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Diving overview:
- Jacinth Smiley, chief financial officer of Hormel Foods, maker of Skippy peanut butter and Spam, has stepped down from her position to pursue other opportunities, the company said in a news release and securities filing Wednesday.
- Hormel has appointed Paul Kuehneman, executive vice president and controller, as interim CFO, effective Oct. 27, according to a press release.
- Smiley, who has served as Hormel’s CFO since November 2021, is expected to remain an employee of Hormel until Nov. 30, according to a filing with the Securities and Exchange Commission. Hormel said it plans to consider both external and internal candidates as it enters into a separation agreement with Smiley and searches for a permanent replacement.
Dive Insights:
The CFO transition comes just months after the Austin, Minnesota-based branded foods company announced a transition to its chief executive officer. Former CEO Jeff Ettinger will serve as interim CEO for 15 months, effective July 14, according to a press release.
Kuehneman will report directly to Ettinger as interim CFO, according to a press release. Kuehneman, 54, joined Hormel as director of internal audit in 2009 and previously served as CFO of Hormel subsidiary Jennie-O Turkey for five years, taking on her most recent role as VP and controller in February 2022, according to her LinkedIn profile. The company will provide compensation details for Kuehneman’s interim CFO appointment once they are finalized, according to the filing.
“Paul is a respected leader with deep knowledge of our business and a proven track record of results,” Ettinger said in a statement included in the press release. “With over 30 years of extensive experience across the organization, he has the ability to support the company’s strategy, maintain financial discipline and create long-term shareholder value.”
Kuehneman is taking on the interim role as Hormel navigates several headwinds, including inflationary pressures.
On Wednesday, Hormel provided guidance on some of the challenges and topics that will impact the upcoming fourth quarter, warning that it “continues to experience persistent inflation at higher-than-expected levels from key raw material inputs.”
The company previously highlighted ongoing inflationary pressures in its third-quarter earnings report, and Ettinger noted in a statement that Hormel is taking “targeted pricing actions” to address commodity inflation. “As the short-term pressure experienced in the third quarter continues into the fourth quarter, profit recovery is expected to lag well into the new year,” he said.
According to data released by the Bureau of Labor Statistics, food prices rose 0.2% in September, following a 0.5% increase the previous month. Meanwhile, the Meat, Poultry, Fish and Eggs index rose 5.2% over the past 12 months, the BLS said.
Hormel said on Wednesday that it had been affected not only by inflationary pressures but also by the spread of avian influenza and pneumovirus in the poultry sector.
“Hormel Foods remains focused on mitigating these headwinds through productivity initiatives and strategic pricing actions,” the press release said.
On Oct. 25, the company also announced a voluntary recall of nearly 5 million pounds of frozen ready-to-eat chicken products after noting they may contain “extraneous metallic substances.”
According to a news release from the U.S. Department of Agriculture’s Food Safety and Inspection Service, Hormel discovered the problem after receiving multiple complaints from food service customers who “found metals in frozen chicken breast and chicken thigh products.” “Hormel Foods determined that the metal originated from conveyor belts used in production.”
For the upcoming fourth quarter, Hormel said Wednesday that it expects top-line net sales between $3.15 billion and $3.25 billion, its previous issuance range. It also said adjusted earnings per share are expected to be about $0.08 to $0.09 below previous expectations.
