on Common Stock | ( | ( | |||||||||
Proceeds from Exercise of Stock Options | |||||||||||
Proceeds from Noncontrolling Interest | |||||||||||
Net Cash Provided by (Used in) Financing Activities | ( | ( | |||||||||
Effect of Exchange Rate Changes on Cash | |||||||||||
Increase (Decrease) in Cash and Cash Equivalents | ( | ||||||||||
Cash and Cash Equivalents at Beginning of Year | |||||||||||
Cash and Cash Equivalents at End of Period | $ | $ |
In thousands | Retail | Foodservice | International | Total | |||||||||||||||||||
Balance at October 29, 2023 | $ | $ | $ | $ | |||||||||||||||||||
Foreign Currency Translation | |||||||||||||||||||||||
Balance at January 28, 2024 | $ | $ | $ | $ |
In thousands | January 28, 2024 | October 29, 2023 | |||||||||
Brands/Trade Names/Trademarks | $ | $ | |||||||||
Other Intangibles | |||||||||||
Foreign Currency Translation | ( | ( | |||||||||
Total | $ | $ |
January 28, 2024 | October 29, 2023 | ||||||||||||||||||||||
In thousands | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||
Customer Lists/Relationships | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Other Intangibles | ( | ( | |||||||||||||||||||||
Trade Names/Trademarks | ( | ( | |||||||||||||||||||||
Foreign Currency Translation | ( | ( | |||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( |
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Amortization Expense | $ | $ |
In thousands | Amortization Expense | ||||
2024 | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 |
Quarter Ended | ||||||||||||||
In thousands | % Owned | January 28, 2024 | January 29, 2023 | |||||||||||
MegaMex Foods, LLC(1) | $ | $ | ||||||||||||
Other Equity Method Investments(2) | Various ( | |||||||||||||
Total Equity in Earnings of Affiliates | $ | $ |
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Dividends | $ | $ |
In thousands | January 28, 2024 | October 29, 2023 | |||||||||
Finished Products | $ | $ | |||||||||
Raw Materials and Work-in-Process | |||||||||||
Operating Supplies | |||||||||||
Maintenance Materials and Parts | |||||||||||
Total Inventories | $ | $ |
In millions | January 28, 2024 | October 29, 2023 | |||||||||
Corn | |||||||||||
Lean Hogs | |||||||||||
Natural Gas | |||||||||||
Diesel Fuel |
In thousands | Location on Consolidated Condensed Statements of Financial Position | January 28, 2024 | October 29, 2023 | |||||||||||
Commodity Contracts(1) | Other Current Assets | $ | ( | $ | ( | |||||||||
In thousands | Location on Consolidated Condensed Statements of Financial Position | January 28, 2024 | October 29, 2023 | |||||||||||
Commodity Contracts | Accounts Payable(1) | $ | ( | $ | ( | |||||||||
Interest Rate Contracts | Current Maturities of Long-term Debt(2) | ( | ( | |||||||||||
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 | January 28, 2024 | January 29, 2023 | January 28, 2024 | January 29, 2023 | ||||||||||||||||||||||
Cash Flow Hedges | ||||||||||||||||||||||||||
Commodity Contracts | $ | ( | $ | ( | $ | ( | $ | Cost of Products Sold | ||||||||||||||||||
Excluded Component(2) | ||||||||||||||||||||||||||
Interest Rate Contracts | Interest Expense | |||||||||||||||||||||||||
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Net Earnings Attributable to Hormel Foods Corporation | $ | $ | |||||||||
Cash Flow Hedges - Commodity Contracts | |||||||||||
Gain (Loss) Reclassified from AOCL | ( | ||||||||||
Amortization of Excluded Component from Options | ( | ( | |||||||||
Fair Value Hedges - Commodity Contracts | |||||||||||
Gain (Loss) on Commodity Futures(1) | ( | ||||||||||
Total Gain (Loss) on Commodity Contracts(2) | ( | ||||||||||
Cash Flow Hedges - Interest Rate Contracts | |||||||||||
Gain (Loss) Reclassified from AOCL | |||||||||||
Fair Value Hedge - Interest Rate Contracts | |||||||||||
Amortization of Loss Due to Discontinuance of Fair Value Hedge(3) | ( | ( | |||||||||
Total Gain (Loss) on Interest Rate Contracts(4) | ( | ( | |||||||||
Total Gain (Loss) Recognized in Earnings | $ | ( | $ |
Pension Benefits | |||||||||||
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Service Cost | $ | $ | |||||||||
( | ( | ||||||||||
( | ( | ||||||||||
Net Periodic Cost | $ | $ |
Post-retirement Benefits | |||||||||||
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Service Cost | $ | $ | |||||||||
Interest Cost | |||||||||||
Amortization of Prior Service Cost | |||||||||||
Recognized Actuarial (Gain) Loss | ( | ( | |||||||||
Net Periodic Cost | $ | $ |
In thousands | Foreign Currency Translation | Pension & Other Benefits | Derivatives & Hedging | Equity Method Investments | Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||||
Balance at October 29, 2023 | $ | ( | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
Unrecognized Gains (Losses) | ||||||||||||||||||||||||||||||||||||||
Gross | ( | |||||||||||||||||||||||||||||||||||||
Tax Effect | ||||||||||||||||||||||||||||||||||||||
Reclassification into Net Earnings | ||||||||||||||||||||||||||||||||||||||
Gross | (1) | (2) | ( | (3) | ||||||||||||||||||||||||||||||||||
Tax Effect | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Change Net of Tax | ||||||||||||||||||||||||||||||||||||||
Balance at January 28, 2024 | $ | ( | $ | ( | $ | ( | $ | $ | ( |
Fair Value Measurements at January 28, 2024 | |||||||||||||||||||||||
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) | $ | $ | $ | $ | |||||||||||||||||||
Short-term Marketable Securities(2) | |||||||||||||||||||||||
Other Trading Securities(3) | |||||||||||||||||||||||
( | |||||||||||||||||||||||
Total Assets at Fair Value | $ | $ | $ | $ | |||||||||||||||||||
Liabilities at Fair Value | |||||||||||||||||||||||
Deferred Compensation(3) | $ | $ | $ | $ | |||||||||||||||||||
Total Liabilities at Fair Value | $ | $ | $ | $ |
Fair Value Measurements at October 29, 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) | $ | $ | $ | $ | |||||||||||||||||||
Short-term Marketable Securities(2) | |||||||||||||||||||||||
Other Trading Securities(3) | |||||||||||||||||||||||
( | |||||||||||||||||||||||
Total Assets at Fair Value | $ | $ | $ | $ | |||||||||||||||||||
Liabilities at Fair Value | |||||||||||||||||||||||
Deferred Compensation(3) | $ | $ | $ | $ | |||||||||||||||||||
Total Liabilities at Fair Value | $ | $ | $ | $ |
In thousands | January 28, 2024 | October 29, 2023 | |||||||||
Senior Unsecured Notes, with Interest at Interest Due Semi-annually through June 2051 Maturity Date | $ | $ | |||||||||
Senior Unsecured Notes, with Interest at Interest Due Semi-annually through June 2030 Maturity Date | |||||||||||
Senior Unsecured Notes, with Interest at Interest Due Semi-annually through June 2028 Maturity Date | |||||||||||
Senior Unsecured Notes, with Interest at Interest Due Semi-annually through June 2024 Maturity Date | |||||||||||
Unamortized Discount on Senior Notes | ( | ( | |||||||||
Unamortized Debt Issuance Costs | ( | ( | |||||||||
Interest Rate Swap Liabilities(1) | ( | ( | |||||||||
Finance Lease Liabilities | |||||||||||
Other Financing Arrangements | |||||||||||
Total | |||||||||||
Less: Current Maturities of Long-term Debt | |||||||||||
Long-term Debt Less Current Maturities | $ | $ |
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Basic Weighted-average Shares Outstanding | |||||||||||
Dilutive Potential Common Shares | |||||||||||
Diluted Weighted-average Shares Outstanding | |||||||||||
Antidilutive Potential Common Shares |
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Net Sales | |||||||||||
Retail | $ | $ | |||||||||
Foodservice | |||||||||||
International | |||||||||||
Total Net Sales | $ | $ | |||||||||
Segment Profit | |||||||||||
Retail | $ | $ | |||||||||
Foodservice | |||||||||||
International | |||||||||||
Total Segment Profit | |||||||||||
Net Unallocated Expense | |||||||||||
Noncontrolling Interest | ( | ( | |||||||||
Earnings Before Income Taxes | $ | $ |
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Perishable | $ | $ | |||||||||
Shelf-stable | |||||||||||
Total Net Sales | $ | $ |
Quarter Ended | |||||||||||||||||
In thousands, except per share amounts | January 28, 2024 | January 29, 2023 | % Change | ||||||||||||||
Volume (lbs.) | 1,101,554 | 1,062,211 | 3.7 | ||||||||||||||
Net Sales | $ | 2,996,911 | $ | 2,970,992 | 0.9 | ||||||||||||
Earnings Before Income Taxes | 285,547 | 281,201 | 1.5 | ||||||||||||||
Net Earnings Attributable to Hormel Foods Corporation | 218,863 | 217,719 | 0.5 | ||||||||||||||
Diluted Earnings Per Share | 0.40 | 0.40 | — | ||||||||||||||
Adjusted Diluted Earnings Per Share (1) | 0.41 | 0.40 | 2.5 |
Quarter Ended | |||||||||||||||||
In thousands | January 28, 2024 | January 29, 2023 | % Change | ||||||||||||||
Cost of Products Sold | $ | 2,488,178 | $ | 2,475,043 | 0.5 |
Quarter Ended | |||||||||||||||||
In thousands | January 28, 2024 | January 29, 2023 | % Change | ||||||||||||||
Gross Profit | $ | 508,733 | $ | 495,949 | 2.6 | ||||||||||||
Percent of Net Sales | 17.0 | % | 16.7 | % |
Quarter Ended | |||||||||||||||||
In thousands | January 28, 2024 | January 29, 2023 | % Change | ||||||||||||||
SG&A | $ | 240,386 | $ | 222,056 | 8.3 | ||||||||||||
Percent of Net Sales | 8.0 | % | 7.5 | % | |||||||||||||
Adjusted SG&A(1) | $ | 231,671 | $ | 222,056 | 4.3 | ||||||||||||
Adjusted Percent of Net Sales(1) | 7.7 | % | 7.5 | % |
Quarter Ended | |||||||||||||||||
In thousands | January 28, 2024 | January 29, 2023 | % Change | ||||||||||||||
Equity in Earnings of Affiliates | $ | 16,091 | $ | 15,559 | 3.4 |
Quarter Ended | |||||||||||||||||
In thousands | January 28, 2024 | January 29, 2023 | % Change | ||||||||||||||
Interest and Investment Income | $ | 19,434 | $ | 10,096 | 92.5 | ||||||||||||
Interest Expense | 18,326 | 18,347 | (0.1) |
Quarter Ended | |||||||||||
January 28, 2024 | January 29, 2023 | ||||||||||
Effective Tax Rate | 23.4 | % | 22.6 | % |
Quarter Ended | |||||||||||||||||
In thousands | January 28, 2024 | January 29, 2023 | % Change | ||||||||||||||
Net Sales | |||||||||||||||||
Retail | $ | 1,911,272 | $ | 1,957,797 | (2.4) | ||||||||||||
Foodservice | 913,087 | 834,750 | 9.4 | ||||||||||||||
International | 172,552 | 178,445 | (3.3) | ||||||||||||||
Total | $ | 2,996,911 | $ | 2,970,992 | 0.9 | ||||||||||||
Segment Profit | |||||||||||||||||
Retail | $ | 149,505 | $ | 154,677 | (3.3) | ||||||||||||
Foodservice | 150,164 | 136,442 | 10.1 | ||||||||||||||
International | 20,031 | 19,905 | 0.6 | ||||||||||||||
Total Segment Profit | 319,700 | 311,025 | 2.8 | ||||||||||||||
Net Unallocated Expense | 34,020 | 29,755 | 14.3 | ||||||||||||||
Noncontrolling Interest | (134) | (69) | (95.4) | ||||||||||||||
Earnings Before Income Taxes | $ | 285,547 | $ | 281,201 | 1.5 | ||||||||||||
Quarter Ended | |||||||||||||||||
In thousands | January 28, 2024 | January 29, 2023 | % Change | ||||||||||||||
Volume (lbs.) | 765,412 | 752,887 | 1.7 | ||||||||||||||
Net Sales | $ | 1,911,272 | $ | 1,957,797 | (2.4) | ||||||||||||
Segment Profit | 149,505 | 154,677 | (3.3) |
Quarter Ended | |||||||||||||||||
In thousands | January 28, 2024 | January 29, 2023 | % Change | ||||||||||||||
Volume (lbs.) | 256,007 | 237,087 | 8.0 | ||||||||||||||
Net Sales | $ | 913,087 | $ | 834,750 | 9.4 | ||||||||||||
Segment Profit | 150,164 | 136,442 | 10.1 |
Quarter Ended | |||||||||||||||||
In thousands | January 28, 2024 | January 29, 2023 | % Change | ||||||||||||||
Volume (lbs.) | 80,135 | 72,237 | 10.9 | ||||||||||||||
Net Sales | $ | 172,552 | $ | 178,445 | (3.3) | ||||||||||||
Segment Profit | 20,031 | 19,905 | 0.6 |
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Net Unallocated Expense | $ | 34,020 | $ | 29,755 | |||||||
Noncontrolling Interest | (134) | (69) |
Quarter Ended | |||||||||||
In thousands, except per share amounts | January 28, 2024 | January 29, 2023 | |||||||||
Cost of Products Sold (GAAP) | $ | 2,488,178 | $ | 2,475,043 | |||||||
Transformation and Modernization Initiative | (1,598) | — | |||||||||
Adjusted Cost of Products Sold (Non-GAAP) | $ | 2,486,580 | $ | 2,475,043 | |||||||
SG&A (GAAP) | $ | 240,386 | $ | 222,056 | |||||||
Transformation and Modernization Initiative | (8,715) | — | |||||||||
Adjusted SG&A (Non-GAAP) | $ | 231,671 | $ | 222,056 | |||||||
Operating Income (GAAP) | $ | 284,438 | $ | 289,452 | |||||||
Transformation and Modernization Initiative | 10,313 | — | |||||||||
Adjusted Operating Income (Non-GAAP) | $ | 294,751 | $ | 289,452 | |||||||
Earnings Before Income Taxes (GAAP) | $ | 285,547 | $ | 281,201 | |||||||
Transformation and Modernization Initiative | 10,313 | — | |||||||||
Adjusted Earnings Before Income Taxes (Non-GAAP) | $ | 295,859 | $ | 281,201 | |||||||
Net Earnings Attributable to Hormel Foods Corporation (GAAP) | $ | 218,863 | $ | 217,719 | |||||||
Transformation and Modernization Initiative | 7,900 | — | |||||||||
Adjusted Net Earnings Attributable to Hormel Foods Corporation (Non-GAAP) | $ | 226,763 | $ | 217,719 | |||||||
Diluted Net Earnings Per Share (GAAP) | $ | 0.40 | $ | 0.40 | |||||||
Transformation and Modernization Initiative | 0.01 | — | |||||||||
Adjusted Diluted Net Earnings Per Share (Non-GAAP) | $ | 0.41 | $ | 0.40 | |||||||
SG&A as a Percent of Net Sales (GAAP) | 8.0 | % | 7.5 | % | |||||||
Transformation and Modernization Initiative | (0.3) | — | |||||||||
Adjusted SG&A as a Percent of Net Sales (Non-GAAP) | 7.7 | % | 7.5 | % | |||||||
Operating Margin (GAAP) | 9.5 | % | 9.7 | % | |||||||
Transformation and Modernization Initiative | 0.3 | — | |||||||||
Adjusted Operating Margin (Non-GAAP) | 9.8 | % | 9.7 | % |
Quarter Ended | |||||||||||
In thousands | January 28, 2024 | January 29, 2023 | |||||||||
Cash and Cash Equivalents | $ | 963,212 | $ | 599,789 | |||||||
Cash Provided by (Used in) Operating Activities | 403,980 | 203,629 | |||||||||
Cash Provided by (Used in) Investing Activities | (48,154) | (451,469) | |||||||||
Cash Provided by (Used in) Financing Activities | (133,365) | (141,570) | |||||||||
Increase (Decrease) in Cash and Cash Equivalents | 226,680 | (382,318) |
101 | The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended January 28, 2024, formatted in Inline XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Condensed Statements of Financial Position, (iv) Consolidated Statements of Changes in Shareholders’ Investment, (v) Consolidated Condensed Statements of Cash Flows, and (vi) Notes to the Consolidated Financial Statements. | ||||
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended January 28, 2024, formatted in Inline XBRL (included as Exhibit 101). |
HORMEL FOODS CORPORATION | ||||||||
(Registrant) | ||||||||
Date: February 29, 2024 | By: | /s/ JACINTH C. SMILEY | ||||||
JACINTH C. SMILEY | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
(Principal Financial Officer) | ||||||||
Date: February 29, 2024 | By: | /s/ PAUL R. KUEHNEMAN | ||||||
PAUL R. KUEHNEMAN | ||||||||
Vice President and Controller | ||||||||
(Principal Accounting Officer) |
By: | /s/ Brian D. Johnson | |||||||
Name: | Brian D. Johnson | |||||||
Title: | Vice President and Corporate Secretary |
Name of Participant: _______________________ | |||||
Target Award: $ ________________ | Grant Date: November 20, 2023 | ||||
Performance Period: one or more of the performance periods set forth in the exhibits to this Agreement describing the performance metrics applicable to this LTIP Award (each performance period, respectively, is an “Applicable Performance Period”). | |||||
Last Day of Performance Period: October 25, 2026 | |||||
Proportion of Award Based on Each Performance Metric: | |||||
Performance Metric | Weighting | ||||
rTSR (Exhibit A) Organic Net Sales Growth (Exhibit B) ROIC (Exhibit C) | 50% 25% 25% |
Campbell Soup Company Clorox Company Coca-Cola Company ConAgra Foods, Inc. Flowers Foods, Inc. Fresh Del Monte Produce Inc. General Mills, Inc. | Hain Celestial Group, Inc. Hershey Company J.M. Smucker Company Kellogg Company Kraft Heinz Company McCormick & Company, Inc. Mondelez International Inc. | PepsiCo Inc. Pilgrim’s Pride Corp. Post Holdings, Inc. Seaboard Corporation Treehouse Foods Inc. Tyson Foods Inc. |
Percentile | % of Target Award | |||||||
Below Threshold | 0-25% | 0% | ||||||
Threshold | Above 25% | 50% | ||||||
Target | 50% | 100% | ||||||
Excellence | 90% | 200% | ||||||
Maximum | 100% | 300% |
Notes: | |||||||||||
1- Percentile is calculated by dividing the peer group rank by the total number of companies. The peer group rank is the number of positions from the bottom of the peer group (i.e., the company with the highest total shareholder return is ranked 25; the company with the lowest total shareholder return is ranked 1) | |||||||||||
2- Linear interpolation is applied for performance that is at or above threshold and between the percentile points listed. | |||||||||||
Percentile | % of Target Award | |||||||
Below Threshold | Below 0.5% | 0% | ||||||
Threshold | 0.5% | 50% | ||||||
Target | 2.5% | 100% | ||||||
Excellence | 4.5% | 200% | ||||||
Maximum | 5.5% | 300% |
Percentile | % of Target Award | |||||||
Below Threshold | Below 8% | 0% | ||||||
Threshold | 8% | 50% | ||||||
Target | 10% | 100% | ||||||
Excellence | 12% | 200% | ||||||
Maximum | 14% | 300% |
Name of Participant: _______________________ | ||||||||
No. of Shares Covered: _______ | Grant Date: __________, 20__ | |||||||
Exercise Price Per Share: $______ | Expiration Date: __________, 20__ | |||||||
Vesting and Exercise Schedule: | ||||||||
Dates First Anniversary of Grant Date Second Anniversary of Grant Date Third Anniversary of Grant Date Fourth Anniversary of Grant Date | Portion of Shares as to Which Option Becomes Vested and Exercisable 25% 25% 25% 25% |
Name of Participant: _______________________ | ||||||||
No. of Restricted Stock Units Granted: _______ | Grant Date: __________, 20__ | |||||||
Vesting Schedule: 100% of the RSUs shall vest on the third anniversary of the Grant Date (the “Scheduled Vesting Date”) | ||||||||
Dated: February 29, 2024 | Signed: | /s/ JAMES P. SNEE | ||||||
JAMES P. SNEE | ||||||||
Chairman of the Board, President and Chief Executive Officer |
Dated: February 29, 2024 | Signed: | /s/ JACINTH C. SMILEY | ||||||
JACINTH C. SMILEY | ||||||||
Executive Vice President and Chief Financial Officer |
Dated: February 29, 2024 | /s/ JAMES P. SNEE | ||||
JAMES P. SNEE | |||||
Chairman of the Board, President and Chief Executive Officer | |||||
Dated: February 29, 2024 | /s/ JACINTH C. SMILEY | ||||
JACINTH C. SMILEY | |||||
Executive Vice President and Chief Financial Officer |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 28, 2024 |
Jan. 29, 2023 |
|
Income Statement [Abstract] | ||
Net Sales | $ 2,996,911 | $ 2,970,992 |
Cost of Products Sold | 2,488,178 | 2,475,043 |
Gross Profit | 508,733 | 495,949 |
Selling, General, and Administrative | 240,386 | 222,056 |
Equity in Earnings of Affiliates | 16,091 | 15,559 |
Operating Income | 284,438 | 289,452 |
Interest and Investment Income | 19,434 | 10,096 |
Interest Expense | 18,326 | 18,347 |
Earnings Before Income Taxes | 285,547 | 281,201 |
Provision for Income Taxes | 66,818 | 63,551 |
Net Earnings | 218,729 | 217,651 |
Less: Net Earnings (Loss) Attributable to Noncontrolling Interest | (134) | (69) |
Net Earnings Attributable to Hormel Foods Corporation | $ 218,863 | $ 217,719 |
Net Earnings Per Share | ||
Basic (in dollars per share) | $ 0.40 | $ 0.40 |
Diluted (in dollars per share) | $ 0.40 | $ 0.40 |
Weighted-average Shares Outstanding | ||
Basic (in shares) | 547,020 | 546,384 |
Diluted (in shares) | 547,920 | 550,031 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 28, 2024 |
Jan. 29, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Net Earnings | $ 218,729 | $ 217,651 |
Other Comprehensive Income (Loss), Net of Tax: | ||
Foreign Currency Translation | 11,459 | 15,046 |
Pension and Other Benefits | 2,129 | 2,990 |
Derivatives and Hedging | 5,206 | (14,514) |
Equity Method Investments | 2,884 | 0 |
Total Other Comprehensive Income (Loss) | 21,678 | 3,522 |
Comprehensive Income | 240,407 | 221,173 |
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interest | 75 | 154 |
Comprehensive Income Attributable to Hormel Foods Corporation | $ 240,332 | $ 221,019 |
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION (PARENTHETICAL) - USD ($) $ in Thousands |
Jan. 28, 2024 |
Oct. 29, 2023 |
---|---|---|
Accounts Receivable, Allowance for Doubtful Accounts | $ 3,651 | $ 3,557 |
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, Nonvoting | ||
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) | 547,595,988 | 546,599,420 |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT (PARENTHETICAL) - $ / shares |
3 Months Ended | |
---|---|---|
Jan. 28, 2024 |
Jan. 29, 2023 |
|
Statement of Stockholders' Equity [Abstract] | ||
Declared Dividends (in dollars per share) | $ 0.2825 | $ 0.2750 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
---|---|
Jan. 28, 2024 | |
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 29, 2023. 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 29, 2023. 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. Amortization related to operating leases and debt issuance costs were reclassified from Amortization to separate line items within the operating activities section of the Consolidated Condensed Statements of Cash Flows. These reclassifications had no impact on the Consolidated Statements of Operations, Consolidated Condensed Statements of Financial Position, or the Increase (Decrease) in Cash and Cash Equivalents in the Consolidated Condensed Statements of Cash Flows. Accounting Changes and Recent Accounting Pronouncements: New Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The update is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (CODM), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The ASU also requires all annual disclosures currently required by Topic 280 to be included in interim periods. The update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and requires retrospective application to all prior periods presented in the financial statements. The Company is currently assessing the timing and impact of adopting the updated provisions. In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update is intended to enhance transparency and decision usefulness of income tax disclosures. This ASU updates income tax disclosure requirements by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. The update is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently assessing the timing and impact of adopting the updated provisions. Recently issued accounting standards or pronouncements not disclosed have been excluded as they are currently not relevant to the Company.
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GOODWILL AND INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | NOTE B - GOODWILL AND INTANGIBLE ASSETS Goodwill: The change in the carrying amount of goodwill for the quarter ended January 28, 2024, is:
Intangible Assets: The carrying amounts for indefinite-lived intangible assets are:
The gross carrying amount and accumulated amortization for definite-lived intangible assets are:
Amortization expense on intangible assets is as follows:
Estimated annual amortization expense on intangible assets for the five fiscal years after October 29, 2023, is as follows:
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INVESTMENTS IN AFFILIATES |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS IN AFFILIATES | NOTE C - INVESTMENTS IN AFFILIATES Equity in Earnings of Affiliates consists of:
(1) MegaMex, Foods, LLC, is reflected in the Retail Segment. (2) Other Equity Method Investments are primarily reflected in the International Segment but also include corporate venturing investments. Distributions received from equity method investees include:
On December 15, 2022, the Company purchased from various minority shareholders a 29% common stock interest in PT Garudafood Putra Putri Jaya Tbk (Garudafood), a food and beverage company in Indonesia. 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 entertaining and snacking strategy. 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 its 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 January 28, 2024, the remaining basis difference was $324.9 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 $279.4 million as of January 26, 2024. The Company recognized a basis difference of $21.3 million associated with the formation of MegaMex Foods, LLC, of which $9.1 million is remaining as of January 28, 2024. This difference is being amortized through Equity in Earnings of Affiliates.
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INVENTORIES |
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Jan. 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | NOTE D - INVENTORIES Principal components of inventories are:
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DERIVATIVES AND HEDGING |
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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 uses futures, swaps, and options contracts to offset price fluctuations in the Company's future purchases of grain, lean hogs, natural gas, and diesel fuel. These contracts are designated as cash flow hedges; therefore, 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, natural gas, or diesel fuel exposure beyond the next upcoming fiscal years and its lean hog exposure beyond the next fiscal year. 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 lean hog and grain suppliers as fair value hedges. The programs are intended 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 on 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 and thirty years and both locks 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:
Fair Value of Derivatives: The gross fair values of the Company’s derivative instruments designated as hedges are:
(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 January 28, 2024, is offset by the right to reclaim net cash collateral of $24.5 million contained within the master netting arrangement. The gross liability position as of October 29, 2023, is offset by the right to reclaim net cash collateral of $32.2 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:
(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 January 28, 2024, the carrying amount of the 2024 Notes included a cumulative fair value hedging adjustment of $4.3 million from discontinued hedges. Accumulated Other Comprehensive Loss Impact: As of January 28, 2024, the Company included in AOCL hedging losses (before tax) of $17.3 million on commodity contracts and gains (before tax) of $12.2 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:
(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 commodity 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:
(1) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the quarter ended January 28, 2024, and January 29, 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. (2) Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold. (3) Represents the fair value hedging adjustment amortized through earnings. (4) Total Gain (Loss) on Interest Rate Contracts is recognized in earnings through Interest Expense.
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PENSION AND OTHER POST-RETIREMENT BENEFITS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION AND OTHER POST-RETIREMENT BENEFITS | NOTE F - PENSION AND OTHER POST-RETIREMENT BENEFITS Net periodic cost for pension and other post-retirement benefit plans consists of:
Non-service cost components of net pension and post-retirement benefit cost are presented within Interest and Investment Income in the Consolidated Statements of Operations.
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ACCUMULATED OTHER COMPREHENSIVE LOSS |
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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:
(1) Included in computation of net periodic 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. (3) Included in Equity in Earnings of Affiliates in the Consolidated Statements of Operations.
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FAIR VALUE MEASUREMENTS |
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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.
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 percent of the U.S. 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 ended January 28, 2024, securities held by the rabbi trust generated gains of $11.5 million, compared to gains of $7.0 million for the quarter ended January 29, 2023. (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, diesel fuel, 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, diesel fuel, and pork swap contracts that are over-the-counter instruments classified as Level 2. The value of the natural gas and diesel fuel 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, on the Consolidated Condensed Statements of Financial Position. As of January 28, 2024, the Company has recognized the right to reclaim net cash collateral of $24.5 million from various counterparties (including cash of $22.3 million plus $2.2 million of realized gain). As of October 29, 2023, the Company had recognized the right to reclaim net cash collateral of $32.2 million from various counterparties (including cash of $42.6 million less $10.4 million of realized loss). 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 the 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 January 28, 2024, and $2.7 billion as of October 29, 2023. See Note J - Long-Term Debt and Other Borrowing Arrangements for additional information. The Company measures certain nonfinancial assets and liabilities at fair value, which are recognized or disclosed on a nonrecurring basis (e.g., goodwill, intangible assets, and property, plant, and equipment). There were no material remeasurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition during the quarter ended January 28, 2024, and January 29, 2023.
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COMMITMENTS AND CONTINGENCIES |
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Jan. 28, 2024 | |
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 ended January 28, 2024, 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 29, 2023. Legal Proceedings: The Company is a party to various legal proceedings related to the ongoing operation of its business, including claims both by and against the Company. At any time, such proceedings typically involve claims related to product liability, labeling, contracts, antitrust regulations, intellectual property, competition laws, employment practices, or other actions brought by employees, customers, consumers, competitors, or suppliers. The Company establishes accruals for its potential exposure, as appropriate, for claims against the Company when losses become probable and reasonably estimable. However, future developments or settlements are uncertain and may require the Company to change such accruals as proceedings progress. Resolution of any currently known matter, either individually or in the aggregate, is not expected to have a material effect on the Company’s financial condition, results of operations, or liquidity. Pork Antitrust Litigation Beginning in June 2018, a series of putative class action complaints were filed against the Company, as well as several other pork-processing companies and a benchmarking service called Agri Stats in the United States District Court for the District of Minnesota styled In re Pork Antitrust Litigation (the Pork Antitrust Civil Litigation). The plaintiffs allege, among other things, that beginning in January 2009, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of pork and pork products—including through the use of Agri Stats—in violation of federal antitrust laws. The complaints on behalf of the putative classes of indirect purchasers also include causes of action under various state unfair competition laws, consumer protection laws, and unjust enrichment common laws. The plaintiffs seek treble damages, injunctive relief, pre-and post-judgment interest, costs, and attorneys’ fees. Since the original filing, certain direct-action plaintiffs have opted out of class treatment and are proceeding with individual direct actions making similar claims, and others may do so in the future. The Company has not recorded any liability for these matters as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations. The Offices of the Attorney General in New Mexico and Alaska have filed complaints against the Company and certain of its pork subsidiaries, as well as several other pork processing companies and Agri Stats. The complaints are based on allegations similar to those asserted in the Pork Antitrust Civil Litigation and allege violations of state antitrust, unfair trade practice, and unjust enrichment laws based on allegations of conspiracies to exchange information and manipulate the supply of pork. The Company has not recorded any liability for these matters as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations. Turkey Antitrust Litigation Beginning in December 2019, a series of putative class action complaints were filed against the Company, as well as several other turkey-processing companies and a benchmarking service called Agri Stats, in the U.S. District Court for the Northern District of Illinois styled In re Turkey Antitrust Litigation. The plaintiffs allege, among other things, that from at least 2010 to 2017, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of turkey products—including through the use of Agri Stats—in violation of federal antitrust laws. The complaints on behalf of the putative classes of indirect purchasers also include causes of action under various state unfair competition laws, consumer protection laws, and unjust enrichment common laws. The plaintiffs seek treble damages, injunctive relief, pre-and post-judgment interest, costs, and attorneys’ fees. Since the original filing, certain direct-action plaintiffs have opted out of class treatment and are proceeding with individual direct actions making similar claims, and others may do so in the future. The Company has not recorded any liability for these matters as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations. Poultry Wages Antitrust Litigation In December 2019, a putative class of non-supervisory production and maintenance employees at poultry-processing plants in the continental United States filed an amended consolidated class action complaint against the Company and various other poultry processing companies in the United States District Court for the District of Maryland styled Jien, et al. v. Perdue Farms, Inc., et al. The plaintiffs allege that since 2009, the defendants directly and through a wage survey and benchmarking service exchanged information regarding compensation in an effort to depress and fix wages and benefits for employees at poultry-processing plants, feed mills, and hatcheries in violation of federal antitrust laws. The plaintiffs seek, among other things, treble monetary damages, punitive damages, restitution, and pre-and post-judgment interest, as well as declaratory and injunctive relief. In July 2022, the Court partially granted the Company’s motion to dismiss, and dismissed plaintiffs’ per se wage-fixing claim as to the Company. The Company has not recorded any liability for this matter as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations. Red Meat Wages Antitrust Litigation In November 2022, a putative class of non-supervisory production and maintenance employees at “red meat” processing plants in the continental United States filed a class action complaint against the Company and various other beef- and pork-processing companies in the United States District Court for the District of Colorado styled Brown, et al. v. JBS USA Food Co., et al. The plaintiffs allege that since 2014, the defendants directly and through a wage survey and benchmarking service exchanged information regarding compensation in an effort to depress and fix wages and benefits for employees at beef- and pork-processing plants in violation of federal antitrust laws. The plaintiffs seek, among other things, treble monetary damages, punitive damages, restitution, and pre-and post-judgment interest, as well as declaratory and injunctive relief. The Company has not recorded any liability for this matter as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations.
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LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS | NOTE J - LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS Long-term Debt consists of:
(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 (2024 Notes), $750.0 million aggregate principal amount of its 1.700% notes due 2028 (2028 Notes), and $600.0 million aggregate principal amount of its 3.050% notes due 2051 (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. On June 11, 2020, the Company issued senior notes in an aggregate principal amount of $1.0 billion due 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. Subsequent to the end of the first quarter of fiscal 2024, the Company's Board of Directors approved up to $500 million of new long-term financing which is intended, along with cash on hand, to pay the 2024 Notes upon maturity. 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 U.S. 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 January 28, 2024, and October 29, 2023, 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 January 28, 2024, the Company was in compliance with all covenants.
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INCOME TAXES |
3 Months Ended |
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Jan. 28, 2024 | |
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 ended January 28, 2024, was 23.4% compared to 22.6% for the corresponding period a year ago. The Company benefited from the impact of certain discrete items and higher federal deductions in the prior year. Unrecognized tax benefits, including interest and penalties, are recorded in Other Long-term Liabilities. If recognized as of January 28, 2024, these benefits would impact the Company’s effective tax rate by $17.7 million compared to $18.2 million as of January 29, 2023. The Company includes accrued interest and penalties related to uncertain tax positions in Provision for Income Taxes, with immaterial losses included during the quarter ended January 28, 2024, and January 29, 2023. The amount of accrued interest and penalties associated with unrecognized tax benefits was $2.7 million at January 28, 2024, and $2.6 million at January 29, 2023. The Company is regularly audited by federal and state taxing authorities. The IRS concluded its examination of fiscal 2021 in the second quarter of fiscal 2023. The IRS placed the Company in the Bridge phase of the Compliance Assurance Process (CAP) for fiscal years 2020 and 2023. 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 2025. 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.
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EARNINGS PER SHARE DATA |
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Jan. 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. Diluted earnings per share was calculated using the treasury stock method. The shares used as the denominator for those computations are as follows:
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SEGMENT REPORTING |
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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. The Company 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. 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, equity method investments, and royalty arrangements. Intersegment sales are eliminated in consolidation and are not reviewed when evaluating segment performance. The Company does not allocate deferred compensation, expenses associated with the transformation and modernization initiative, 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 corporate venturing investments and 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 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.
The Company’s products primarily consist of meat and other food products. Total revenue contributed by classes of similar products are:
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.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | |
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Jan. 28, 2024 |
Jan. 29, 2023 |
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Pay vs Performance Disclosure | ||
Net Earnings Attributable to Hormel Foods Corporation | $ 218,863 | $ 217,719 |
Insider Trading Arrangements |
3 Months Ended |
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Jan. 28, 2024 | |
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 ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Jan. 28, 2024 | |
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. 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 29, 2023. 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 29, 2023.
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Reclassifications | Reclassifications: Certain reclassifications of previously reported amounts have been made to conform to the current year presentation. Amortization related to operating leases and debt issuance costs were reclassified from Amortization to separate line items within the operating activities section of the Consolidated Condensed Statements of Cash Flows. These reclassifications had no impact on the Consolidated Statements of Operations, Consolidated Condensed Statements of Financial Position, or the Increase (Decrease) in Cash and Cash Equivalents in the Consolidated Condensed Statements of Cash Flows. |
Accounting Changes and Recent Accounting Pronouncements | Accounting Changes and Recent Accounting Pronouncements: New Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The update is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (CODM), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The ASU also requires all annual disclosures currently required by Topic 280 to be included in interim periods. The update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and requires retrospective application to all prior periods presented in the financial statements. The Company is currently assessing the timing and impact of adopting the updated provisions. In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update is intended to enhance transparency and decision usefulness of income tax disclosures. This ASU updates income tax disclosure requirements by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. The update is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently assessing the timing and impact of adopting the updated provisions. Recently issued accounting standards or pronouncements not disclosed have been excluded as they are currently not relevant to the Company.
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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.
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Segment Reporting | The Company develops, processes, and distributes a wide array of food products in a variety of markets. The Company 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. 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, equity method investments, and royalty arrangements. Intersegment sales are eliminated in consolidation and are not reviewed when evaluating segment performance. The Company does not allocate deferred compensation, expenses associated with the transformation and modernization initiative, 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 corporate venturing investments and noncontrolling interests are excluded. These items are included below as Net Unallocated Expense and Noncontrolling Interest when reconciling to Earnings Before Income Taxes.
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
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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 quarter ended January 28, 2024, is:
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Schedule of carrying amounts for indefinite-lived intangible assets | The carrying amounts for indefinite-lived intangible assets are:
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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:
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Schedule of amortization expense | Amortization expense on intangible assets is as follows:
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Schedule of estimated annual amortization expense | Estimated annual amortization expense on intangible assets for the five fiscal years after October 29, 2023, is as follows:
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INVESTMENTS IN AFFILIATES (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of equity in earnings of affiliates | Equity in Earnings of Affiliates consists of:
(1) MegaMex, Foods, LLC, is reflected in the Retail Segment. (2) Other Equity Method Investments are primarily reflected in the International Segment but also include corporate venturing investments.
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Schedule of distributions received from equity method investees | Distributions received from equity method investees include:
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INVENTORIES (Tables) |
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Jan. 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of principal components of inventories | Principal components of inventories are:
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DERIVATIVES AND HEDGING (Tables) |
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Jan. 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair values of derivative instruments | The gross fair values of the Company’s derivative instruments designated as hedges are:
(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 January 28, 2024, is offset by the right to reclaim net cash collateral of $24.5 million contained within the master netting arrangement. The gross liability position as of October 29, 2023, is offset by the right to reclaim net cash collateral of $32.2 million. See Note H - Fair Value Measurements for a discussion of these net amounts as reported on the Consolidated Condensed Statements of Financial Position.
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Schedule of fair value hedge assets (liabilities) | The carrying amount of the Company’s fair value hedged assets (liabilities) are:
(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 January 28, 2024, the carrying amount of the 2024 Notes included a cumulative fair value hedging adjustment of $4.3 million from discontinued hedges.
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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:
(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 commodity 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:
(1) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the quarter ended January 28, 2024, and January 29, 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. (2) Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold. (3) Represents the fair value hedging adjustment amortized through earnings. (4) Total Gain (Loss) on Interest Rate Contracts is recognized in earnings through Interest Expense.
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Cash Flow Hedges | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of outstanding commodity futures contracts | The Company's outstanding contracts related to its commodity hedging programs include:
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PENSION AND OTHER POST-RETIREMENT BENEFITS (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net periodic cost of defined benefit plans | Net periodic cost for pension and other post-retirement benefit plans consists of:
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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
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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:
(1) Included in computation of net periodic 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. (3) Included in Equity in Earnings of Affiliates in the Consolidated Statements of Operations.
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FAIR VALUE MEASUREMENTS (Tables) |
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Jan. 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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.
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 percent of the U.S. 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 ended January 28, 2024, securities held by the rabbi trust generated gains of $11.5 million, compared to gains of $7.0 million for the quarter ended January 29, 2023. (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, diesel fuel, 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, diesel fuel, and pork swap contracts that are over-the-counter instruments classified as Level 2. The value of the natural gas and diesel fuel 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, on the Consolidated Condensed Statements of Financial Position. As of January 28, 2024, the Company has recognized the right to reclaim net cash collateral of $24.5 million from various counterparties (including cash of $22.3 million plus $2.2 million of realized gain). As of October 29, 2023, the Company had recognized the right to reclaim net cash collateral of $32.2 million from various counterparties (including cash of $42.6 million less $10.4 million of realized loss).
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LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS (Tables) |
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Jan. 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt | Long-term Debt consists of:
(1) See Note E - Derivatives and Hedging for additional information.
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EARNINGS PER SHARE DATA (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of denominator for the computation of basic and diluted earnings per share | The shares used as the denominator for those computations are as follows:
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SEGMENT REPORTING (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 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.
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Schedule of total revenues contributed by sales channel | Total revenue contributed by classes of similar products are:
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GOODWILL AND INTANGIBLE ASSETS - Changes in Carrying Amounts of Goodwill (Details) $ in Thousands |
3 Months Ended |
---|---|
Jan. 28, 2024
USD ($)
| |
Changes in the carrying amount of goodwill | |
Beginning Balance | $ 4,928,464 |
Foreign Currency Translation | 2,793 |
Ending Balance | 4,931,257 |
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 | 261,074 |
Foreign Currency Translation | 2,793 |
Ending Balance | $ 263,867 |
GOODWILL AND INTANGIBLE ASSETS - Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands |
Jan. 28, 2024 |
Oct. 29, 2023 |
---|---|---|
Carrying amounts for indefinite-lived intangible assets | ||
Total | $ 1,631,468 | $ 1,631,098 |
Brands/Trade Names/Trademarks | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | 1,636,807 | 1,636,807 |
Other Intangibles | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | 184 | 184 |
Foreign Currency Translation | ||
Carrying amounts for indefinite-lived intangible assets | ||
Total | $ 5,523 | $ 5,893 |
GOODWILL AND INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 28, 2024 |
Jan. 29, 2023 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization Expense | $ 4,463 | $ 4,607 |
GOODWILL AND INTANGIBLE ASSETS - Estimated Annual Amortization Expense (Details) $ in Thousands |
Oct. 29, 2023
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 16,381 |
2025 | 14,681 |
2026 | 14,210 |
2027 | 13,940 |
2028 | $ 13,009 |
INVESTMENTS IN AFFILIATES - Schedule of Equity in Earnings of Affiliates (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 28, 2024 |
Jan. 29, 2023 |
|
Investments In and Receivables from Affiliates | ||
Total Equity in Earnings of Affiliates | $ 16,091 | $ 15,559 |
MegaMex Foods, LLC | ||
Investments In and Receivables from Affiliates | ||
% Owned | 50.00% | 50.00% |
Total Equity in Earnings of Affiliates | $ 8,091 | $ 13,681 |
Other Equity Method Investments | ||
Investments In and Receivables from Affiliates | ||
Total Equity in Earnings of Affiliates | $ 8,000 | $ 1,878 |
Other Equity Method Investments | Minimum | ||
Investments In and Receivables from Affiliates | ||
% Owned | 20.00% | 20.00% |
Other Equity Method Investments | Maximum | ||
Investments In and Receivables from Affiliates | ||
% Owned | 50.00% | 50.00% |
INVESTMENTS IN AFFILIATES - Schedule of Distributions Received from Equity Method Investees (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 28, 2024 |
Jan. 29, 2023 |
|
Investment, Affiliated Issuer | ||
Investments In and Receivables from Affiliates | ||
Dividends | $ 15,731 | $ 3,652 |
INVESTMENTS IN AFFILIATES - Narrative (Details) - USD ($) $ in Millions |
Dec. 15, 2022 |
Jan. 28, 2024 |
Jan. 26, 2024 |
Apr. 12, 2023 |
Jan. 29, 2023 |
Oct. 26, 2009 |
---|---|---|---|---|---|---|
Garudafood | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 29.00% | 30.00% | ||||
Purchase price | $ 425.8 | |||||
Basis difference between fair value and carrying value of investment | $ 324.8 | $ 324.9 | ||||
Fair value | $ 279.4 | |||||
MegaMex Foods, LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50.00% | 50.00% | ||||
Basis difference between fair value and carrying value of investment | $ 9.1 | $ 21.3 |
INVENTORIES - Schedule of Principal Components of Inventories (Details) - USD ($) $ in Thousands |
Jan. 28, 2024 |
Oct. 29, 2023 |
---|---|---|
Inventory, Net [Abstract] | ||
Finished Products | $ 887,941 | $ 954,432 |
Raw Materials and Work-in-Process | 416,896 | 448,535 |
Operating Supplies | 161,174 | 168,289 |
Maintenance Materials and Parts | 112,181 | 109,151 |
Total Inventories | $ 1,578,191 | $ 1,680,406 |
DERIVATIVES AND HEDGING - Outstanding Commodity Future Contracts (Details) - Cash Flow Hedges - Derivatives designated as hedges lb in Millions, gal in Millions, bu in Millions, MMBTU in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Jan. 28, 2024
MMBTU
lb
gal
bu
|
Oct. 29, 2023
MMBTU
lb
bu
gal
|
|
Corn | ||
Derivative [Line Items] | ||
Futures contracts, volume (in bushels) | bu | 24.8 | 30.7 |
Futures contracts, volume (in gallons) | bu | 24.8 | 30.7 |
Lean Hogs | ||
Derivative [Line Items] | ||
Futures contracts, mass (in pounds) | lb | 158.2 | 144.2 |
Natural Gas | ||
Derivative [Line Items] | ||
Futures contracts, energy (in MMBTu) | MMBTU | 3.5 | 3.0 |
Diesel Fuel | ||
Derivative [Line Items] | ||
Futures contracts, volume (in bushels) | gal | 0.3 | 0.0 |
Futures contracts, volume (in gallons) | gal | 0.3 | 0.0 |
DERIVATIVES AND HEDGING - Fair Value of Derivatives (Details) - USD ($) $ in Thousands |
Jan. 28, 2024 |
Oct. 29, 2023 |
---|---|---|
Derivatives fair value | ||
Right to reclaim net cash collateral | $ 24,500 | $ 32,200 |
Derivatives designated as hedges | Cash Flow Hedges | Commodity Contracts | Other Current Assets | ||
Derivatives fair value | ||
Gross fair value | $ (8,909) | $ (13,233) |
DERIVATIVES AND HEDGING - Fair Value Hedge Assets (Liabilities) (Details) - USD ($) $ in Thousands |
Jan. 28, 2024 |
Oct. 29, 2023 |
---|---|---|
Derivatives fair value | ||
Cumulative basis adjustment of carrying amount of hedged portion of 2024 Notes | $ 4,327 | $ 7,451 |
Fair Value Hedges | Commodity Contracts | Accounts Payable | ||
Derivatives fair value | ||
Carrying amount of fair value hedged assets (liabilities) | (2,241) | (4,914) |
Fair Value Hedges | Interest Rate Contracts | Current Maturities of Long-term Debt | ||
Derivatives fair value | ||
Carrying amount of fair value hedged assets (liabilities) | $ (445,673) | $ (442,549) |
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Billions |
Jan. 28, 2024 |
Oct. 29, 2023 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Fair value of long-term debt, utilizing discounted cash flows (Level 2) | $ 2.8 | $ 2.7 |
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 28, 2024 |
Jan. 29, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 23.40% | 22.60% |
Unrecognized tax benefits that would impact effective tax rate | $ 17.7 | $ 18.2 |
Accrued interest and penalties associated with unrecognized tax benefits | $ 2.7 | $ 2.6 |
EARNINGS PER SHARE DATA - Shares Used as Denominator (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Jan. 28, 2024 |
Jan. 29, 2023 |
|
Earnings Per Share [Abstract] | ||
Basic Weighted-average Shares Outstanding (in shares) | 547,020 | 546,384 |
Dilutive Potential Common Shares (in shares) | 900 | 3,647 |
Diluted Weighted-average Shares Outstanding (in shares) | 547,920 | 550,031 |
Antidilutive Potential Common Shares (in shares) | 17,892 | 3,239 |
SEGMENT REPORTING - Narrative (Details) |
3 Months Ended |
---|---|
Jan. 28, 2024
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
SEGMENT REPORTING - Revenue Contributed by Sales Channel (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jan. 28, 2024 |
Jan. 29, 2023 |
|
Revenue from External Customer [Line Items] | ||
Total Net Sales | $ 2,996,911 | $ 2,970,992 |
Perishable | ||
Revenue from External Customer [Line Items] | ||
Total Net Sales | 2,106,571 | 2,080,461 |
Shelf-stable | ||
Revenue from External Customer [Line Items] | ||
Total Net Sales | $ 890,340 | $ 890,531 |
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